Lord O’Neill, former chief economist at Goldman Sachs and ex-adviser to Prime Minister Andy Burnham, has called for a renewed focus on London to drive economic growth across the United Kingdom. According to O’Neill, prioritising the capital is essential if the government is serious about boosting national prosperity.

Since the financial crisis, London has outpaced all other UK regions in economic expansion, though its growth has slowed significantly compared to previous decades. Between 1998 and 2007, London’s gross domestic product (GDP) rose by 42 percent, but from 2007 onward, the increase has been only 28 percent. On a per capita basis, the city’s GDP has grown by just 8.6 percent since 2007.

O’Neill criticised the current approach to regional economic policy, warning against attempts to distribute funding evenly across all areas. “A lot of places don’t have the capacity to actually deliver on how they might use that money in a way that you can have confidence that it is going to benefit the taxpayer,” he said, describing such an approach as “slight lunacy.”

The former adviser’s comments come amid ongoing concern that Burnham’s reluctance to support key London projects, such as the proposed third runway at Heathrow Airport, could disadvantage the capital and, by extension, the national economy. O’Neill has previously cautioned that ignoring London’s importance could be a “really bad mistake” for growth prospects.

As the Prime Minister prepares for a Budget announcement expected tomorrow, O’Neill anticipates that there will be some form of commitment to address London’s economic role. Speaking recently to members of the Treasury committee, O’Neill emphasised the need to “prioritise the places that are going to matter” if the government aims to achieve broader growth.

Burnham, formerly the Mayor of Greater Manchester and a leadership contender for the Labour Party, has made achieving growth across all “postcodes” a central theme of his platform, seeking to uplift regions beyond London. However, O’Neill’s analysis suggests that concentrating resources on economically stronger areas, notably the capital, could be a more effective strategy for national growth.

While O’Neill turned down any official position in Burnham’s administration, his ongoing critique underscores the tension between regional equity and economic pragmatism in shaping the government's growth policies.