Mayor calls for radical new devolution deal for cities and regions to guard against uncertainty of Brexit

Friday 30th August 2019

  • New report rebuts myth London receives more than fair share of investment 
  • Findings show poverty and inequality affect London as much as anywhere in UK 
  • Significant investment needed to meet high demand for housing and transport

The Mayor of London has today urged the Government to bring about a step-change in devolution to cities and regions across the UK in order to bolster growth and prosperity for the entire country. His call comes as he publishes two major reports highlighting the capital’s contribution to the UK economy.

As the deadline for leaving the European Union approaches, Sadiq Khan is making the case for London – along with the country’s other cities and regions – to be given greater powers and funding. This would support investment in housing, transport, skills, environmental protection and infrastructure, unleash the capital’s potential and guard against the uncertainty and upheaval of Brexit.

Taken together, the two reports – ‘London and the UK – A Declaration of Interdependence’ and the evidence base for the Local Industrial Strategy (LIS) for London – challenge assumptions that London receives more than its fair share of funding and investment. They also make the case that when London succeeds, the rest of the country succeeds as well.

The Mayor has called for an end to the narrative which pits London against the rest of the country in his report ‘London and the UK’, which he commissioned to set out the economic case for how success for the capital means success for the UK as a whole.

The report also rebuts the myth that London receives more than its fair share of investment and explains how the capital’s needs in areas such as transport and infrastructure are significantly greater than any other city or region.

Among the report’s key findings are:

  • Inequality and poverty is a major problem in London – average household incomes are no higher than the rest of the UK once London’s high housing costs are taken into account, and no other UK region has more households and more children living in relative poverty.
  • London has huge investment needs – severe housing shortages and high transport congestion mean substantial public and private investment is needed to meet demand.
  • Public spending per head in London is not particularly high compared to the rest of the UK – and compared to economic output, it is among the lowest of all regions.

Alongside this, the Mayor has also published an interim report setting out the evidence base for his Local industrial Strategy for London, a response to the Government’s Industrial Strategy White Paper, which sets out a long-term plan to boost productivity nationwide. The document identifies the economy’s strengths and weaknesses, and the challenges and opportunities around increasing productivity to unlock inclusive growth.

The Local Industrial Strategy focuses on ensuring all of London’s places, people and communities can contribute to and benefit from the city’s development. It lays out the strength of London’s economic performance over the last 20 years, and how pivotal this has been to the UK as a whole.

However, it also highlights how growth in productivity in London has stalled since the financial crisis in 2008, leaving significant differences in performance between sectors and areas of the capital.

The Mayor of London, Sadiq Khan, said: “Westminster is either incapable or unwilling to get to grips with the challenges faced by cities and regions. It’s well established that London is a global city – but it’s also an English city and a British city too. I want to strengthen those ties, which we won’t achieve by making London poorer through cutting levels of investment.

“Instead, we’ll do it by helping the rest of the country become more prosperous and by developing our network of powerful cities and regions. The data clearly shows that the success of London and the rest of the UK is not – and has never been – a zero-sum game.

“Problems such as inequality, skills, pollution and housing are much better understood at a more local level, and that’s why Government needs to hand greater responsibility for solving these problems to cities and regions.

“We grow together and we succeed together. Each part of the country needs to have more power, and retain more of the taxes they pay.

“This is a pivotal moment in our nation’s history – to ensure greater prosperity for London and the rest of the UK, we need to see an ambitious new devolution settlement for the English cities and regions.”

 Chief Executive of London First, Jasmine Whitbread said: “London’s success is often taken for granted, but as these reports show there is a desperate housing crisis in the capital and infrastructure upgrades are urgently needed for the city to continue to create jobs and improve productivity.

“Infrastructure investment must not be a zero-sum game between London and the regions, as it is vital that the whole of the UK grows together. That’s why the powers and resources of local governments across the country should be increased so that they can make the right spending decisions to boost their region’s growth.”

CBI London Director, Eddie Curzon, said: “It’s good to see the Mayor’s call for additional devolution in London and across the country. Further devolution in the capital will enable London to tackle some of its most pressing issues; including access to affordable homes, reducing crime and creating social cohesion, and ensuring it retains its status as a global city of the first order.

“Putting power into the hands of local decision makers through meaningful devolution is key to unlocking regional growth across England. The Government must urgently publish a framework for devolution that enables local decision makers to address regional needs, collaborate, and invest in the drivers of productivity such as skills and infrastructure, thereby allowing all parts of the country to level up.”

Ben Rogers, Director of Centre for London said: “Cities and regions across the country face very different challenges and opportunities. Devolution would give them the power to develop bespoke approaches to meeting these while responding to citizens’ desires for more control over their lives, especially as powers are returned from Brussels post-Brexit.

“When he was Mayor of London, Boris Johnson called for a similar package of reforms. He now has the opportunity to listen to calls from Sadiq Khan and civic leaders across the country, and make a reality of devolution and empowerment.”

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