London is a global powerhouse and a powerful engine for the national economy…
- Greater London’s 8.8 million residents account for 23 per cent of the UK economy, with just 13 per cent of the national population, and form part of a ‘Wider South East’ of 24 million people. 1
- London is one of a small number of elite world cities around the globe, competing economically with New York and Paris rather than Birmingham and Manchester. 2
- Greater London pays more in tax than it receives in public spending: in 2016/17, London’s ‘fiscal surplus’ was £32.6 billion. 3
- London also contributes heavily to other regional economies through intra-UK trade, supply chains, and employment in London-headquartered international businesses.
…but its relationship with the rest of UK has become increasingly strained.
- Public spending cuts have heightened tensions over the ‘fair share’ of limited resources between regions. 4
- Media commentary has increasingly focused on regional imbalances and on ‘toxic relations’ between the capital and the rest of the UK. 5
- The 2016 EU Referendum served to highlight differences between Greater London (which voted 60:40 to Remain) and the rest of the country.
- And recent debates over the regional allocation of transport spending have exacerbated tensions.
People across the country express pride in London and acknowledge the capital’s role…
- Polling shows that twice as many Brits say they are proud of the capital as those who are not (56 and 28 per cent, respectively).
- 77 per cent of non-Londoners agree that London contributes a lot or a fair amount to the UK economy – and decision-makers across the country interviewed for this report also agree.
- London’s role as a global hub for business and investment is also widely appreciated by decision-makers.
- Those Brits who visit London once a year or more have notably more positive views than those who do not.
- There is very little interest outside London in moving institutions like Parliament, national museums or government departments elsewhere in the UK.
- And there are many emerging, but often unremarked, examples of London’s political, business and cultural institutions working with regional partners to mutual benefit.
…but London does also have some serious reputational problems.
- Non-Londoners see the capital as expensive and crowded, with Londoners themselves thought to be arrogant and insular.
- London is also seen as inaccessible: 78 per cent of non-Londoners polled said that they felt that living and working in the capital was not an option for them.
- Only 16 per cent of non-Londoners feel that the capital contributes a lot or a fair amount to their local economy.
- Pride in London as a capital is highest in the South of England, falling to 51 per cent in the North and 39 per cent in Scotland – and appears to have declined since 2012.
- Local leaders feel that the location of central government in Westminster and Whitehall leads to ‘London-centric’ national policymaking.
- London’s size and sheer magnetism can make it difficult for other regions to compete with it.
- And both previous polling and interviews for this report suggest that there is a widespread feeling that London gets more than its ‘fair share’ of public money.
Some perception issues may be based on misconceptions…
- Whilst London does receive a lot of public spending, it contributes far more in taxation, which is then redistributed around the UK – all regions outside of the Wider South East (London, South East and East of England) are net receivers.
- Londoners have less disposable income on average than their UK counterparts, after housing costs.
- London is also a much more heterogeneous place than is often acknowledged – even London’s wealthiest boroughs have pockets of severe deprivation, and some boroughs recorded some of the UK’s highest Leave votes in the EU referendum.
- Polling revealed that non-Londoners who do not regularly visit, or have never visited, the capital have more negative opinions of it.
…but London still has work to do to improve and strengthen its relations with the rest of the UK:
- Change the narrative: London’s political, business and cultural institutions have a powerful role to play in articulating the message that neither infrastructure investment, nor regional growth, are ‘zero-sum’ games – addressing regional inequalities by boosting other UK cities, towns and regions is in the interests of all.
- Devolve now: Real devolution of power to the UK’s towns, cities and regions – including London – would make for better governance and reduce the significance of central government’s location in SW1.
- Show London cares: London must also act more immediately to address its poor national reputation. London must demonstrate that it cares, and that it wants to perform better in its civic duty as a capital city, as well as its global role.
- Strengthen the spokes: The capital’s dynamic economy and its role as a ‘hub’ for innovative new ideas, talented people and investment from around the world are crucial for the UK – but the ‘spokes’ that share out its advantages across the UK need strengthening.
Summary of recommendations
Recommendations for the Mayor of London, Greater London Authority and London boroughs
Recommendation 1: ’London is Yours’
The Mayor of London and mayoral agencies should launch a domestically-targeted ‘London is Open’-style campaign, entitled ‘London is Yours’, to restate London’s commitment to its role as England and the UK’s capital, explicitly stating that it is in London’s interests for the UK’s other cities and regions to succeed, and that the capital does not seek growth at the expense of any other region, nor devolution in order to hoard resources.
London and central government must also work together to explore ways to make London’s culture and tourism offer, and particularly those relating to its ‘national’ institutions, more accessible and advantageous for those visiting from elsewhere in the UK. The Mayor, the Greater London Authority and London boroughs must work alongside the capital’s businesses and anchor institutions to ensure that London’s cultural offering and business expertise is shared more widely with the rest of the country.
Recommendation 2: Mayoral networks
The Mayor of London should play a prominent role in further developing the emerging mayoral network and establish a UK Alliance of Mayors. This alliance would advocate for solutions to shared problems, and for further devolution in the UK. Joint mayoral delegations can play a role in pitching for ‘multi-region’ overseas investment to the UK.
Recommendation 3: Make the case for further devolution and comprehensive infrastructure investment
London’s leaders should continue to make the case that infrastructure investment across the country should not be a ‘zero-sum game’.
Recommendations for central government
Recommendation 1: Devolution
A post-Brexit UK must see power devolved, with decisions taken as close to those who they affect as possible, in London and across the country. Central government must commit to a major review of where power lies in the UK, and appoint a Cabinet Minister for Devolution to oversee the process.
Recommendation 2: Invest in infrastructure
Infrastructure is key to addressing regional imbalances. National government must invest more in infrastructure across the UK – and devolve more funding and decision-making, along the lines set out by the National Infrastructure Commission. The ‘lock-step’ arrangement for Crossrail 2 and Northern Powerhouse Rail must mean ‘do both’, not ‘do neither.
Recommendation 3: Better data, better debate
Better city-level data is needed, and better measures must be found to accurately represent the strength of regional economies. These measures can and must be improved, to more accurately explain London’s relationship with the rest of the country – but all parties must ultimately also learn the lessons of the EU Referendum; to ‘get beyond the figures’ and make the emotional and more ‘human’ case for a more united nation.
Recommendation 4: Civil service secondments
Civil servants in Whitehall should be expected to undertake temporary ‘job swaps’ with local government officials, including London boroughs, to provide greater experience and insight into the challenges and opportunities faced by elected authorities beyond Westminster.
Recommendations for London’s businesses and anchor institutions
Recommendation 1: Cultural connections
The practice of London’s ‘national’ cultural attractions going ‘on
tour’ should be built upon and expanded – and applied to people and performance, as well as artworks and exhibits. Exchange programmes should be established to ensure that young people across the UK benefit from London’s world-class cultural offering, whether by visiting the capital or the capital coming to them. A national inter-city school exchange programme could also help build a stronger sense of collective national identity.
Recommendation 2: Knowledge sharing
London’s public, private and third sector institutions, following the lead of the Mayor of London’s Office, Transport for London and London & Partners, as well as the tone set by ‘London is Yours’, must reach out to partner institutions across the country even more than they do so today, to share ideas, experience and knowledge.
Recommendation 3: Strengthen the spokes
London is a global ‘hub’ for tourism, business and investment. More must be done to strengthen the ‘spokes’ that draw these advantages out across the UK. Excellent joint initiatives designed to spread the benefits of international tourism across the UK should be built upon and developed. London’s private, public and third sector organisations must also commit to work with partners outside the capital to more frequently and successfully apply this model to preparing joint investment strategies for international business.
Recommendation 4: Regions in the city
London’s governance and business institutions must work together with the Department for International Trade to investigate how to provide spaces in the capital where regional businesses can take advantage of its connections to the rest of the world, and help develop stronger spokes from London’s international hub, drawing investment out across the country.