Set London free

The capital is a giant chained by Westminster – a pro-growth government should release it

Today on Arguably, I write on why London needs a far more radical devolution deal. To read it now, become a paid subscriber or sign up for a seven-day free trial.

(Sven Hansche/Shutterstock)

If London were a country its GDP would be larger than Sweden’s. Its mayor has the largest personal mandate of any politician in the UK and the third-largest in Europe. The city is, as the Conservative MP Neil O’Brien once observed, “New York, LA and Washington all rolled into one”– the capital of finance, culture and politics. But this powerhouse is also a strangely puny one, a Leviathan in chains.

No other leading G7 city has such minimal fiscal powers. The Greater London Authority (GLA) retains just $955 in tax revenue per resident, compared with $9,473 in New York, $5,478 in Tokyo, $4,632 in Munich, $4,600 in Paris, $1,554 in Milan and $1,061 in Toronto. London may have been showered with infrastructure spending over the last decade – an IPPR study found a £140bn disparity between it and the North – but it has never been the master of its own fate.

That much was made clear in the summer of 2025 when Rachel Reeves’ Spending Review unashamedly marginalised the capital. Infrastructure proposals such as the Bakerloo line extension to Lewisham and the West London Orbital between Hendon and Hounslow went unfunded with no alternative solutions offered. When an indignant Khan protested, he was simply ordered by Reeves to leave her office.