Leveraging West London’s economic potential could add billions to the economy
Centre for London’s latest report outlines how London’s sub-regional economies (in West, North, East and South London) are critical to unlocking London’s economic potential.
Greater London, excluding Central London, contributes just under £35bn to the Treasury in VAT and other product taxes. In comparison, the combined contribution of both Scotland and Wales stands at £36.2bn. It’s clear that London’s sub-regions are holding their own when it comes to economic prowess.
The report, initiated with Ealing Council and supported by the West London Alliance and Imperial College London, explores the economic potential of West London as a case study of how we can harness the strengths of London’s sub-regions to boost the London and wider UK economy.
West London has a hugely influential economy. Home to Heathrow, Europe’s busiest airport, the sub-region’s consumer Gross Value Added (measure of goods and services produced, minus the cost of the inputs used to make them) is worth £70bn, larger than Leeds and Manchester combined.
Overall, between 2010-2024, the number of businesses has grown by 171% in West London, far higher than Central London’s growth of 50%. Since 2010, the science, innovation and research sector has grown by 43% in the region, with the WestTech Corridor providing key opportunities for growth.
The report found West London is increasingly an area chosen by small and medium-sized businesses to start up and grow, due to a range of factors such as land cost, transport links like the Elizabeth line, and diversity of complementary industries working alongside one-another.
Home to 2.1 million residents, when West London’s economy succeeds this is directly translated into better lives for residents, distributing growth among the local population. West Londoners disposable income rose by £2500 between 2019 and 2022.
However, despite such economic success, West London’s productivity has fallen 10.8% between 2010-22. We need to boost productivity to harness West London’s potential. Forthcoming research from Oxford Economics suggests that if each of West London’s industry sectors performed at the London sector average, West London would contribute an additional £7.3bn per year in GVA to the economy.
To allow this sub-region to reach its full potential, Centre for London recommends that national government goes further and faster in devolving power to local government. To support the continued growth of new economic opportunities, they recommend protecting industrial land in West London within the London Plan.
To capitalise on the strong foundation for growth in West London, national and London-based strategies such as the new London Growth Plan need to consider the unique economic environment of the sub-regions, supporting them to play to their strengths and grow London’s economy together.
Antonia Jennings, CEO at Centre for London, comments: “London’s economy is huge and complex. Each sub-region produces economic growth which amounts to the size of other UK cities.
As spatial and economic strategies are being rewritten, and new economic targets are being set, this moment in policymaking provides an ideal opportunity to factor in unique local contexts to strategies like the Growth Plan and the London Plan.
Not only will this ensure we reach London’s full economic potential, but it will also aid in re-distributing wealth amongst London’s communities. Economic growth must translate into a better life for all Londoners.”
Cllr Peter Mason, leader of Ealing Council, comments: “We are at a tipping point for London’s economy we need more homes but we also need the jobs that will allow people to afford those homes.
To deliver this we need to grow our economy and this doesn’t happen overnight. We need a clear understanding of how we will generate the wealth people deserve and are willing to work with anyone that wants to provide opportunities for our residents.
We want all parts of London to be as vibrant and dynamic as the heart of the city and that starts with understanding what we are good at and where different parts of London are best placed to exploit their unique advantages.”
David Francis, director of the WLA, comments: “This report highlights West London’s critical and growing role not only in the capital’s economy, but also in the UK’s wider economic success. With an economy bigger than Leeds and Manchester combined, world-class connectivity through Heathrow and the Elizabeth Line, and a thriving business ecosystem, West London can help drive the productivity step-change the country needs, while ensuring local residents share in the benefits.
Unlocking West London’s growth potential is clearly vital to the government’s growth mission. Key to this is devolution of powers and Government support to improve orbital connectivity, address energy constraints and establish a skills and employment system that is fit for the future.”
Amanda Wolthuizen, vice president, Strategic Engagement and chief of staff to the president of Imperial College London, comments:
“West London has all the characteristics needed to deliver a globally competitive innovation ecosystem that is a powerful engine for investment, inclusive economic growth and job creation for Londoners and the UK more widely.
With a diverse and skilled population, high quality existing and planned infrastructure including major transport links, and a rich industrial heritage, now is the time to grasp this potential and deliver on the promise of the WestTech Corridor in support of the government’s growth mission”