Cllr Ellie Cox is a councillor in the London borough of Merton, a former 2024 parliamentary candidate in Mitcham & Morden and a 2024 London Assembly candidate for Merton & Wandsworth.

At the Royal Academy of Arts recently, a sketch by Victor Hugo caught my eye: a giant poisonous mushroom looming over a desolate landscape. It could just as easily represented Sadiq Khan’s mayoralty — slowly smothering London’s potential. Despite billions in private and public investment in tech, creative, and digital sectors, Londoners are still waiting to see real gains in jobs, productivity, and living standards. Under Sadiq Khan, much of the capital’s global status comes not from City Hall policy, but from its enduring role as a world-class financial and cultural hub.

With Rachel Reeves claiming that improving productivity will be central to her next Budget, we must understand what truly drives it — something Labour believes comes from higher taxes and more state spending, but in reality depends on lower taxes and freeing up the private sector to grow, invest, and innovate.

London’s productivity problem

The data reveals that between 2019 and 2023, London was the only UK region where productivity fell, according to the Office for National Statistics. Years of underinvestment in infrastructure and technology, weak business growth, and a large economically inactive workforce have all contributed to London’s productivity decline.

Sadiq Khan’s inaction and misplaced priorities have also held London back. Delayed transport upgrades, pursuing a green agenda with considerable economic costs, and a focus on central London investment over outer boroughs have weakened the city’s competitiveness. The effects are felt in everyday life: slower wage growth for many, fewer job opportunities, and higher living costs for Londoners.

In 2025, Sadiq Khan launched his London Growth Plan, pledging to add £107 billion to the capital’s economy by 2035. The ambition is clear — but the approach is deeply flawed. His Plan prioritises socialist ideology and shows a discomfort with wealth and aspiration—the word “aspiration” appears just once in a hundred pages—ignoring the fact that productivity rises when hard work and wealth creation are rewarded. His Plan also has a focus on “green growth” and achieving net zero by 2030, risking competitiveness by making energy, transport, and business operations more expensive.

His Growth Plan assumes London’s growth depends on more public spending and centralised intervention rather than removing barriers and reducing costs to allow private business to invest, compete, and succeed. For example, it proposes a £20 million “large-scale intervention in SME finance,” partly funded by taxpayers. In reality, investment depends on private capital, not government grants and investments, and the billions London needs far exceed what City Hall or the state can provide.

Why London must be led by a pro-capitalist Mayor

The best way to help Londoners is by creating opportunity — access to jobs and to finance for innovative businesses. London must be attractive to wealth creators, welcoming millionaires and billionaires who provide critical early-stage funding, create businesses and jobs, and often support philanthropic causes.

The city must also offer the right incentives — lower taxes that reward hard work, ambition, and risk-taking — to attract global talent. People work harder, innovate, and invest in themselves when they can benefit from their success. Any credible London Growth Plan must go hand in hand with a government committed to lower taxes and wealth creation.

Growth also depends on having a London Mayor who understands how business growth happens and is committed to creating the conditions for it. That means cutting regulation and avoiding policies that make it harder for businesses to operate and adapt — something Labour’s proposed Employment Bill would undermine through more red tape and reducing business flexibility.

A Mayor can make a real difference by backing the sectors that sustain London’s jobs and prosperity, pressing government for targeted relief, and using devolved powers such as local business rate relief, planning flexibility, and funding skills programmes to ease the burden on key industries.

Talent, job creation, and an affordable London

To enable more people to work in London, it must be affordable. High living costs erode confidence in politics — as seen in New York, where failure to address citizens’ concerns about the cost of living helped Zohran Mamdani, a self-described socialist, win the mayoralty. When people feel their economic needs are ignored, they often turn to more radical political sentiment.

Affordable housing is central to this. Despite £4 billion in government funding, Sadiq Khan has delivered fewer than 1,000 new affordable homes, driving talent to other UK cities and abroad. Scrapping stamp duty would cut costs, allowing people to move into homes that better suit their needs, freeing up family housing, and helping to retain skilled workers in London. Supportive policies for private landlords are also needed to increase rental supply, which should help lower rents. Labour’s Budget plan to raise income tax only makes it harder for Londoners to save for a deposit and reduces mortgage affordability.

Training programmes and clear education pathways that equip people with the skills employers need are essential, especially as technology and AI transform the job market. Equally, an immigration system that works for business is critical to keep London as a global hub for international talent. A net-contribution approach, as proposed by Kemi Badenoch, would welcome workers who create jobs, innovate, and strengthen the economy, prioritising those who genuinely contribute to the UK’s success.

An under-used workforce

We must get more Londoners working. Around 30% of working-age Londoners — roughly 1.3 million people — are economically inactive, neither working nor seeking work (Trust for London). Another 365,000 are unemployed and actively seeking jobs, leaving London with one of the highest jobless rates in Britain at 6.2% (ONS, July 2025).

A key reason are Labour’s policies, including their employer National Insurance increase and reduction in business rate reliefs, which hit hospitality and retail particularly hard — sectors employing over a million Londoners. Labour’s policies have directly made more Londoners jobless. Welfare reform, targeted skills development, pro-growth, pro-business and low tax policies are urgently needed to unlock this untapped potential.

Financing growth, not stifling it with taxes and regulation

Businesses often rely on finance to grow and improve productivity. Since the financial crisis, when adjusted for inflation, lending has stagnated or even fallen. Competition is beginning to drive lending forward, but more is needed — regulatory reform that enables new entrants and innovation in finance.

Private capital is the lifeblood of early-stage growth businesses, often provided by wealthy individuals living in Britain. Beyond being an attractive place to live for to such investors, we need more policies that encourage private investment into British businesses, as I discussed in a previous article. In 2023, London’s startups raised around £10.2 billion across AI, fintech, and life sciences, showing how private and institutional investors fund innovation and create jobs.

Investment and international influence: London needs a Mayor who can win deals

London needs a Mayor who can attract investment and secure deals, as Andy Street did in the West Midlands, raising £4 billion from Legal & General for regeneration and housing. Under Boris Johnson, London saw major projects that revitalised parts of the capital and supported startups beyond central London, including the development of cycle superhighways, promotion of East London Tech City, and the Olympic legacy in East London, bringing jobs, investment, and long-term growth.

By contrast, Sadiq Khan’s record shows missed opportunities. His long-running feud with Donald Trump meant London was absent from high-profile discussions with CEOs of Microsoft, Apple, OpenAI, and Nvidia, at the State Banquet, losing chances to promote the capital and attract investment and jobs.

This matters because London’s global competitiveness depends on modern infrastructure — digital connectivity, AI readiness and smart‑city solutions are essential for innovation‑led growth, as I highlighted in a former article. UK businesses lose billions to cyber‑crime each year, and Marks & Spencer’s recent £300 million loss underscores the need for secure, world‑class digital infrastructure. While London remains a leading tech hub, it continues to lag in 5G and data‑network performance. Strengthening infrastructure and safeguarding cybersecurity are critical to attracting talent, investment and new business — something Sadiq Khan’s record leaves in serious doubt.