London and the UK – a declaration of interdependence
London is a very successful economy, but it nevertheless shares several challenges that are common to the rest of the UK economy, including slow productivity growth, not enough investment, poverty and inequality. The report sets out the economic case for how success for the capital means success for the UK as a whole. It challenges the notion that London receives more than its fair share of investment, highlighting how its needs in areas such as transport and infrastructure are greater than any other city or region.
The key messages include the following:
- Inequality and poverty are still rife in London – average household incomes are no higher than the rest of the UK after London’s high housing costs are taken into account. On the same basis, the number of adults and children living in relative poverty is higher in London than anywhere else.
- Severe housing shortages and significant transport congestion mean substantial public and private investment is required in London to meet demand.
- Spending on public services per head in London is not particularly high when compared to the rest of the UK – and compared to economic output, it is among the lowest of all regions.
- London has deep economic links with the rest of the UK in terms of trade, people, finance and ideas. Rebalancing the UK economy cannot be achieved by constraining London growth, but rather by increasing productivity and competitiveness across all regions.