As local and national elections approach, Shadow Chancellor Rachel Reeves and London Mayor Sadiq Khan write in City A.M. to set out a new vision for the capital’s relationship with central government
2024 is a year of historic choice over the future of Britain’s economy: between managed decline and restoring growth. It is also a year of historic challenge: to lay the foundations for a decade of national renewal.
Labour has put the drive for economic growth at the heart of its plan for our country’s future. It is how we will rebuild our public services, support job creation and enhance living standards. Britain’s future relies on guaranteeing stability, stimulating investment and enacting widespread reform, as well as forging strong relationships with the private sector.
The past eight years in London serve as a great example of what a Labour administration in partnership with business can achieve. Some 330,000 jobs have been created through City Hall initiatives, 12,000 businesses have been helped to start, sustain and scale up and London & Partners – the capital’s business growth and destination agency – has brought an extra £1.52bn of investment into the capital.
While the Conservative government’s approach to infrastructure has become increasingly penny wise and pound foolish, the completion of the Northern line extension and the Elizabeth line demonstrate the scale of London’s ambition. The total number of housing completions recently hit their highest level in our capital since the 1930s, while City Hall now also offers free skills training to any Londoner who does not have a job or is in a low-paid one. And the capital has experienced a sixfold increase in the number of employers paying the London Living Wage, proving once again that the dynamic economy gives rise to the fair society.
London’s economy is now growing faster than any other region of the UK. Last year alone, nearly £40bn pounds net flowed from the capital into the Treasury’s coffers and it is the only region that has contributed more to the public purse after the pandemic than before. Despite London’s economic value, ingenuity and resilience, successive Conservative governments have tried to talk the capital down for political and electoral gain. As Chancellor and Mayor, we will reset the relationship between national government and our great capital. When London succeeds the rest of the country succeeds, and vice-versa.
Labour’s vision is not just for London but for our entire nation. We support the ambition of levelling up. Regional inequalities mean that you will earn less and die younger simply because of where you were born. Putting that right will be a central cause of a Labour government, but it will not be achieved by diminishing our capital. Instead, under Labour, new ideas will be embraced, barriers to growth will be removed and every pound of investment will be pursued. We will introduce new legislation providing a new, clearer framework for mayors to take on powers over transport, skills, enterprise, energy, planning, restoring our high streets – generating growth in every town, city and region of the UK.
As a precursor of things to come, with a Labour Mayor, the capital will deliver a new London Growth Plan, with a target of 150,000 good jobs by 2028. By boosting jobs and growth in finance and business services, retail, hospitality, leisure and tourism, manufacturing and construction, the capital will show it remains an ideal home for established industries. And by championing health and life sciences, fintech, AI, creative industries and climate tech, London will retain its mantle as a leading destination for new ones. Young Londoners, especially those from lower-income households, will be given their chance to secure these well-paid, high-skilled jobs.
The record shows that London’s progress, unfortunately, has not been replicated across Britain. Every government is ultimately judged on its handling of the economy – and history will not be kind to the Tories during this period of rule. Austerity has left public services teetering on the brink of survival. The botched Brexit deal has resulted in more red tape and more uncertainty and held economic growth down. Millions of homeowners and renters are still struggling to pay the bill left by Liz Truss and Kwasi Kwarteng following their disastrous mini-budget, a catastrophe championed by the Tory candidate for London mayor no less. After 14 years at the helm, the Tories have left our economy in recession and our people struggling through the worst decline in living standards since records began.
This is not a situation any new government would wish to inherit, but Labour’s ambitions remain undimmed. We will implement an industrial strategy which forges a new Britain, confident of its place in the world: resilient, sustainable and outward-looking. We will build an ever-closer relationship with business based on mutual respect and shared ambition. We will create a labour market which creates prosperity through decent income and secure work. And we will provide world-class public services offering opportunity to all. Under Labour, our economy will grow, our businesses will succeed and our people will prosper.
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