UK subsidised by City: report

Julian Harris
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LONDON contributes far more to the Exchequer than it receives in public spending, a report will say today.

The capital is estimated to have made a £1.4bn net contribution to the public purse in 2009-10, according to new research published by the City of London Corporation.

The report said no other region makes a net positive contribution – the UK in the aggregate has a huge budget deficit as a result.

And 21 per cent of all the UK’s economic growth is driven by business activity in the city, researchers at Oxford Economics found.

London’s contribution is forecast to rise substantially by 2015-16 with the financial and business services sector a core driver of growth.

“This report demonstrates London’s ongoing importance for wealth generation at a time when the government is attempting to reduce the overall UK budget deficit and promote growth across the economy,” said Stuart Fraser of the City of London Corporation.

“However, concerns over higher taxation, increased regulation, infrastructure issues and immigration need to be addressed if we are to sustain London’s pre-eminence in global financial and business services,” he added.