The Blitz added £4.5 billion to London’s annual economy, say experts –

The Blitz, in which the Luftwaffe dropped more than 18,000 bombs on London over eight months during the Second World War, was utterly devastating for the capital.

More than two million homes were destroyed, 60,000 civilians killed and 87,000 wounded between September 1940 and May 1941.

Yet a new study from the Centre for Economic Performance (CEP), at the London School of Economics (LSE), suggests that the capital is £4.5 billion a year better off because of the raids.

Dr Hans Koster and Dr Gerard Dericks have discovered that in areas where buildings were destroyed planning laws were relaxed which allowed the construction of larger and larger buildings, and in turn brought in higher rates.

The researchers calculated that if the Blitz bombings had not taken place, the number of city workers would be around 50 per lower, equating to a loss to the economy equivalent to 1.2 per cent of Greater London’s annual GDP.

The Blitz began on Saturday 7 September 1940 when the Germans attacked London with 350 bombers Credit: Imperial War Museum

In a CEP discussion paper, Dr Koster and Dr Dericks conclude: “It is with great discretion that one should attempt to cast the deliberate bombing of civilians in a positive light.

“However the results of this study do beg the distressing question: Did the Luftwaffe brave the channel crossing and hostile fire only to rain down future lucre on ‘lucky’ London landowners?

“Thanks to what might be viewed as the British planning systems modern war on development, the answer indeed seems to be yes.”

The pair used recently digitised National Archive records showing the locations of all bombs dropped during the Blitz and compared them to with local differences in London’s modern-day building heights, employment levels, and office rental prices.

Two Dornier 217 flying over the Silvertown area of London’s Docklands Credit: Central Press 

However it is unknown whether the boost to the modern economy has offset the enormous financial ramifications of the Blitz to Britain. At its peak it is estimated the raids cost the country around 950 million a night in today’s money.

“The Blitz was a tragic episode in London’s history, the likes of which one only hopes will never be repeated,” added Dr Koster.

“However, by locally relaxing the restrictive planning regime put in place after the war, for all its human cost, the Blitz has subsequently had an extremely positive effect on London’s present day economy.”