1. London’s Role in the UK Economy – and the Future Challenges it Faces
Tony Travers
London School of Economics & Political Science

2. Decentralisation after 1945
Pre-war Barlow Committee suggested that the UK economy needed to be ‘decentralised’; WW2 intensified debate about over-centralisation
Certificates required to open factories in London and SE from 1950s to 1970s
Location of Office Bureau moved office jobs from central London
Also planning policies to disperse population and provide better homes in new towns and beyond
Policy intended to spread economic success actually damaged London economy
Population dropped by two million, projected to go to under six million
Though wider South East (and outer London) continued to grow

3. London’s decline, 1945 to 1985
London’s population declined from 8.6m to 6.6m between 1945 and 1985
Expansion of wider metropolitan economy within South East
Location of Offices Bureau set up in 1963: permits required to develop offices in central London
170,000 to 200,000 jobs relocated (mostly to surrounding areas)
Office rentals rose sharply in central London
Employment and older industries, eg Docks, declined fast
Impact on inner London in particular

4. Relative decline of urban England 1931 to 2001
Source: Centre for Cities Cities Outlook 1901

5. London’s share of UK GDP, 2016

6. London’s economy today London’s share of GVA by industry

7. Changing growth sectors

8. London survived the recession - GVA growth, 2010 to 2015
Source: ONS

9. GVA per head, by nation/region, UK - 2015
Source: ONS

10. GDHI per head, by nation/region, UK - 2015
Source: ONS

11. % difference between median income in each region/nation of Great Britain and overall median income, 2013–14 to 2015–16 - allowing for housing costs
Source: IFS

12. 90:10 ratio, 1974 to 2014, GB nations/regions -
NB: ‘90:10 ratio’ compares incomes at the 10th percentile with those in the 90th percentile
Source: IFS

13. Net fiscal balance, by nation/region, 2016

14. % difference between median income in each region/nation of GB and overall median income to 1976 compared with 2013–14 to 2015– 16
Source: IFS

15. London’s regional economy: the Greater South East
Source: Sir Peter Hall, Is the Greater South East a Mega-City Region? IPPR, 2004

16. London’s regional economy: - comparison with Paris and New York
GDP (£bn)
London
(Greater South East)
695
New York
(17-County NY/NJ metro)
885
Paris
(Ile de France)
500
Sources: Office for National Statistics; US Department of Commerce, Bureau of Economic Analysis,
GDP by metropolitan area, Table 1; INSEE, Produits interieurs bruts regionaux et valeurs ajoutees regionales de 1990 a 2012

17. London and Brexit - net ‘leave’ vote, by nation and region

18. Jobs in London by SIC and place of birth - if migration fell substantially, what impact?
Source: Greater London Authority

19. Labour Market Statistics - 15 November 2017

20. What can be learned from London’s recent success?
Economic circumstances may depend on changing global factors
And, now, Brexit
London is both internationally and nationally focussed
Immigration is crucial for image, economic dynamism and also investment
Planning for economic development requires flexible governance responses to change and far better infrastructure
Transport, housing, schools, health facilities, electricity, telecoms etc

21. Conclusions
London has redeveloped itself since the 1980s as a dynamic and fast-evolving city
Its economy is not over-concentrated in particular sectors and attracts international investment
Language, time zone, stable government, legal systems and tolerance are elements in its image and success
Capable of retaining tradition and allowing the new to develop….

22. London’s Role in the UK Economy – and the Future Challenges it Faces
Tony Travers
London School of Economics & Political Science