Jobs, transport, housing and culture are at the heart of six point long term economic plan for London.
The Chancellor and Mayor of London today set out their six-point long term economic plan for London showing what has been delivered, what is underway and what more can be done to make the city prosperous in the long term.
In a speech at the Tate Modern, the Chancellor and the Mayor set out the detailed plan alongside a number of visits in the capital.
The plan aims to:
- secure London’s strong economic future by setting the ambition to outpace the growth of New York, adding £6.4bn to the London economy by 2030. This is equivalent to £600 more per person if London’s productivity grows at the same pace projected for New York
- create over half a million extra jobs in London by 2020 by backing businesses, attracting world wide investment and continuing to raise standards in schools
- solve London’s acute housing problem, the number one challenge facing the city, by building over 400,000 new homes – including through a London Land Commission to identify and support development of brownfield and public sector land
- deliver £10 billion of new investment in London’s transport over the next Parliament including new tube improvements, better roads, more buses and cycle lanes and identifying the next big infrastructure investment after Crossrail
- make London a centre of the world’s creative and commercial life, with new investment in science, finance, technology and culture. This will include a new feasibility study to develop a world class concert hall for London which will be led by the Barbican Centre
- give more power to Londoners to control their city’s future, with new powers for the Mayor of London to support economic growth, boost skills in the capital and have more control over planning powers
There are no quick fixes to achieving these important goals, so the Chancellor and Mayor of London are also setting out a specific timetable to deliver the key concepts of this plan over the five years of the next parliament, and the following decade.
As important next steps in the plan for London, the Chancellor and Mayor announced a number of new specific measures to improve transport links, housing, skills and build further on the culture and history of the great city.
- establishing a London Land Commission to identify public sector land for development, which will help London to develop the equivalent of 100% of London’s brownfield land by 2025 – supporting London to meet its target of building over 400,000 homes by 2025. This Commission will develop the country’s most comprehensive database of public sector land and play a vital role in tackling London’s housing supply challenges
- designating nine new Housing Zones in Greenwich, Bexley, Barking and Dagenham, Wandsworth, Harrow, Hounslow, Lewisham, Southall and Haringey, which will support and accelerate the construction of up to 30,000 new homes
- announcing an extension to the 24 hour tube routes to include the London Overground in 2017, and the District, Circle, Metropolitan and Hammersmith & City lines once the modernisation programme is complete. The Mayor has also committed to buying 200 additional new Routemaster buses this year, and 800 per year from 2016
- asking Transport for London to come forward with prioritised proposals for exciting new infrastructure projects including Crossrail 2, the Bakerloo Line extension, Old Oak Common redevelopment, the next phase of Underground upgrades, Lower Thames Crossing and East London river crossings. This will ensure that new decisions on spending can be taken later this year
- launching an £84m Social Mobility Fund to help council tenants who are eligible for Right to Buy, buy their own home on the open market. This will invite local authorities across the country to bid for funding to offer cash sums to council tenants who want to do this. The fund will be targeted at those tenants wanting, for example, to move for work
- backing plans for a new major concert hall in London by funding a feasibility study to progress plans to give London a world-class concert hall comparable to those present in other major cities across the world. This plan has the full support of Sir Simon Rattle, and Sir Nicholas Hytner has agreed to work with the project promoters to develop it
- giving more powers to Londoners by beginning discussions on planning devolution, including powers over lines of sight and wharves, and a skills deal which would result in the devolution of the Apprenticeship Grant to Employers and a remit to work with government to reshape skills provision in London
- establishing a West Anglia Task Force to look at opportunities to improve connections to Stansted and Cambridge from Liverpool Street
As both the Prime Minister and Chancellor have set out clearly, the only way for the UK’s recovery to be truly sustainable is for it to be truly national. While the challenge is significant, so is the prize ahead. By pursuing this plan, the Chancellor and Mayor of London aim to achieve real outcomes for the people of London who have already seen employment grow twice as quickly under this government as it did under the previous administration.
In his speech Chancellor of the Exchequer, George Osborne said:
“So this is our long term economic plan for London.
To grow our city and outpace New York.
To create over half a million new jobs.
Build over 400,000 new homes.
Provide £10 billion on new transport.
Back business and science and culture here.
Give a voice to people here.
And make London the greatest capital city on earth for the next generation of Londoners.”
The Mayor of London, Boris Johnson said:
“Top of my agenda is support for hardworking Londoners and today’s confirmation of plans to stimulate new jobs, major improvements to our transport systems, the opening up of new sites for housing, and moves to improve skills are all huge wins for our city. This will ensure London can thrive for decades to come, remain fit to spur the wider UK economy onto further success and primed to outperform our major competitors around the world.”
Timetable for Action – Implementation in London 2015-2030
Employment and productivity
- London is one of the UK’s 22 Super Connected Cities and has issued more connection vouchers than any other city. More than 500 of these have been issued to Tech City, where some businesses have also been joining together to make best use of the funding
- through the Growth Deal of July 2014, the London Enterprise Panel has devolved control over capital funding of £55m for 2015/16 in order to run a competitive programme for capital investment at Further Education colleges and other skills providers. In addition, it was given funding to support the capital elements of a proposed pilot digital skills programme and wider freedoms and flexibilities to trial new approaches for incentivising businesses to take on apprentices; informing careers advice to give young people information about the education, employment and training opportunities and link employers with education providers; a payment by results pilot for learners aged 19 years and above and the link between skills investment and economic growth outcomes; and facilitating data sharing between central and local government. Following the Growth Deal, the Greater London Authority and the SFA are working positively together to align and maximise resources and impact on the delivery of the London Apprenticeship campaign.
- government has invested £2.8m at Barking and Dagenham College in STEM facilities including workshops and classrooms, as part of an £8.8m project. £2.1m has also been invested at Uxbridge College in engineering workshops, refectory extension, classrooms, and specialist facilities for people with learning difficulties as part of a £6.4m project
- government is addressing gaps in training for skilled technician roles through the vocational education system, establishing National Colleges as high status, employer led institutions that will target skill gaps in priority STEM sectors. The National College for Digital Skills will open in London in 2015, providing specialist higher level vocational training up to degree and post graduate level, as well as professional qualifications
- £400m is being invested in the new Housing Zones scheme with the potential to deliver 50,000 units. Nine zones have been designated and we expect up to 20 Zones to be in place by summer 2015
- government will establish a London Land Commission to identify surplus public sector land with the aim of helping London develop 100% of its brownfield land by 2025
- £84m Social Mobility fund launched to help council tenants across the country who are eligible for the Right to Buy to buy their own homes on the open market
- Mayor will provide £5m for a permanent purpose-designed home for No Second Night Out (NSNO) to expand its operation and provide a secure foundation for pan-London rough sleeping services for years to come
- funding has been confirmed (subject to due diligence and contract negotiations) under the Estates Regeneration scheme to kickstart and accelerate the regeneration of large estates through fully recoverable loans, helping to boost housing supply and improve the quality of life for residents in some of the most run down estates in London. Shortlisted are projects in: Grahame Park, in Barnet; Blackwall Reach and New Union Wharf, in Tower Hamlets and Aylesbury Estate, in Southwark. These will provide 8,000 homes.
- government’s commitment to building new homes has already seen:
- Affordable Homes programme invest £1.9bn to deliver 51,000 affordable homes in London
- over 4,600 households have been supported into home ownership in London through Help to Buy
- Get Britain Building scheme has committed to an investment of £105.9m which enabled work to start on 2,634 new homes in London
- HCA Land Programmes have invested £55m to support local economic growth and regeneration in local communities, and has seen work start on 1,246 homes
- Builders Finance Fund, which has shortlisted schemes worth £74m covering 1053 units, will see the first starts on site during 2015
- Large Sites infrastructure Fund has shortlisted projects bidding for £549m with the potential to unlock up to 16,944 units. The first schemes are expected to go to contract in early March 2015
- Homes across London and the wider South East will be better protected from floods thanks to an unprecedented six-year £2.3 billion national flood defence programme, announced at Autumn Statement 2014, providing better protection for at least 300,000 households nationwide by 2021. The programme will also support economic recovery and growth, working alongside partners including private companies, local planning authorities and Local Enterprise Partnerships (LEPs). It will help avoid over £30bn in long-term economic damages. Key schemes that will benefit in the region include:
- new flood defence scheme in Shoreham-by-sea, is worth over £26 million, of which £16 million is Grant in Aid, and will protect thousands of homes
- Middle Medway Strategy (Leigh and Lower Beult) – reducing the risk of flooding to more than 3,000 properties in Tonbridge, Yalding and East Peckham
- Broomhill Sands Tidal Defence
- Portsea Island
- Thames Estuary programme protecting 8,219 properties
- Oxford Western Conveyance Flood Channel protecting 3,808 properties
- Lower Mole Flood Alleviation scheme protecting 3,064 properties in Surrey
- new flood defence scheme in Oxford, just one of 162 schemes in the Thames Valley receiving support through the programme, is worth over £100 million, of which £42m is GiA in the next 6 years, and will protect over 3,000 homes.
- River Thames Datchet to Teddington scheme will reduce flood risk in communities near Heathrow, including Datchet, Wraysbury, Egham, Staines, Chertsey and Shepperton. The scheme now has all of the funding it needs for development and preconstruction works. In addition, it was announced at AS14 that a further £60m would be made available to the project from 2021, taking the government’s contribution to £220m
- government and Transport for London are discussing how funding can be found for extending WiFi/3G/4G coverage to the whole underground network
- we will form a West Anglia Task Force to look at improving connections to Stansted and Cambridge from Liverpool Street and Stratford. Findings are expected by mid 2016
- Transport for London (TfL) will take over rail services between Liverpool Street, Enfield Town, Cheshunt (via Seven Sisters) and Chingford. It will also gain control of twenty three of the 25 stations servicing the routes, although Liverpool Street and Cheshunt stations will remain under the control of Network Rail and Greater Anglia
- we will extend the Northern line to Battersea with two new stations being built at Battersea and Nine Elms by 2020. The extension will help regenerate the Vauxhall, Nine Elms and Battersea areas, supporting 24,000 new jobs and over 18,000 new homes. Construction is due to begin later this year. The government provided a £1bn loan guarantee for the scheme. Repayments will be made using incremental business rates (retained by the Greater London Authority for a period of 25 years in a new Enterprise Zone in the London Boroughs of Wandsworth and Lambeth) and contributions received by the boroughs from local developers
- Crossrail tunnelling is due to finish in Spring 2015 resulting in the completion of 26 miles (42km) of new tunnels beneath London
- on 31 May 2015, TfL will become responsible for the operation of the services between Liverpool Street mainline station and Shenfield station in preparedness for the introduction of the first Crossrail trains supplied by Bombardier on this route from May 2017. This is the first part of a staged transfer to full Crossrail running
- Investment in existing signalling, trains, safety critical station equipment and civil assets (e.g. bridges, tunnels, embankments) resulting in 18% improvement in the reliability of passenger journeys compared with 2010 (as measured by network-wide Lost Customer Hours per passenger journey)
- delivery of prototype for a low energy, higher capacity train for Piccadilly and Bakerloo Lines
- Network Rail will provide the Department for Transport with their study on southern rail access to Heathrow.
- Network Rail is leading a cross industry study to improve the rail link between London and Stansted (reports spring/summer 2015)
- SCOOT (an automated intelligent traffic control system) rolled out across a further 1000 sites across London, resulting in 50% of London’s traffic signals being controlled by this technology
- work will begin on the M25 Junction 20/A13 improvement scheme
- the Road Investment Strategy announced at Autumn Statement 2014 will see £15.7bn committed to road improvement schemes nationwide. £3bn of that will be spent in London and the South East, improving 10 out of 31 junctions on the M25, and improving links radiating out from the city
- M25 Junction 30 will be rebuilt to improve access to the new London Gateway port
- the M23 Smart Motorway will provide better access to Gatwick airport.
- improvements to Junctions 25 (Cheshunt) and 28 (Brentwood) on the M23 will fix longstanding congestion hotspots
- we will bring forward a package of improvements for the M25 between junctions 10 and 16, including four-lane through-running at Junctions 10 to 12 and hard shoulder running from Junctions 15 to 16. Coupled with this, a major rebuild of the A3/M25 Wisley interchange will fix one of England’s least safe motorway junctions
Science, finance, technology and culture
- we will fund the Barbican in the City of London to consider the feasibility of a creating a new world class concert hall in London to help attract the world’s best musicians and orchestras to the capital and protect London’s status as the home of classical music. Outgoing Director of the London’s National Theatre, Sir Nicholas Hytner, will work with the Barbican to consider their proposals.
- UK Research Partnership Investment Fund has awarded £89m to support projects at universities in the area including:
- £15m for Brunel University’s Structural Integrity Research centre which is due to be completed in March 2015.
- £35m for Imperial College West Technology Campus, which is aiming for completion late 2017. This includes 50 new units for spinout companies and will serve the needs of London’s enterprise community.
- £15m for Kings College cancer Research and Innovation hub, which is due for completion in 2016.
- £10m for University College’s Centre for Children’s Rare Disease research, where construction is due to begin in September 2015, with completion by end-2017.
- £11m for University College’s Institute of Immunity and Transplantation, which should be complete early in 2017.
- government is currently taking legislation through Parliament as part of the Small Business, Enterprise and Employment Bill that will require that the major banks share data on small and medium sized business customers with Credit Rating Agencies (CRAs), and that those CRAs provide equal access to that data for lenders. This will make it easier for small and medium sized businesses to seek a loan from a lender other than their bank, helping SMEs to access the finance they need to grow and expand.
- on Wednesday 28 January 2015, the government launched a Call for Evidence on Data Sharing and Open Data for Banks, to invite views on what benefits more open data in banking could bring to consumers and, in particular, how an open standard for APIs in UK banking could best be delivered. This will help to drive more competition in banking, and help the UK remain at the forefront of financial technology and innovation and lead the world in shared data and open data in banking for the benefit of customers. The Call for Evidence exercise will run for 4 weeks, closing on Wednesday 25 February
- Payment Systems Regulator will launch on 1 April 2015, tasked with promoting competition, innovation and the interests of end users in the UK’s £75 trillion payments industry. The PSR is working closely with the sector to develop new and innovative payment mechanisms, and to open up the payments market to challengers
- building on our developing relationship with Malaysia, a global leader in Islamic finance, London will host the UK’s first UK-Malaysia Islamic Finance Summit to explore avenues of cooperation between both countries on Islamic finance
- UK-China Economic and Financial Dialogue will take place in the second half of the year, with a focus on international economic policy, financial services, trade and investment, civil nuclear collaboration, and urbanisation
- Bank of England will commence feasibility work on establishing a shariah compliant liquidity facility with the goal of allowing UK Islamic banks, four of which are based in London, to better meet their liquidity requirements
- in August 2014, the Chancellor announced the launch of GO-Science’s Blackett Review on FinTech Futures, which looks ahead 10 years to the future and identify what the technologies, enablers and barriers are that will shape the future of the UK FinTech sector. The review will report by Budget 2015
Employment and productivity
- through the Growth Deal of July 2014, the London Enterprise Panel has devolved control over capital funding, with a provisional allocation of £65m for 2016/17 in order to run a competitive programme for capital investment at Further Education colleges and other skills providers
- The £58m expansion of the London Growth Deal, announced 29 January, brings the total investment through the programme to £294m and includes:
- £20m for a competitive programme to continue the revitalisation and diversification of London’s High Streets and employment areas, providing jobs, workspace and improved infrastructure
- £38m for the London Enterprise Panel’s capital investment programme for colleges and further education providers in London. The programme aims to ensure facilities are available to support first class training that meets employers’ needs, including in growth sectors such as the digital and creative sectors
- estimated that employers of 41,000 young apprentices will no longer have to pay NICs in 2016 following changes announced at Autumn Statement 2013 and 2014
- Super Connected Cities voucher scheme will end in March 2016, after £40m was allotted to extend the programme at Autumn Statement 2014
- continuing government commitment to building more houses, the Local Growth Fund and the Large Sites Infrastructure Fund will see the approval and contracting of projects by March this year
- construction work at Brent Cross is set to begin in 2016. The regeneration of Brent Cross could deliver 7,500 homes and 27,000 jobs
- key flood defence work is expected to see investment of approximately £91.4m in financial year 2016/17
- ongoing investment in essential waste management infrastructure through PFI credits in London and the South East will amount to £241.7m in financial year 2016/17
- HS2 Hybrid Bill will receive Royal Assent
- roll out of new air conditioned trains on District Line
- Northern ticket hall Victoria Station Upgrade will be delivered
- new, state-of-the-art trains will start to run on the line between Brighton and Bedford on the Thameslink route
- M25 Junction 30/A13 improvement Scheme will be completed
Science, finance, technology and culture
- Kings College Cancer Research and Innovation hub is due for completion in 2016, aided by £15m from the UK Research Partnership Investment Fund
- government is currently taking legislation through Parliament as part of the Small Business, Enterprise and Employment Bill that will require lenders, from 2016, to release information on SMEs they reject for finance, so that they can be identified and approached by alternate credit providers. This proposal will bridge the gap between SMEs not knowing other lending options could meet their needs, and alternative lenders not knowing these businesses need a loan; helping SMEs to access the finance they need to grow and expand
- by 2016, better basic bank accounts will be being offered by the UK’s biggest banks, helping millions to access vital banking services with certainty and clarity
- at the Autumn Statement last year, the government announced that the price comparison website Gocompare would launch a comparison tool by end March 2015 to work with customers’ Midata. From 2016, this measure will enable customers to compare which personal current account may be best for them based on how they use their account, and help customers to manage their finances more effectively
- the UK-Singapore Financial Dialogue will take place in London to strengthen links between the two countries as regional financial hubs, including on the internationalisation of the Renminbi (RMB) and FinTech
- government has agreed a principal heads of terms agreement for a loan of £55 million to support the extension of the London Overground to Barking Riverside, which will unlock the delivery of 11,000 homes. Work is expected to start in 2017
- key flood defence work is expected to see investment of approximately £105.3m in financial year 2017/18
- ongoing investment in essential waste management infrastructure through PFI credits in London and the South East will amount to £247.4m in financial year 2017/18
- electrification of Gospel Oak to Barking line (GOBLIN) is due to be completed in 2017. The scheme is co-funded with TfL and HMG, which provided £115 million in 2013
- from May 2017, the first Bombardier built Crossrail trains will begin operations between Liverpool Street mainline station and Shenfield station
- enabling works commence for HS2 at Old Oak Common and Euston
- new entrance to the Waterloo and City line platforms opens at Bank (subject to agreement with Legal & General)
Science, finance, technology and culture
- Imperial College’s West Technology Campus should be complete by late 2017 with £35m of support from the UK Research Partnership Investment Fund. This includes 50 new units for spinout companies and will serve the needs of London’s enterprise community
- University College’s Centre for Children’s Rare Disease research is due to be completed by end-2017 with £10m of support from The UK Research Partnership Investment Fund
- University College’s Institute of Immunity and Transplantation is due to be complete early in 2017 with £11m of support from the UK Research Partnership Investment Fund.
- government has introduced legislation which will enable banks and building societies to introduce “cheque imaging” in the UK. From 31 July 2016, customers from a wide cross-section of banks will start offering the service to customers; all institutions will provide the service by October 2017. Cheque imaging means a digital image of a cheque may be presented for payment, instead of the original piece of paper. This offers customer choice and convenience (with the opportunity to pay in a cheque on a smartphone via one’s mobile banking app), faster clearing times and operational efficiencies for the banking industry
- £1.25 billion of investment will deliver at least 42,000 affordable homes by 2018
- key flood defence works are expected to see investment of approximately £114.8m in financial year 2018/19
- completion of Thameslink Programme which will rebuild London Bridge station
- in December 2018, there will be 24 Thameslink trains per hour in each direction during the peak, with trains every 2-3 minutes in central London between Blackfriars and St Pancras International, offering new direct journey opportunities and improved connections, including interchange with Crossrail services at Farringdon
- from December 2018, the first Crossrail services between Paddington and Abbey Wood will begin operations marking the start of services in Crossrail’s new tunnels beneath London
- Construction of the HS2 commences, along with construction of station at Old Oak Common
- from May there will be 4 Crossrail trains per hour from London Paddington serving Terminals 1 to 4. The full Crossrail service commences late 2019
- 25% of track on Bakerloo, Central, Victoria and Sub Surface Lines will be replaced
- full signalling upgrade across the Sub-Surface network will take place
- full scheme of the Victoria Station Upgrade is delivered
- key flood defence works are expected to see investment of approximately £126.9m in financial year 2019/20
- ongoing investment in essential waste management infrastructure through PFI credits in London and the South East will amount to £259.1m in financial year 2019/20
- December 2019 marks the completion of the Crossrail project and sees the introduction of full Crossrail services from Reading and Heathrow to the west and Shenfield and Abbey Wood to the east. Crossrail will bring an extra 1.5 million people to within 45 minutes of central London and will link London’s key employment, leisure and business districts – Heathrow, West End, the City, Docklands – on one line for the first time increasing London’s rail based capacity by 10%
- key flood defence work is expected to see investment of approximately £157.4m in financial year 2020/21
- Northern line extension to Battersea – Two new stations are due to open at Battersea and Nine Elms by 2020. The extension will help regenerate the Vauxhall, Nine Elms and Battersea areas, supporting 24,000 new jobs and over 18,000 new homes. The government provided a £1bn loan guarantee for the scheme. Repayments will be made using incremental business rates (retained by the Greater London Authority for a period of 25 years in a new Enterprise Zone in the London Boroughs of Wandsworth and Lambeth) and contributions received by the boroughs from local developers
Employment and productivity
- nationwide, the final £2bn from the Local Growth Fund is released in 2020/21. Since 2015/16 London will have had its share of the £12bn that government has committed to the fund. That share stood at £294m as of 29 January 2015 when the second round was announced. London will have benefitted greatly through its Growth Deal, which includes investments such as up to £120m for the London Enterprise Panel’s skills capital programme
- Housing Zones programme launched in June 2014 are expected to create 50,000 new homes in London by 2025
- construction of the Great Western station and layout starts at Old Oak Common in 2021, with The Old Oak Common station is due to open in 2026
- HS2 station at Euston for Phase 1 is due to open in 2026
- works to relieve station congestion on Northern Line at Bank will occur in 2021
- in the early 2020s the government’s Rail Investment Strategy provides funding for Western Rail Access to Heathrow (WRAtH), subject to a satisfactory business case and the agreement of acceptable terms with the Heathrow aviation industry. It will provide an entirely new (mainly tunnelled) link between Heathrow Terminal 5 station and the Great Western Main Line. It will facilitate frequent and direct rail access to Heathrow from stations in the Thames Valley, including Reading and Slough.
- proposed scheme for station redevelopment at Gatwick involves the creation of an entirely new rafted station at Gatwick, adjacent to the existing station. It would be more than double the size of the existing concourse and radically improve the passenger experience, including improved vertical circulation to/ from platform level. The scheme is expected to cost £120.5m with £30m provided by Gatwick Airport Ltd. We are working towards a binding development agreement with Gatwick Airport Ltd.
Science, finance, technology and culture
- recommendations made by the Blackett Review on FinTech Futures in 2015 will have helped to shape the development of the FinTech sector in London, ensuring that it remains a world beater into the 2020’s and beyond
- final tranche of London’s share of the Local Growth Fund will be released in 2020/21. This will have included up to £5m for the London Enterprise Panel’s digital skills programme, to raise levels of digital skills in London
Treasury analysis of the benefits to London’s economy
To calculate the boost to London’s economic output if its productivity were to grow at the same rate as New-York between now and 2030, we used national statistics from the Office of National Statistics (regional gross value added (GVA) and regional population data) along with economic reports from New York City Government.
Regional economic output is measured annually by the ONS. The published data estimate the GVA in each region in nominal prices with data available from 1997 to 2013. Therefore this data captures both changes in price and volume over time.
Between 1997 and 2013 London’s average growth rate was 5.3 per cent per annum compared to the UK average of 4.2 per cent over the same time period. If between 2013 and 2030, London continues to grow at this pace its GVA would be £473,890m higher in 2030 than in 2013.
To calculate the real, inflation adjusted figures, we undertook the same calculation, but also applied the national GDP deflator across the regions (regional GVA deflators are not published) to give constant prices at 2013 levels). This gives a real increase of £240,674m higher in 2030. Over the same time period, London population is forecast to grow from 8.4 million in 2013 to 10.1 million in 2030, an increase of 1.7 million.
Output per head is estimated by dividing London’s total GVA by its population. Therefore the growth in productivity depends on the rate of growth of output relative to the growth of population. In 2013, output per person in London was £40,215, in 2030 it is estimated to be £57,071, an increase of 41.9 per cent.
Output in New York is expected to grow by 51.9 per cent in real terms by 2030. Over the same time period, New York’s population is set to increase from 8.3 million to 8.8 million, an increase of 5.8 per cent. This leads to an increase of output per person of 43.5 per cent by 2030
If London’s productivity, as measured by output per person, was to increase at the same pace as New York, its output per person would be £57,706 in 2030, £635 higher than the level based on London’s GVA and population growth. Given that London’s population is projected to be 10.1 million in 2030, the increase in GVA per head is equivalent to total GVA of £585,593m, an increase of £6,444m.
To illustrate the potential increase in the level of employment if the region maintains its present rate of employment growth, we extrapolated the monthly average growth rate since the election in 2010.
Latest labour market statistics are available to the three months to December 2014. Employment has grown by 13.2 per cent over this time period, equivalent to a growth rate of 0.22 per cent per month. Extrapolating this growth rate over the 4 months left in the current parliament and the five years (60 months) of the next parliament gives an employment level of 4.9 million, an increase of 651,000 on the current level.