If you find the world a bit depressing these days, then for goodness’ sake don’t read the (excellent) new report by the Centre For Cities about London’s economic malaise. I’ve just pored over it, and I’m now about as happy as one of Dominic Raab’s secretaries.
London’s productivity is lagging way behind New York and Stockholm and “becoming less competitive in the global economy as its productivity growth has stagnated”. The cost of this is vast: if London had performed as well as other international capitals, the economy would be generating around £17 billion a year in extra tax revenues to improve our public services.
There are some policy challenges —such as refugees arriving on small boats — where it’s genuinely difficult to know what the correct response should be.But when it comes to what’s holding London’s economy back, it’s obvious what needs to be done.
Take the suffocatingly expensive cost of housing and commercial space.As everyone knows, and the Centre for Cities report eloquently demonstrates, London’s planning system is utterly broken and out of date, and needs to be totally replaced so that it’s far faster and cheaper to build new homes and office spaces.
It’s the same story with the heinously bureaucratic post-Brexit immigration rules, which make it deliberately expensive and difficult to recruit the best people from overseas.
Londoners know full well the capital only works if it’s open to global talent, which explains why the British Social Attitudes Survey consistently shows we’re twice as likely as the rest of the UK to see immigrants as being good for the economy.
That’s why I’ve been banging on for years about London-only work visas, and automatic visas for graduates of London’s universities. If the rest of the country wants to keep out the brightest sparks, that’s their call, but they should always be welcome in our city.
There’s really nothing stopping us from taking action on housing costs, immigration and all the rest. The policies are relatively straightforward; it’s the politics that complicate things.
I live in hope that Sadiq Khan will use his near-inevitable third term as Mayor to make these changes happen. Let’s see if my optimism pays off.
