How the next Mayor can help London businesses to thrive

Housing, skills, and digital connections should be high on new mayor’s agenda to ensure London remains a great place for businesses and their employees.

In the recent London mayoral hustings, aspiring candidates have been at pains to persuade us that they will make sure the capital remains a great place in which to live and work. But for that to happen, London has to be a good place for people to run a business and succeed. Once the winner is declared on 6th May, focus will immediately turn to how the new Mayor can turn their rhetoric into reality and deliver for Londoners – whether employees or employers.

The new Mayor takes office as the number of people living in the capital reaches its highest level since 1939. London is forecast to reach a population of 9 million by 2020, and to achieve ‘megacity’ status (over 10 million citizens) by 2030. Whoever becomes the next Mayor will therefore have to take many important decisions to prepare for the London population of 2020 and beyond. That’s why London Chamber of Commerce and Industry has been passionate in promoting Towards a Greater London – a twenty-step agenda the new Mayor can pursue to ensure our capital is an even better place for people to live and work in, and for businesses to thrive.

First on that list is taking action to fix a housing crisis in which chronic undersupply impacts on both employees and employers. More land is required and builders need to be empowered to address this issue. With demand for homes to buy and rent dramatically increasing, it makes sense to review the status of poor quality land within the green belt, which could help identify many small plots that smaller developers could build on. City Hall could also establish a Small Developers Panel to make a contribution towards the 50,000 new homes that London will need every year ahead.

Building homes requires more builders, and that’s why the new Mayor must move to close the skills gap. We have previously documented the construction skills gap, but more broadly all London businesses need access to a diverse, skilled workforce. Improved training and enabling more businesses to recruit overseas will help. Every schoolchild should be provided with quality careers advice from year seven and City Hall should secure primary control over the Skills Funding Agency budget to enable demand-led training.

While improving the domestic skills base is highly desirable, results may come on a longer-term basis. But the skills gap needs attention now, and while it may be difficult for a politician to advocate more immigration, it would be prudent to promote a ‘London Visa’ – third party sponsorship facilitated by well-established organisations – to underpin non-European Economic Area worker cover for certain smaller business with specific, recognised skills shortages.

Much business and commerce is now online, yet we have found that many of London’s smaller firms face challenges in developing and sustaining an online presence. The next Mayor must lead efforts to boost digital capability. Treating digital infrastructure as a key utility will provide greater connectivity. With almost a quarter of London firms having no active online presence, City Hall could set-up a business panel focused on raising awareness of the benefits of having a web profile. At the same time, encouraging developers and landlords to fit high-speed connections in building plans would be also help.

London’s ageing transport infrastructure often faces overcrowding and congestion but the new Mayor will be expected to keep transport moving. Targeted investment is essential to service a rapidly expanding population.

The capital is awash with international investors and pension schemes looking for secure investments, and the new Mayor must work to persuade suitable investors of the benefits of appropriate support for future London strategic infrastructure projects – whether in rail, road or air.

It will be a challenge to deliver on all these issues, but part of that challenge comes from the limitations on the Office of Mayor of London. Greater powers will be needed to accommodate London’s future population and so the next Mayor must strive to secure more power to grow. Retaining more London-generated taxes and acquiring new competencies will be key, and City Hall should consider an update of the London Finance Commission report on the potential for greater financial devolution. We have to look at how London’s Mayor retains 7 per cent of London taxes compared to the New York Mayor’s 50 per cent. As the devolution revolution spreads across England, London cannot be exempt and so the new Mayor should engage with the London boroughs to explore how clusters of combined authorities could drive greater economic cooperation in many of the localities across our capital.

Of course, London is a global city and our next Mayor will have to be an active ambassador ready to champion London businesses on the international stage. London Chamber organises several overseas trade missions a year and we will invite the new incumbent at City Hall to join us in Asia, Africa and the Americas in seeking to progress new trade and export opportunities for capital businesses.

*This blog was first published by the think tank Centre for Cities.

Colin Stanbridge, Chief Executive of LCCI

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