London leading UK job growth, but why?

The report published by the Centre for Cities think tank gives detail the rather unsurprising news that economically speaking London is outperforming the rest of the UK.  The smug and London-centric response would be to say “aren’t we great” and leave it there but while good news in the short to medium term this geographic unbalance isn’t sustainable.

As a born and bred Londoner I’m immensely proud that London has maintained it’s market dominance, I want London to be the head of the pack, but it is also good for London to have the pack snapping at our heels. Alexandra Jones, the chief executive of Centre for Cities is right when she says “The gap between London and other UK cities is widening and we are failing to make the most of cities’ economic potential”.  It simply isn’t possible for London to host all of the UK’s economic activity, the country needs to ensure that the UK’s other cities are also growing and developing their national and international potential.  London also does business with the rest of the UK so it’s in London’s economic interest for the rest of the country to do well.

The traditional response of the Left, and I include Vince Cable in that description, is to look to tax London even harder and use the money to prop up other regions.  This would be short sighted and stupid, it would hamper London’s ability to compete with its international rivals and won’t generate enough money to make meaningful change elsewhere.  The best way to pump money into the regions is to free up their businesses, cut red tape, reduce the cost and bureaucracy of employing people and let the trade effectively with London and further afield.

The Centre for Cities also supports the London Finance Commission’s report on increasing the financial autonomy of cities, they say  “Devolving more funding and powers to UK cities so they can generate more of their own income and play to their different strengths will be critical to ensuring this is a sustainable, job-rich recovery.”

The message should be clear, let’s free up the UK’s cities and not let envy or economic myopia cause policy makers to hamper London.

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