New figures show London's net fiscal surplus is by far the largest in the UK

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The Square Mile - London's Financial District
The City of London is one of the biggest contributors to the economy (Source: Getty)

London was one of only three regions of the UK to run a fiscal surplus last year, with the capital subsidising most of the rest of the UK to the tune of more than £3,000 per person, according to statistics released for the first time by the government.

The capital contributed £26.6bn more in revenue than the government spent on the region in the financial year ending in March 2016, the Office for National Statistics (ONS) said.

The figures underline the extent to which the UK economy relies on the capital for tax revenue at a time when devolution of powers to regions has risen up the political agenda.

London’s economy contributed £15,750 to government coffers per person in the financial year, by far the highest in the UK.

The fiscal surplus per person was £3,070, with the rest of that money redistributed to other regions of the UK as the capital in effect subsidised most of the rest of Britain.

Sean McKee, policy director of the London Chamber of Commerce and Industry, said: “This is a timely reminder to ministers, as the date of official talks approaches, of the importance of London to the wider UK.

“As London prospers so does the rest of the country which is why it is so important to limit uncertainty and maximise opportunity as we approach Brexit.”

The South East and East of England were the only other regions to record a fiscal surplus, with the UK as a whole recording a deficit of £48.7bn in the same time.

The biggest regional deficits per head were recorded in Northern Ireland, at more than £5,400, and Wales, at more than £4,500.

Meanwhile Scotland ran a deficit of £15bn in the financial year ending in March 2016. Scotland and Northern Ireland were also the regions with the highest government spending per head, at £13,050 and £14,020 respectively.

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