Keele Research Repository

Britain’s industrial strategy, preoccupied with labour productivity, projects London as a role model because of a high gross value added (GVA) to employment ratio, an approach since followed in the national ‘levelling-up’ agenda. We demonstrate that this is misplaced: it misses the subtleties of how positive agglomeration effects act and ignores how negative effects can, for distributional reasons, cause real as well as GVA-measured productivity to rise in a misleading way. We consider the implications for both London and infrastructure projects designed to reduce productivity differentials by improving connectivity with other cities, such as the ambitious but flawed High Speed 2 (HS2).