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Advertorial feature by City of London

The capital’s contribution nationwide looking beyond financial services

By Mark Boleat Mark Boleat

Much thought has been given to as to why London voted remain in the EU Referendum and largely why the rest of the country as a whole did not. London’s socio-economic makeup, it’s multinational and young workforce and highly-educated residents have all been cited. Whatever the mixture of reasons, the result sent a clear message to London from large swathes outside of the capital: we do not agree with everything that you think. Professor Tony Travers at the London School of Economics, one of the most respected academics on London, has said in the past that ‘London is unique and, arguably, alien to the rest of the UK.’

London has been a major driver of national economic growth over the years. In fact our own research in 2014 showed that the London economy makes a £34 billion net positive contribution to UK public finances. The South East and East of England are the only two regions that also make a net contribution with the rest of the UK’s 12 constituent countries and regions in deficit. On top of that London generates 22% of UK GDP despite accounting for only 12.5% of the UK’s population.

It would be all too easy to let this chasm grow and help foster the mentality of ‘us’ and ‘them’ or back the absurd idea of a ‘City state’. This is not what London wants, nor does the capital see itself in competition with the rest of the UK. London does not act, as former Business Secretary Vince Cable said, as a ‘giant suction engine.’ In fact we see strong and vibrant growth in cities outside of London as a something that will in turn benefit our own city. This has been backed up by work from Professor Costas Milas of Liverpool University finding that though growth rates vary between regions, they are always positively correlated.

Yes it is true that London benefits from major infrastructure investment, but what this also shows is that capital makes a major contribution to government finances on the whole, supporting wider investment and expenditure across the rest of the UK.

This positive London effect can be seen in detailed data. Most of the jobs and orders for London’s Crossrail project are outside the capital. In 2012-13 the project supported 13,800 full-time jobs, 8,310 of which were outside London, as are 62% of the firms which have won orders on the project. The same principle would surely apply to major investment projects in and around London in the coming years, most notably a new runway at Heathrow and HS2 – if and when we get spades in the ground.

Furthermore, this ripple effect includes the property market. A study by PwC for London First found that central London office developments support 34,600 jobs – 22,400 of which are actually outside of London.

It is too easy to focus just on the economic gains though. As London continued to grow some had fears that this success could in the longer term be at the expense of culture, creativity and innovation, with artists and other practitioners increasingly unable to afford to live and work in the city.

However, the capital continues to offer some of the world’s best arts and cultural activities. We have three of the top ten museums and galleries in the world and 857 art galleries in total. London has four UNESCO world heritage sites: the Tower of London, Maritime Greenwich, Westminster Palace and Kew’s Royal Botanic Gardens. Over 250 festivals take place in London every year. It holds Europe’s biggest street festival, the Notting Hill Carnival, the biggest street party in the form of the Lord Mayor’s Show, as well as hosts leading exhibitions like the London Design Festival and London Fashion Week. London simply acts as the hub attracting international attention on the arts and cultural stage, providing a focal point for the UK.

Even the Square Mile has a role to play here – something not normally associated with what many assume as just the district for financial and professional services. The City of London Corporation is actually the country’s biggest funder of culture after the Government, the BBC and the Lottery.

As a capital we have tried to lead the way on important issues like air quality. Pollution knows no boundaries and what affects London affects the surrounding area which is why we support the Mayor’s Air Quality Strategy, with the aim for London to be one of the cleanest and greenest cities in the world. The City again plays its own role here and hosts its own Idling Engine Action Day, asking vehicle drivers who leave their engines when stationary to turn them off. Measures like this could be a model for other cities to follow.

Post-Brexit, the City of London Corporation has been vocal on the need for highly-skilled workers and highlighting that it is for the good of the country to be able to access labour from the EU and elsewhere. It is a message I constantly hear from business outside of London which explains why we put forward proposals for ‘regional visas’ giving local businesses a greater say in determining a post-Brexit immigration policy that works for them.

Similarly to what the cities outside of London say, we too want more devolved powers, especially in taxation and spending. That is why on the whole we have been so supportive of the national devolution agenda. London is well-placed to be the springboard for the rest of the country. We want to work with the rest of the UK to spread the opportunities that present themselves.