London's Economic Plan and Major Industries

This site offers detailed information on London's major industries and the London Plan for the economic growth of the UK's capital city.

As one of the world's foremost business and financial centres, London is the heart of the UK's economy and of vital importance to the country's financial stability and economic well being. London is of vital importance to the UK's financial stability and, because so many people are employed in its industries, to the economic well being of the whole of the south east of England.

The City of London

London's economic importance cannot be underestimated. In terms of industries, it is the financial sector which is the most important. Although creative, media, technology and manufacturing industries all operate from London, it is the financial services sector which dominates them all. Most of the banking, underwriting and trading markets that operate in the capital are base in the City of London. The City is centred on the so-called square mile that makes up the area to the north of London Bridge where you will find all of the most important financial institutions, such as the Bank of England and the London Stock Exchange. In recent decades, the Corporation of the City of London - which is in effect the local government for the City - expanded its operations to redevelop parts of docklands. So, the big towers surrounding Canary Wharf, to the east of the city centre, are also considered to be part of the City of London.

According to the Office for National Statistics' Inter-Departmental Business Register, there are some 14,385 businesses that operate from the City. In 2012, no less than 400,000 people were gainfully employed in the City, a large rise on the few years before. In addition there were 129,200 people working in the area of docklands. There are well over a million people employed in the UK in the financial services sector and well over one third of these people work within the City of London.

The City of London's contribution to the national income is huge. According to Oxford Economics, the proportion of gross national product which is can be attributed to the City is almost four per cent. The financial services sector represents 22.1 per cent of total income, or gross value added, for the entire earnings of the capital. Indeed, seen on a national basis, the financial services industry accounts for almost ten per cent of the total national income of the UK. According to the City of London's own data, the financial services sector - taken as a whole - made a tax contribution totalling £65 billion in the tax year 2012 to 2013. This massive figure represents nearly 12 per cent of all government tax receipts and much of it was generated in the City.

The Capital as a Whole

Again according to Oxford Economics, the capital makes a net contribution to the Chancellor of the Exchequer that is getting on for one fifth of the total tax revenue of the country. No less than pound;10 billion in tax revenue was received by HM Treasury in the tax year to the end of March 2012 from businesses operating from, or headquartered in, London.

Across London as a whole, most of the office space is held in the City of London, but if the boroughs of Westminster and Camden & Islington are taken together then they would outstrip it. Along with government, you will find many hedge fund companies and private banking firms here, among other sectors. In addition, there are a large number of offices on the south bank of the Thames, in Southwark and Lambeth, usually in the consultancy and accountancy sectors, as well as government buildings.

The London Plan

It is the Mayor of London's responsibility to keep London at the forefront of the world's economy and thereby to improve the lot of Londoners and other UK residents, too. His economic plan, known as the London Plan, is regularly updated. After a public consultation early in 2014, his latest amendments to the plan are being put into practice by the Greater London Authority. Any changes to the plan that the Mayor wishes to make must be passed by a vote of the London Assembly, a publicly elected body. The London Plan has six major published objectives. These are to ensure that:

  • London is a city which meets the challenges of growth, both economic and in terms of population.
  • The capital remains an internationally competitive city.
  • London is a city of diversity with strong and easily accessible neighbourhoods.
  • The city delights the senses.
  • London becomes a world leader in terms of bettering the urban environment.
  • The city is a place where it is safe and convenient for everyone to access opportunities and employment.

So how does London stay on top and ahead of the game? That's where the Lord Mayor's London Plan comes in. Covering everything from economic development to office space and employment, it is the blueprint for London's growth both now and in the near future.