It’s a hub, not a hellhole. Labour should give it more love
Illustration: Carl Godfrey
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B oth the right and the left enjoy bashing London. MAGA types depict it as overrun by machete-wielding youths. President Donald Trump claims it has “no-go” areas and is partly subject to sharia, or Islamic law. Nigel Farage, the leader of Britain’s leading populist-right party, has claimed that “crime is out of control” and the city “is in a state of collapse”.
Attacks from the left imagine a very different city. Rather than a woke hellscape, it is a place immiserated by fat cats who ate all the caviar. Members of Britain’s ruling Labour Party gripe that London has prospered for too long at the rest of the country’s expense. The prime minister, Sir Keir Starmer, mentioned it only once in his party-conference speech last year—to demand more investment elsewhere. Such rhetoric plays well: a poll for The Economist found that only 17% of Britons think Britain would be better off if London were richer.
Both these visions are wrong. London is one of the world’s safest big capitals. Violent crime has been falling there for years. The homicide rate is at its lowest since comparable records began. No big American city comes close: residents of Miami are almost six times more likely to be killed.
And far from prospering, London has struggled since the financial crash and Brexit. Output per worker there is lower in real terms than it was in 2008. That hurts Britain. London’s lost productivity growth accounted for 42% of the nationwide slowdown in 2007-19.
There is not, as some assume, a zero-sum trade-off between London and the rest of the country. When London grows, it pays more taxes to subsidise everyone else and generates demand for regional businesses. It is the workhorse of the economy, producing a quarter of national output. Its competitors are not Manchester and Leeds, but New York and Tokyo.
Labour should be sweating Britain’s strongest asset, not neglecting it. Despite its problems, London still has a story to tell. It remains the world’s second-largest financial centre (after New York) and produces more unicorns ($1bn-plus startups) than anywhere else in Europe. Four of the world’s top-ten universities lie in its orbit. Above all, the world’s best and brightest flock to the capital.
London’s future—and Britain’s—depends on continuing to be a magnet. The siren calls of places like Dubai are ever more tempting, with their low taxes and cheaper housing. Yet while Milan and Singapore roll out the red carpet for expats, Labour pulls up the drawbridge. Rather than squeezing non-permanent residents for extra taxes, the government should put the tussle for talent at the heart of its growth strategy.
What to do? One step is to overcome Britain’s self-sabotaging migration rules. Mr Trump’s curbs on skilled migrants have created an opportunity. The Economist ’s footloose index finds that disgruntled American graduates would sooner go to Blighty than anywhere else. Yet Labour plans to reduce the length of graduate visas and double to ten years the default time to get permanent settlement. It should reverse high visa fees and charges (which can be over £10,000, or $13,800), provide easier paths to citizenship and make clear that—ten years after the Brexit vote—clever foreigners are still welcome.
Another obstacle is housing. Renting a flat gobbles up more of a typical income in London than in Paris or Tokyo. “Affordable-housing” rules discourage development; instead Labour should make it much easier to build. Last, London needs to renew its creaking infrastructure. The success of Crossrail, an east-west train line, shows the demand for new transport links. London does not need big handouts from central government to build them. It needs greater borrowing and tax-raising powers to be devolved to the mayor.
To Make London Grow Again, the government should tie commuter towns more tightly into London’s economy, integrating transport links and relaxing green-belt rules that block construction there. London’s footprint could grow—and its economy with it.
The 19th century offers a lesson. Then, London and Britain boomed together. Factories sprouted up across the north during the Industrial Revolution, their success buoyed by a surge in trade, finance and services in the capital. Revitalising London would benefit the rest of the world, too. Truly global entrepots are enablers of human progress, places where ideas, capital and talent can mingle and multiply. As America puts up barriers and China’s cities remain hard to move to, such places are rare. Labour should show London some love. ■
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