Has London “got it’s mojo back”, as one speaker told BusinessLDN’s Future London conference yesterday? Certainly, if not unbounded optimism, there was a real sense among delegates that, in the words of Sir Sadiq Khan’s business deputy Howard Dawber (pictured), the city is “in a good place”.
The capital – “very much the engine of the UK economy” – was outperforming expectations, EY chief economist Peter Arnold told the gathering. “There are some green shoots out there,” he said. London’s familiar attributes, its capital markets, legal system and talent pool, now coupled with political stability, in Westminster and City Hall, were increasingly making the city a business destination of choice.
The Mayor had already declared June London’s “biggest ever” month for business, with investors attending major events including the SXSW technology, media and creative industries get- together, the Concordia Europe growth summit and London Tech Week, the biggest event of its kind in Europe. And there were plenty more markers of the city’s global status, the conference heard.
London’s economic output amounts to more than 20 per cent of the entire UK economy, delegates were reminded. The city is the top destination in Europe for inward investment by volume, vies with New York as the world’s top financial centre, is third in the global league for video game, film and TV production, and hosts the headquarters of 100 of Europe’s 500 major companies.
West End theatres are outselling Broadway, London was this year declared by Tripadvisor the world’s top tourist destination, and the city is becoming a leading life sciences hotspot too. Furthermore, it remains a manufacturing centre, said Dawber, with, for example, at least 12 million digestive biscuits being produced every day by one West London factory.
In the face of increasing global economic turbulence, he added, London, with “all the ingredients to start up, scale up and internationalise”, is “looking like one of the places where the world is going to come and do business”.
But if this was now a moment to talk up the city, to “celebrate and champion” what London had to offer, it was also, said BusinessLDN chief executive John Dickie, a time for “urgent action” by government, to support the capital to remain globally competitive and drive growth across the UK. “When London succeeds, the country succeeds,” he reminded the conference. Dawber’s message was similar: “Money spent on London is an investment in growth.”
With just a week to go before the government’s spending review announcements, three familiar areas were singled out. The capital’s housing crisis and the challenge of meeting Whitehall’s 88,000 new homes a year target topped the list, along with transport investment and skills training.
Planning reforms alone would not be enough to boost housebuilding, said Dickie, while Stevan Tennant from developers Ballymore confirmed that current delays in the system meant “honest conversations” were needed to get stalled developments underway. That would mean more grant funding and reducing or even temporarily suspending affordable housing requirements to make schemes viable again, he said.
Legal & General’s Pete Gladwell called for more effort to get pension fund investment into affordable housing, where risk, and returns, could be lower. “That money is in the city, but we are shutting ourselves off from it,” he said. Loan guarantee arrangements as well as grants were likely to feature in housing funding settlements too, he forecast.
With major transport schemes, including Transport for London’s proposed Docklands Light Railway and Bakerloo line extensions effectively “shovel-ready” to “unlock” thousands of new homes, the long-sought multi-year funding deal for TfL was a second key demand. “These are not just transport schemes, they are growth catalysts,” said Dickie.
There was also a call to freeing the city to implement new ways of financing investment, such as the “land value capture” arrangements which funded the Northern line extension to Battersea. Private finance arrangements, despite their chequered history, had a role to play, said Kensington & Bayswater MP and leading Labour Growth Group member, Joe Powell. “We must not be held hostage by the failures of the past,” he said.
Powell was confident about the spending review outcomes for the city. “There are constraints on day-to-day spending, but huge capital allocations will be made,” he said. “This feels like an exciting moment for London.”
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