London’s National Economic Contribution

Danny Beales Excerpts

Thursday 10th July 2025 Westminster Hall

[Danny Beales (Uxbridge and South Ruislip) (Lab)]

It is an honour to serve under your chairmanship, Mr Western. I too thank my hon. Friend the Member for Kensington and Bayswater (Joe Powell) for securing this important and timely debate.

Often, when people think about London’s economy, they think about the City banker at the Bank of England or the towers at Canary Wharf, but London’s economy is so much more than that. The value of London’s economy is dynamic and diverse, and it is visible in outer as well as inner-London boroughs such as Hillingdon, which my constituency lies in.

Uxbridge and South Ruislip is central to London’s economy and our industrial landscape. We are home to major manufacturers such as Coca-Cola Europe and General Mills, which makes everyday products that hon. Members might know, such as Green Giant sweetcorn, Old El Paso and many other good—but perhaps not good for the waistline—products. They are key contributors to the UK’s food sector, which the Government are rightly elevating in their new national food strategy. We are also home to key transport and logistics businesses, with two airports—Heathrow and RAF Northolt—and major freight routes linking up the rest of the country.

We are home to key life sciences organisations and institutions. I recently had the privilege of meeting AAH Pharmaceuticals, which distributes huge amounts of pharmaceutical products just in time to local community pharmacies across the country. There is also our contribution to the defence sector, which the Government are rightly backing with increasing proportions of GDP to rebuild our armed forces. We are home to armed forces industry businesses making parts for our submarines and frigates, our RAF Northolt base, and our service personnel and other associated contractors. The care and health sector also features prominently in our borough, and provides jobs for thousands of residents. The economic case for the role of care is clear, and it is a key growth sector for our economy in London, as well as the country more broadly.

In Uxbridge and South Ruislip we are not just delivering today’s jobs, but tomorrow’s economy. I have had the privilege of meeting with Brunel University, a national leader in engineering and life sciences with a recently opened new medical college. Uxbridge college, our further education institution, has just agreed a partnership with MIT in the United States on engineering, which shows the future-facing nature of our education sector, underpinning the UK’s goal to become an innovation superpower. It is vital that we invest in further and higher education and our skills sector if we are to grow.

London’s economy contributes £500 billion annually to the UK economy. That is both central and outer London. Although we do not agree on much, I am sure the hon. Member for Ruislip, Northwood and Pinner (David Simmonds) would agree that industrial clusters in outer-London boroughs such as Hillingdon are important in their own right, and are exactly the sort of regional engines of growth that our industrial strategy should back. The strategy talks clearly about supporting city regions and clusters with key industries, and Uxbridge and South Ruislip, and Hillingdon more broadly, are perfectly fitted to that model.

There is a growing view that London should take a back seat in investment compared with other parts of the economy, but that is a false economy. When London grows, other regions grow too. The links between regions and nations in the United Kingdom are clear in terms of jobs, tax revenues, exports and supply chains. I remember being the cabinet member for the economy and regeneration in Camden for seven years, when I was involved, to my pleasure, in the knowledge quarter developing around life sciences, tech and AI, with huge multinational businesses, spin-outs and start-ups. It was not just a story about the growth of London and King’s Cross; businesses there were connected to the Cambridge and Oxfordshire arc, and places such as Leeds and other northern cities. Growth in the knowledge quarter benefited the whole UK economy. That is true of so many of London’s economic growth clusters.

Growth in London is not automatic, and it cannot be taken for granted. It needs fostering and investment. That has not always happened effectively over the last 14 years. Issues such as energy grid constraints, particularly in west London, are holding back growth, house building and the expansion of key institutions and organisations. It is vital that we deal with grid connectivity if we are to support London’s growth. Transport investments are key to growth not just in central London, but outer London too. Freight infrastructure needs investing in and we need to support workforce mobility. I concur with my hon. Friend the Member for Brent East (Dawn Butler) when she praises the value of the Elizabeth line, and not just because I take it to work four days a week here in Parliament; it has generally transformed so many parts of our city and other growth towns along the way to Reading and Maidenhead too.

I recently visited the CLIP project, the Central line improvement programme, and it talked directly about how new trains for the Piccadilly line were being built in places such as Derbyshire. There were huge links with jobs, skills and growth through the investment that TfL is making. We need to go further and faster to keep our city moving. The Elizabeth line, particularly the Maidenhead and Reading branch which serves West Drayton, is nearing capacity due to its success. It needs extra trains quickly, and I hope the new stock that this Government have supported financially will serve the Reading and Maidenhead branch. We also need investment. It is a shame, having completed Crossrail 1, that Crossrail 2 is still just an idea and there is not a spade in the ground. Ideally, spades would have continued to move and the digging machines would have moved forward in building Crossrail 2, and we would now be planning Crossrail 3 and 4 to meet the city’s needs and unlock growth potential for the UK economy.

As hon. Members have mentioned, policing and crime is not just a safety issue; it is an economic issue too. Business growth and confidence depend on public safety and people being able to invest, open businesses and go to businesses and high streets with the confidence that they will be free from crime and disorder. Policing in London performs two roles—a local policing role, and vital central and national roles too. That was not always considered when funding was allocated. As hon. Members have mentioned, we vitally need investment in the Met to ensure that it can do both those things to the best of its ability.

[Deirdre Costigan]

I thank my hon. Friend, and almost constituency neighbour, for giving way. Does he agree that it is important that we have more police on the ground in London, which I believe this Government are ensuring, but also important that those police have powers —which has not happened over the last 14 years? Therefore, would my hon. Friend welcome this Government’s new Crime and Policing Bill, which will bring in respect orders and will also ensure that police can take action against shoplifters who were getting away scot-free under the last Government?

[Danny Beales]

I completely concur. I have recently been visiting shops, including Sainsbury’s, in my constituency, and have been told of the awful situation over the last 14 years, with theft and shoplifting skyrocketing, and people having a licence to shoplift with the £200 rule under the last Government. Staff in those shops welcomed the news when I told them about the protections for shop workers and the scrapping of the £200 rule. Lots of other measures in the Crime and Policing Bill are strongly needed and much overdue. I completely concur with that point.

Housing has also been mentioned and is vital. I welcome this Government’s record commitment and investment into housing. I believe around £11 billion of that investment will come to London; that is crucial. We have huge amounts of stalled sites, some half-built, in Hillingdon. In Uxbridge, at the St Andrew’s site, the concrete core is up, but the cranes went a number of years ago due to the Liz Truss mini-Budget chaos. A number of other sites, including at the former Master Brewer, have planning permission for hundreds of homes which could make a vital contribution to solving our housing and temporary accommodation crisis. They need bridging capital, investment, loans and investment in affordable housing. I welcome the Government’s commitment to move forward on that agenda.

The industrial strategy is clear that the UK’s prosperity depends on long-term strategic investment in the places and sectors that deliver. Uxbridge, South Ruislip and Hillingdon are among those places that are delivering in food, logistics, care, science, innovation and skills. If we want Britain to grow, we must back London—and Hillingdon—not just its banks, but its factories, freight depots, research hubs and colleges.

--- Later in debate ---

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

It is a pleasure to speak for the official Opposition in this debate, and congratulate the hon. Member for Kensington and Bayswater (Joe Powell) for having secured it.

Although there will always be a degree of party political difference—I am sure the hon. Member for Sutton and Cheam (Luke Taylor) achieved some cross-party consensus when he said “heaven forbid” the idea of a Liberal Democrat Government—what came across clearly in every Member’s contribution, including from the hon. Member for Strangford (Jim Shannon), was the sense of valuing the success of our capital city, and understanding the contribution it makes not just to the people who live here and choose to make it their home, but to our country as a whole. That is my starting point.

In preparing for this debate we will all have been sent a lot of information from many organisations that represent different aspects of life in our capital, but is clear that the contribution of London’s economy to the rest of the country is vital. It is vital because it is the biggest income earner for our country, because it makes a huge net contribution to tax receipts, which support public services across the whole country, and because it is the one genuine world city that places the United Kingdom in an internationally competitive economic league. That is why it has such an incredibly diverse population. In my constituency alone, which is not by any means one of the most diverse in London, well over 100 first languages are spoken by local residents, yet they all have in common the essential fact of being Londoners.

As we consider the decisions that the Government will have to make, and the policies they are considering, I would like to highlight a number of points that arise partly from the views brought forward local authorities and business organisations, but also from the day-to-day concerns we hear from Londoners.

A number of Members highlighted the challenges around housing, which is an important place to start. We recognise the nature of our city: housing remains in huge demand and, as several Members highlighted, is significantly more expensive than it is in the rest of the UK. In Greater London, 300,000 new homes already have planning permission. However, we have to acknowledge that there has been a 66% reduction in new home starts in the last two years, and in the last 12 months a 92% reduction in new home starts through our housing associations, which are the main provider of social housing. There has also been a 27% rise in the last 12 months in the number of people sleeping rough on the streets of our capital city. There is, then, a rapidly accelerating challenge around housing and, overall, a collapse in London’s delivery of house building in recent years, compared with the ambitions that the Government have set out and many London boroughs have enshrined in their housing targets.

We need to ensure that the aspiration the Government set out in their Planning and Infrastructure Bill is reflected in the actions that take place in the market. The very significant loading of that additional housing funding towards the tail end not of this Parliament, but of the Parliament after means that many of those London boroughs are asking when they can expect to see the additional resources that will help them to deliver that aspiration. Decisions that have been made, for example, to further ringfence the ability of local authorities to spend homelessness funding that they already have further constrains their ability in particular to address issues around rough sleeping.

We also need to recognise that, although many have made reference to the challenges of the local government funding formula, the NHS funding formula also creates very significant variations in the levels of funding, particularly within the capital. Just as, on the whole, inner London boroughs under governing parties of all colours have enjoyed significantly better per capita levels of funding than those in outer London—reflected in widely differing levels of council tax—we know that certain parts of our London NHS are significantly better funded.

The Minister will have been in the Chamber and heard many of his colleagues talk about their hope that the new 10-year plan for the NHS will see the further development of walk-in services and urgent care centres to keep people out of A&E. The NHS, because of its funding pressures, is looking to close those services at Mount Vernon Hospital in my constituency, creating further pressure on an already hugely pressured A&E in the constituency of the hon. Member for Uxbridge and South Ruislip (Danny Beales), who will be aware of this already, as the hospital is under the same NHS trust.

We need to make sure that not only local government, but the national health service are thinking about how they can deploy their resources in the interest of Londoners across the capital. We also need to reflect on the diversity of London’s economy. As a number of Members have mentioned, when we talk about London we tend to think of glass towers in the City inhabited by billionaire international bankers. However, 44% of the London borough of Havering is farmland, as is 23% of the London borough of Hillingdon and 35% of the London borough of Bromley. As well as attracting international capital and the cutting-edge technology industries, London also remains significant through the contribution that agriculture makes to the life of people in our capital.

Those of us in outer London, where most of those farms are located, will have heard loudly and clearly from local farmers—whose land is often not just farmland, but often a crucial part of the green belt, which maintains and supports the environment of our city—how concerned they are about the impact of measures such as the family farm tax. The family farm tax has a disproportionately large impact on London, because that farmland is of significantly higher value than equivalent sites in other parts of the country, due to its location in Greater London.

[Danny Beales]

I thank my constituency neighbour for giving way. Does he agree that, although the farmland and the farmers of London are deeply important, that is one crucial measure—alongside a number of others that the Opposition have not supported—that will raise billions of pounds to invest in our NHS? Hillingdon hospital now has £1.4 billion, after only getting £70 million from the last Government, to be actually built after 14 years. Is it not the case that every constituent in Hillingdon will benefit from that and every constituent in London will benefit from billions of pounds more in our NHS and in education?

[David Simmonds]

I am glad to hear my neighbour express his strong, vocal support for the family farms tax. I am sure his constituents at Goulds Green farm, Maygoods farm and other such places will be listening attentively to the position he takes as they reflect on the impact that will have on their businesses and the contribution they make to the local authority.

Given the wealth it generates and the contribution that it makes, London needs to have those world-class services funded correctly. The hon. Member will know, as he was a by-election candidate before becoming a Member of Parliament, that Governments of all parties, broadly speaking, have made commitments. We need to make sure those are delivered and that some of the changes made, particularly on London’s fringes, do not have a detrimental impact. I suggest to the Minister that it is worth having a consultation going across Government on what the impact of some of those decisions around the London fringes will have on the provision of NHS services in the capital.

The fact that London is not immune to those worldwide trends means that issues around crime and personal safety remain very significant, and particularly salient in their impact on our tourist industry. All of us work in this city and will be very aware that, in the good weather as the summer holidays get going, our public transport is full of people from all over the world coming to stay in London hotels, spend money in London restaurants, go shopping, and take their children to see London museums. Making sure that we live in a capital city that is safe, and where the traditional reputation of the United Kingdom as a safe reputation is maintained, is incredibly important. I pay tribute to the work that one of my local councillors, Susan Hall, the Conservative leader at the GLA, has been doing to make sure that those issues remain active and at the forefront of mayoral thinking.

We know that Mayor Khan was the only police and crime commissioner in the whole country to give back to the previous Government the money that he was given for extra police officers in the capital, because he chose not to spend it on that. That has left a deficit in our police numbers across the city. We need to ensure that our police have not just the resources but the connections with other local public services that enable them to do an effective job of cracking down on crime. That is a process of long-term change. In the past, many retailers asked for and were granted additional powers, via the Security Industry Authority, to enable their in-house staff to, for example, carry out arrests of people who are shoplifting. The cost of insuring those staff has run well above what any of those businesses contemplated. We must recognise that we are therefore facing a new policing paradigm, around shoplifting in particular.

In conclusion, although this is not just about the Minister’s Department, we need to hear from him that the Government are sighted on the value that London adds to this country. There has sometimes been a sense, particularly in the debate about the local government funding formula, that any formula that does not extract significant resources from London and redeploy them elsewhere will not find favour with this Government. I appreciate that the Minister is under pressure from colleagues across the country who want the deployment of additional resources, but a 27% rise in rough sleeping in the capital and the collapse in the delivery of social housing under this mayor is putting acute pressure on London’s local authorities. The levels of deprivation in some parts of this city are especially acute, given that London’s median income is around £10,000 a year higher than that of the rest of the United Kingdom, which means the dynamic around housing costs is particularly powerful.

We need to ensure that this city can continue, from its thriving economy, to contribute 22%—although the figures are debated, and it depends which lobby group you ask, it is between a fifth and a quarter—of our country’s GDP, or around £12 billion net, after public expenditure, to the wider Exchequer of the United Kingdom. That is £64,000 a year GDP per capita against a UK average of £37,000 a year. That economic competitiveness is living proof of the effectiveness of trickle-down economics. We know that, from the international billionaire who decides to build a new business headquarters in the city, to the trades, the workers who deliver it and maintain it, everybody benefits from the success of London. This is, and must remain, a city where people from all over the world and all over our country want to come to live and work, to study, to make a home or to raise a family. As this debate has showed, we all recognise the stake that we have; for all of us, as Members of Parliament, London is not just a place where some of us choose to live, but the place where all of us spend our working lives.