‘Levelling up’ other parts of the UK ‘a threat to London,’ UK Government warned
The UK Government has been warned that ‘levelling up’ other parts of the UK is a “threat to London” as the flow of government money England’s capital city has usually enjoyed could dry up.
The chief executive of Centre for London and a former director of mayoral policy at City Hall, Nick Bowes, said that the UK Government Treasury’s opposition to any further financial devolution to Wales and other parts of the UK meant it was “the best friend London needs right now”.
“Government investment that currently flows to the city could be redirected elsewhere, leaving public services, transport, housing, health and education under-resourced,” he said in the Times.
“This is a dangerous gamble with the competitiveness of the city’s economy, particularly at a time when there is so much uncertainty around how well London will bounce back from the big toll the pandemic has taken on the capital.
“Treasury officials — along with those in the Bank of England — can see the country’s balance sheet. Run your finger down the income column and it is London which makes up a substantial chunk of the tax revenue flowing into the Treasury coffers. Recent years have seen London paying almost £40 billion more in tax than the city got back in public spend.
“This money is crucial in normal times, but particularly so now and in future years with the huge bills racked up for dealing with Covid-19. It would be a reckless gamble to pull the rug from underneath the city and endanger London as an economic powerhouse. Without this, the country’s ability to pay its way in the world is seriously hampered.”
Nick Bowes did however concede that being so over-reliant on London’s wealth “is a bad thing for the country”.
“Rebalancing is clearly needed with differences between towns, cities and regions substantially narrowed. Instinctively some kind of levelling-up agenda feels right. But the fact is we are where we are now,” he said.
“The country needs London to do well, and for all our sakes, either by accident or intent, the agenda must not morph into a levelling-down of London.
“To do so could sabotage one of our nation’s true gold-standard global brands. London is an enormous source of both soft and economic power on the world stage. It generates substantial wealth and is the gateway into the UK for the 90 per cent of foreign tourists that then go on to Edinburgh, Stratford-upon-Avon, Bath and so on, spending billions along the way.
“As a huge magnet for global talent and investment, London’s competitors are not Birmingham, Leeds or Sunderland — but New York, Paris, Berlin and Shanghai.