London doesn’t compete with other UK cities, it competes with global capitals

London should not compete with other UK cities, but rather global capitals, according to Karim Fatehi, CEO of the London Chamber of Commerce and Industry. The success of London's capital city has far-reaching effects on employment and funding for public services across the entire country. A truly competitive capital city draws international investment, top talent, and drives growth throughout the nation.

This level of success is achieved through careful planning by governments. Successful economies treat their capital cities' success as a national policy issue.

London's position as a global financial hub is crucial, and the city's competitiveness should be a priority for the Prime Minister. The upcoming budget, devolution white paper, and 10-Year Plan for Britain provide opportunities to ensure London's continued growth. However, moving investment away from London or reducing its competitiveness would be a grave mistake.

The benefits of investing in London do not simply go to another UK town or city; instead, they move to other global financial centers like Paris, Frankfurt, Dubai, or Singapore.

London and the South East contribute 45% of the UK's income tax bill, and London businesses pay 30% of England's business rates. With increasingly attractive investment prospects in global cities across Europe, Asia, and the Middle East, complacency cannot be an option. The government and Chancellor have levers they can pull to reduce business costs and support SMEs, alongside infrastructure projects that require political will but offer significant economic rewards.

To maintain its competitive edge, London must focus on a mix of pragmatic solutions, such as negotiating a new deal with the EU, restoring VAT-free shopping, reversing changes to the non-dom regime, designating King's Cross as an AI Investment Zone, and reversing increases in employer National Insurance contributions. Additionally, investing in airport expansion at Heathrow, Gatwick, and Luton could add billions to the UK economy and generate tens of thousands of jobs.

Supporting transport projects like the Bakerloo line extension, DLR extension to Thamesmead, and the next Elizabeth Line (Crossrail 2) can unlock thousands of homes, create skilled jobs, and generate hundreds of millions in tax receipts. Infrastructure projects have proven value, both during construction and once completed. While the public purse may not cover the entirety of these projects, innovative financing methods can help achieve their goals.

Furthermore, London must attract top talent globally, as businesses struggle to find the necessary skills. The social contract has fractured, making it difficult for young people to find jobs and afford living in the best city in the world. Lowering the cost of employment is essential for the UK's one million NEETs (not in education, employment, or training). Simultaneously, making housebuilding viable again in London can help repair the social contract.

The London Chamber of Commerce and Industry aims to persuade investors to choose London over other capital cities and encourage young people to consider London as their place to live, work, and build their future. This mission is national in scope, as London's success translates to the country's overall prosperity. When London thrives, Britain thrives.