2026 will mark the second anniversary of the election of a government which made economic growth its number one mission. And yet, with more than 500 days having passed from the general election, the economy is stuttering.
Latest GDP figures show the economy actually shrank immediately prior to the Budget, a sure indicator of the levels of trepidation felt by companies about what the Chancellor’s red box would contain. And having run the rule over the Budget measures, the Office of Budget Responsibility downgraded its UK growth forecasts in each of the coming years.
The Government now has a closing window of opportunity to make its growth mission a reality before voters head back to the polls. With the public finances stretched, it needs new ideas for getting the economy moving again which aren’t going to break the bank. And it needs them now.
It’s clear that the government’s growth mission can only succeed if London – which accounts for more than a fifth of the national economy, supports multi-billion pound country-wide supply chains, and makes a huge net contribution to the Treasury – is firing on all cylinders as an engine of UK growth.
The trouble is, the capital’s economy is stalling. Its productivity growth tailed off significantly after the financial crash and has never really recovered. Growth in output per hour across the city now lags behind many other major UK cities, and the same is true of other leading global cities. London is also shedding jobs at a faster rate than any other part of the country.
That’s why, here at BusinessLDN, we have launched a new Growth Commission: a collective of experts from across the fields of business, culture and academia which will identify short, medium and long-term interventions to help our economy thrive through a period of rapid technological change and global instability.
As well as cross-cutting interventions that will benefit all firms, the commission will focus on developing interventions aimed at bolstering seven key growth sectors in London: life sciences, professional & business services, financial services, digital & tech industries, creative industries, higher education and housing.
It will complement the national government’s industrial strategy, and greater London authority’s growth plan, by bringing a distinctly commercial perspective – a perspective which draws on a uniquely cross-sector range of voices from the fields of tech, housing, higher education, culture and beyond.
Our first meeting of commissioners this week touched on the importance of ensuring London remains competitive as a global city (you can hear commissioner Peter Hogg of Arcadis discussing this subject with our Chief Executive John Dickie on a recent episode of our What Next for London? podcast), giving London “the tools to determine its own destiny” and making the city’s infrastructure backable for major institutional investors.
We heard reflections too around how culture has become a fundamental driver of growth in London, the central role of higher education in securing future talent pipelines, and the need to demonstrate exactly how growth in the capital benefits the whole UK.
Injecting some dynamism into the economy will be at the top of the new year’s resolution list for many government ministers. Our commission is here to help them turn their welcome growth mission into a reality.