Cllr Elizabeth Campbell is the Vice Chairman of London Councils and the Leader of Kensington and Chelsea Council
Britain’s economic engine is being held back. The capital drives more of the national economy than any other part of the country, yet its own growth has stalled for over a decade.
In 2024/5, London made a net fiscal contribution of nearly £50 billion to the Treasury, while also producing around 31 per cent of UK exports. Yet productivity growth in the capital was around 0.1 per cent a year between 2008 and 2022.
The London Growth Plan estimates that restoring annual productivity growth to two per cent could make London’s economy £107 billion larger by 2035 and generate an additional £27.5 billion for the Treasury.
Unlocking that potential across the capital is not special pleading for London. It is firmly in the national interest.
Plans and targets alone will not deliver growth. Businesses need the freedom and confidence to invest, employ and expand. Communities need homes, infrastructure and skills. And local leaders need the powers and resources to make those things happen.
For too long, Britain’s government has been far too centralised. Devolution is an opportunity to bring decision-making closer to communities and businesses, but it should not simply mean transferring power from Whitehall to City Hall.
Conservatives should be the party of devolution because we believe in freedom and responsibility. Local leaders should have the freedom to use resources better, retain a fair share of the growth they create and be held accountable for the results.
Labour talks about devolution, but cutting borough funding while imposing new costs and taxes is the opposite of empowerment. If ministers genuinely trust local government, they must give boroughs the freedom and financial stability to deliver.
Borough budgets are already under severe strain delivering vital services, from temporary accommodation to SEND. Labour’s reductions in council funding for many boroughs will inevitably affect our ability to provide these services for some of our most vulnerable residents.
It will also impact our ability to invest in local growth. Our businesses do not ask government to run them. What they want and need are safe streets, reliable infrastructure, sensible regulation and the confidence to invest. As a council, we can support that through business mentoring, grants for entrepreneurs and high-street regeneration, but our ability to invest is being squeezed.
It’s not just residents feeling squeezed. Small and medium-sized firms are the backbone of our high streets and communities, accounting for 40 per cent of jobs in London. Yet many face rising costs and growing barriers to investment.
Business rates are an obvious place to start: the threshold for small business rates relief has been frozen for too long and bringing it up to date would give these businesses the confidence to invest and grow.
Growth also depends on infrastructure. The Bakerloo Line extension and West London Orbital could together support more than 45,000 new homes and around 20,000 jobs, showing how transport investment can unlock development and connect people to opportunity.
But moving power from Whitehall to City Hall is not genuine devolution if London’s boroughs are then expected simply to carry out somebody else’s decisions. Boroughs have the local relationships, knowledge and delivery power to help shape the capital’s success.
We understand our communities and local economies and are already responsible for many of the services on which growth depends.
That is why genuine devolution must reach the boroughs. If local leaders are expected to drive growth, they should have stable funding, greater control over existing resources and a real financial incentive to generate additional growth.
Levelling up the country need not mean levelling down London. The right devolution deal would remove barriers facing businesses and unlock the housing, infrastructure and investment London needs. That would be good for the capital and good for Britain.
That is the debate we will take to this year’s Conservative Party Conference at London Councils’ fringe event, “No Growth Without London: Is Britain backing its economic engine?”, on Tuesday 6 October from 12pm to 1.15pm at the ICC in Birmingham.