To conclude our current project on devolved cities we finish with the city with the longest history of devolved government: London. We find that, far from being a different country that has pulled even further away from the rest of the UK since the financial crisis, London’s post-crisis recovery has been remarkable similar to that of the rest of the country, in good and bad terms. Good in that the city now has an employment rate in line with the UK average, bad in that productivity growth and pay growth have both been sluggish. Where London is unique is that it has a number of looming problems – demographic change, high living costs and inequality – that are relatively unique, and which make the city a particularly challenging place for those on low-incomes.
Key London statistics
- Between 2000 and 2010 productivity in London grew 25 per cent fast than in the rest of the UK. Since 2010 London’s productivity growth has lagged behind the rest of the country.
- London’s employment rate is now almost 5 percentage points higher than its previous peak and is just below that of the UK (75.2 per cent compared to 75.6 per cent).
- Since 2009 London’s labour force has expanded by 19 per cent and international migrants have accounted for almost all of this. People born in the UK have accounted for almost none of the net increase in the capital’s labour force since 1994.
- The typical pay rise for someone switching jobs is 3.2 per cent higher in London than for elsewhere in the country.
- Had housing costs grown in line with incomes since the late 1960s the typical Londoner would be £5,400 better off.
- Since 1990 typical incomes have grown by a quarter for the working-age population, they have nearly doubled for pensioner households, and have increase by 133 per cent for the top 1 per cent.
- London is the only region in Britain, aside from the North East, where poorer families (those at the 25th percentile of the wealth distribution) born in the 1960s have almost no net wealth.