Give London power to direct its economy to reverse productivity slide, study urges

JACK BARNETT

LONDON must be given greater power to direct its economy by central government to arrest a historic productivity decline, a new report has urged.

Handing the capital more sway over tax and spending decisions, peeling back onerous planning rules and boosting graduate migration would help London return to being an economic growth engine for the rest of the UK.

That’s according to the think tank the Centre for Cities, whose chief, Andrew Carter, yesterday urged policymakers to launch policies to reverse a sharp de-

cline in City’s economic performance.

According to an analysis of Office for National Statistics numbers, the Centre for Cities reckons the rate of growth in output per job in London has collapsed to just 0.2 per cent a year between 2010 and 2019.

That is a huge decline from the average annual increase of 2.7 per cent between 2000 and 2008.

“New York, Paris and Stockholm saw annual growth between 2007 and 2019 at 1.4 per cent, 0.9 per cent and 0.7 per cent, respectively,” the report said.

Responding to the study, a spokesperson for the Mayor of London told City

UK factories on the mend as recession U-turn gathers pace

A.M.: “London has less control over the tax we generate than any other global city. If ministers truly wanted to level up, it would give cities such as ours greater control over revenues to deliver economic growth and lasting social change for the benefit of the whole country.”

“More of the same old one-size-fits-all, command and control from Whitehall won’t do, and what’s needed instead is wholesale shifting of power from Whitehall to the mayor and local authorities,” Nick Bowes, chief executive of the Centre for London think tank, told City A.M.

JACK BARNETT

BRITISH factories are performing better than expected in another sign the economy is on course to perform a screeching U-turn and avoid a recession, a closely watched survey has shown.

S&P Global and the Chartered Institute of Procurement and Supply’s final purchasing managers’ index for the UK manufacturing sector nudged higher from an earlier estimate to 49.3 points last month.

That reading was above the consensus forecast but still below the 50 point threshold that separates growth and contraction, meaning factory activity dropped in February.

Experts said the figures send another signal that the UK economy was performing much better than people had feared it would at the turn of the year.

“UK manufacturing showed encouraging signs of resilience in February. Output rose for the first time in eight months, boosted by weaker cost inflation and reduced supply chain disruptions,” Rob Dobson, director at S&P Global Market Intelligence, said.