London Mayor Sadiq Khan has announced a bold plan to boost the city’s economy by more than £100 billion within the next decade. This initiative, dubbed the “London Growth Plan,” aims to revamp the capital’s productivity growth to pre-2008 financial crisis levels. The plan focuses on key areas such as housing, transport, education, high streets, and business support, with a strategic allocation of over £300 million in central government skills funding. This funding is set to support the creation of over 150,000 jobs, emphasizing fair pay and quality work, fulfilling a key campaign promise Khan made before his historic re-election to a third term.

Public transport in London is set for significant upgrades, including extending the Docklands Light Railway to Thamesmead, furthering the Bakerloo line to Lewisham, and establishing a new West London Orbital overground service. A central goal of Khan’s plan is to restore London’s productivity growth to an average of 2% annually between 2025 and 2035, which, if achieved, could see an additional £11,000 in average earnings for each of the city’s nearly 9 million residents and generate an extra £27.5 billion in taxes by 2035. However, this ambitious objective represents a departure from recent trends, as London’s productivity growth has been significantly slower than the national average over the past 15 years, growing by only 1.5% in real terms from 2008 to 2021, compared to a 6.9% increase nationally.

Khan is optimistic, arguing that the plan presents a golden opportunity to significantly bolster growth and unlock London’s full potential for the benefit of all Londoners and the nation at large. He emphasizes the need for growth that is felt by the people and brings tangible improvements to their communities, raising living standards and public service investment. This vision aims to build a fairer, more prosperous London for everyone. Specifically, the plan aims to combat the recent decline in national productivity levels, which have been falling, with the Office for Budget Responsibility projecting a trend growth rate of only 1.25% by 2029. The latest figures show a 0.9% decline in London’s productivity in 2022, the sharpest among all regions, underscoring the scale of the challenge facing the Mayor’s plan.

Source: https://www.theguardian.com/uk-news/2025/feb/27/sadiq-khan-wants-to-add-100bn-to-london-economy-by-2035