A few jokes. A sprinkling of tax cuts. A few more jokes. A couple of flashy new buildings. And then back to the jokes. As Boris Johnson launches his pitch for the premiership – and takes a commanding lead among Tory MPs – it would be easy to dismiss his economic programme, along with the rest of his plans, as flimsy self-promotion, with about as much substance as one of his columns. After all, he is leaning heavily on his record as London mayor to prove his credentials and most of his critics will dismiss that as irrelevant. But hold on. In fact, Johnson’s record as mayor was exceptionally good. And his time in City Hall offers an outline of what Boris-onomics might look like.
Against the backdrop of our tortured debate over Europe, it is easy to forget both what an incredible global success London’s economy has become and, just as significantly, how much of that was set in place during Johnson’s time as mayor.
Growth in London from 2010 to 2016, covering most of Johnson’s term, was a cumulative 22 per cent, according to a recent Parliamentary report. That compares to 15 per cent for the West Midlands – the next highest area – and 12 per cent for the UK as a whole.
In other words, the capital grew nearly twice as fast as the rest of the country. London is now by far the wealthiest region in Europe and parts of it have a GDP per capita more than five times the EU average. According to a study by the Brookings Institute, it is now the third fastest-growing city in the developed world, slightly behind the Macau and Dubai. Measured on a purchasing power parity basis, it is the fifth richest city in the world, trailing only Tokyo, New York, Los Angeles and Seoul, and expanding faster than all of them.
Can Johnson take any credit for that? Sure, London started out as a wealthy place. But right after he became mayor in 2008 the world witnessed the worst financial crash in half a century, which is not necessarily a great starting point for a city that has always relied heavily on finance. It wasn’t obvious it would grow that fast. In fact, under Johnson, London’s economy diversified into technology (it now has more fintech unicorns, as start-ups worth more than a billion dollars are known, than San Francisco) and ripped up outdated planning laws to allow a boom in skyscrapers that created lots of new space for businesses to grow.
Within the admittedly limited powers of the London mayor, there were three distinct strands to Johnson’s economic programme.
First, lots of deregulation, as can be seen in the relaxed attitude to development.
Next, lots of emphasis on high-spending, high-visibility infrastructure, which, while it was enabled by the Westminster government, was also pushed for by the mayor’s office.
Finally there was lots of boosterism and promotion. It was often self-aggrandising, and sometimes had a slightly naff Dubai-on-Thames feel to it. But it also worked, and helped make London a magnet for global corporations.
True, Boris-onomics needs a lot more work to be applied to the UK as a whole. That said, there is the kernel of a successful platform in there: deregulate and cut taxes, spend lots of money on flashy rail systems and airports, and sell yourself like crazy to the rest of the world.
In Germany, France or the United States, running a big city really well, and helping secure its place as one of the great economics successes of the decade, would be a great springboard for national leadership. In truth, the UK as a whole could spend a lot more time discussing how to replicate London’s success rather than knocking it – and after we leave the EU, Boris-onomics might just be the place to start that.