London Mayor Frustrated With Attempts to 'Make City Poorer'

(Bloomberg) -- Technology startups in London attracted a record 2.56 billion pounds ($3.26 billion) of venture capital investment in 2019 through May 31, according to data published by London & Partners, the city’s official lobbying arm.

But London Mayor Sadiq Khan said the capital’s prowess was contingent on other cities around the country being successful, and shouldn’t be seen as a threat.

"My frustration is the government thinking the way to make our country more equal is to make London poorer," Khan said in an interview Monday. "The way to make our country more equal is to devolve more powers from Whitehall, and give other cities powers they need to skill up their workforce."

The figures also illustrate the dominance of the capital’s appeal: despite cities like Cambridge, Bristol and Edinburgh all being home to top scientific universities and notable tech firms, London captured four fifths of Britain’s total 3.17 billion pounds of technology VC funding for the year so far.

The investment statistics were compiled by the data firm Pitchbook, and were published Monday by London & Partners on the same morning Prime Minister Theresa May is expected to announce 153 million pounds of new funding for U.K. tech companies, with a particular focus on supporting businesses working in the field of quantum computing.

“If we are going to maintain our position as a global leader, our challenge is how we develop British tech and make it even better,” May is expected to say at an event in London on Monday.

Khan suggested a more diverse industry and greater efforts by businesses to train returning mothers, and individuals with long-term unemployment, with news skills. “All the evidence says when you see the research is that your business would be more successful, and productivity will go up, if you are more diverse," he said.

The optimism of May and Khan, supported by the record figures published to coincide with the start of London Tech Week, runs counter to concerns that uncertainty around Britain’s exit from the European Union will damage the U.K.’s competitiveness as a technology hub.

But it does little to address mounting concerns around the economic impact of the north-south divide in Britain. In December, an analysis by the think tank IPPR North showed that in the past decade, total public spending rose in the south of England by 3.2 billion pounds in real terms, but fell in the north by 6.3 billion pounds in the same period.

The U.K. has seen its technology scene expand rapidly in recent years, with further growth expected. Facebook Inc., Snap Inc. and Alphabet Inc.’s Google have all announced plans to increase hiring in the U.K., while Apple Inc. is leasing about 500,000 square-feet of office space at Battersea Power Station on the south bank of London’s River Thames.

To contact the reporter on this story: Nate Lanxon in London at nlanxon@bloomberg.net

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Steve Geimann

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