Knees up, knees up…

Maybe its because I’m a scrounger, that I love London town…

“The Capital” is back in business, big time. Business is booming, mortgages are pouring out and debts are building, bubbles are forming and people are spending. Tax receipts are zinging into the Exchequer and without them, Britain would be in an even worse state than we are. So thank you, London. I think that is the expected response from those already accustomed to falling on their knees and imploring our benefactors for the hand-out. The gap between Them and Us is getting wider so we’d better practice doffing our cap as well as we kneel and proffer the begging bowl – not easy but we’ll manage.

It’s one thing to observe the surge and splurge in a place so feather-bedded that you’ll hear her professionals say they missed out on the bankers’ austerity-driven recession. “Never noticed it, mate.” But what I find galling is the coke-line of subsidy on which so much of this wealth is predicated. (What follows is a classic example of nationalist grudge and grievance).

There is famously £14.8billion for Crossrail with £4.7b directly from central government. While the Greater London Authority provides over £7b, the authority itself is 75 per cent funded by British taxpayers. Another investment arm, Transport for London, is also taxpayer-supported. There is business investment too but unscrabbling the Crossrail mosaic of partners reveals a hefty transfer of general taxation from all Britons to bankroll 21 kilometers of rail track for those travelling on an east-west axis in one British city. Crossrail is costing four times the annual budget of Birmingham. It is just under half of the entire government budget for the whole of Scotland…for a railway line.

This being London, the pathological obsession with property tracks the construction of each kilometre of rail. We read of houses near the line spiralling in value by 27, or 35 or even 57 per cent. London is a hub of economic activity, but it is also a hothouse of inflation because as costs increase, so demands for higher incomes produce another distortion – London Weighting.

Nothing characterises the disfigurement of Britain’s economy so crudely as a straight subsidy into the pockets of earners in one geographical area. Adding tax pounds raised by low earners in Glasgow or Huddersfield to the pay packets of higher earning professionals, many of them economic migrants to London, adds insult to injury to the North-South divide. To create an entrepot in one corner of the country and stand by as it draws in talent and resources from places in dire need of more not less energy is now a sad fact of non-metropolitan Britain. But to ask the rest of us to subsidise directly its excesses with a bank account bung is asking too much. The subsidy underwrites inflation, ensures that everything will be dearer and adds another notch on the ratchet easing Britain apart.

The public aspect of the subsidy to Londoners has been revealed as £110m a year, with a whopping £45m spent in the Department of Work and Pensions alone, this the department trying to save money for the nation from benefits claimants.

One of the highest recipients of the additional payments is the £6600 to each member of the Metropolitan Police, £4200 in the prison service and £2700 in the Ministry of Defence.  In the private sector it is less generous, ranging up to just under £5000. London derives huge benefit from the efforts of its people but it is a mistake to think it isn’t based on the collective foundation of general taxation provided by all.

Remember it is the Scots, in Daily Mail World, who are the scroungers, benefiting from taxes raised in England and sent north because we can’t provide for ourselves.

London has done imperiously well and every single taxpayer down there deserves to reap the benefits of their work. But they should pay for themselves as well as take top dollar in salary.

To be fair, the Mayor is on the case and is seeking improved tax powers so he can raise and keep more of London’s revenue. Good for Boris. I hope he succeeds and to help him Mr Salmond should be pointing out how this is exactly how Britain should operate with a series of powerful regions and city states setting their own standards and taxing accordingly, just as Scotland should if there should be a No vote. Salmond should seek common ground with the Mayor for a re-writing of the tax and spend rules of the UK and instead of allowing the screw-tighteners at the Treasury to dictate our fiscal policy, set the new units free to compete for investment and jobs through their own different tax structures. As part of the alliance Salmond should demand the phasing out of London Weighting to bring prices down and force realistic pay rates. If pay needs to rise let London’s own taxes fund it, not ours. Is Boris the free marketeer he likes to pretend or is he the scraggy-haired scrounger reliant on shovelfuls of Olympic gold and Crossrail subsidy? We could find out.

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22 thoughts on “Knees up, knees up…

  1. UK booms again? but, strangely the debt keeps rising!

  2. Hi Derek you forgot about the 32kms of tunnels being bored under London by the National Grid over 7 years to ensure the City lights stay on. This of course is the same time there are delays about sub sea cables to the Western Isles etc

  3. Good job you’re able to dig all this info out for us. So useful while conversing with others re independence. Thanks, Derek.

  4. There is also a Crossrail 2 being mooted—another £12 billion or so.
    Astonished to see what the London weighting is for these people, but the total cost will decrease when many of the the departments/organisations/staff are rightfully relocated to Scotland after the vote.

  5. Murray McCallum

    I can’t see how the investment in Crossrail would fit in with Heathrow Airport ceasing to be a hub. How would it fit in with an expanded Gatwick, or a new airport East of London?

    All the eggs are in the Heathrow basket. Historic investment justifies future investment. An unstoppable train.

  6. They really look after themselves down there and the subsidy set up is amazing – I didn’t realise it was all so reliant on taxpayer money.

    “half the Scottish Government budget … for a railway line” – staggering!
    I’ll store that one away for future reference.

  7. Scottish independence will have a dramatic effect on the London establishment.They are going to have to get real about their economic situation and their place in world affairs.
    No more subsidies Boris,you are going to have to start funding infrastructure projects from within your own resources.

    • Just read your reply to auntie re BBC bias! Great stuff Derek – keep sticking it to these self serving liars. Happy to accept our licence fee tho. YES all the way.

  8. Please Gideon,can you spare some more porridge.

  9. IF we are really all in this together then why doesn’t the Crossrail development START in Birmingham?

  10. Following independence its the clawback negotiations I’m looking forward to.Like divorce settlements – “You Sir, gambled-allegedly, and spent heavily following a football team across Europe.I estimate the expenditure so incurred at £X thousands. You Madam have assets of 80 pairs of shoes, three fur coats, an expensive convertible car,and you lunch expensively with friends twice weekly. I estimate the expenditure at £Y thousands. Taking into account the earnings contributed to the household by each of you Madam on balance (I’m with the boys} your former partner owes you nothing.And he gets the car!”.

  11. Ah what was that Boris said: “a pound spent in Croydon is of more value to the country than a pound spent in Strathclyde.” Yes, he means that too. Boris wants his island airport, starting costs at £40bn, and to turn Heathrow into a new commuter city for London (price £50bn), just like Croydon (it used to have an airport at one time and was replaced by … yes you got it, Heathrow). Regardless of what projects get the green light in and around London, it is tens of £billions of investment that the rest of the UK will never see.

    In today’s London Evening Standard they’ve printed some facts. London created 4 out of 5 of all private sector jobs in the UK over the past three years. One in three young people who leave home throughout the UK head to London. Overseas house-buyers now form a third of the market in inner London pushing everyone else further out as property prices soar, £500,000 is now the average price of a three-bedder. Kensington and Chelsea is now showing a population decline as many foreign-owned properties are lying empty, with a knock-on effect to local businesses the borough is slowly becoming ‘a ghost town’. A term now called ‘hollowing out’. Seventy-three per cent of new flats go to foreign buyers and remain empty and unfurnished. The Shard, that new beacon of a resurgent London is gloriously lit up at night like the Eiffel Tower, the problem is it has as much people in it as the Paris icon. Local property taxes have been capped by such an extent by successive Tory and Labour governments over the past 25 years that a Westminster property only generates £2000 per year in tax while the equivalent in Manhattan brings in between $20,000-$40,000 per annum.

    I came to London in 2008 to work and live (from Scotland), I first lived in Camden Town, a buzzing place especially at the weekends with its markets and pubs. Now, almost six years later, go to Camden Town at around 3pm on a Saturday afternoon and the place is empty, devoid of people and traffic. The markets solely rely on tourists and the pubs need to show football to attract the punters. Recently over 2500 council tenants were purged in a social cleansing act from the borough and the council properties sold off. The heart of Camden has disappeared. In 2008 I could buy a two-bedroom flat in Camden for £160,000, now you’d be very lucky to get a two-bed ex-council flat for less than £300,000. One thing’s for sure this government has abandoned the UK. London is systematically being turned into a City State like Singapore and a tax haven like Monaco but it will keep sucking in the cash from all corners of the UK as long as it is attached to it like a vampire squid. There is a separation going on that nobody talks about, that is the distancing of London from the UK. The £1.4trn debt is not going to be paid off, it is going to get bigger, only it is a debt that is going to be shouldered by the rest of the UK and not London.

    Scotland needs to get away from this nightmare Britain as soon as possible.

  12. Just a thought raised by your piece. There were 81743 civil servants working in London at the last count in 2011. All seem to get a London Allowance, either direct or built into their salary scale. If 8.4% (Scotland % UK) are working on Scottish matters which would be done in Scotland after independence that is 6866 London Allowances that won’t have to be paid. £22 million each year to add to the savings on MPs subsidised bars, House of Lords’ newspapers and the £5 billion refurbishment of the fabric of the Houses of Parliament.

    Scotland could end up being a wealthy wee country just on the savings from not having Westminster government.

  13. Derek I couldn’t agree more. any chance you could get together with the Gordon McIntye-Kemp and do a piece that shows how not just Scotland but the whole UK subsidises London and the South East?

  14. Defence helicoptor contracts for £760millions just awarded to S/W England.
    Oil workers are being killed in the Scottish Oil sector for lack of UK Health and Safety Law.

    London HQ draw in profits from the all UK consumers. Multinationals (foreign) evade tax through the City of London, against fair competition Laws and damaging British business, Scottish Oil sector taxed at 60% to 80%. Increased by 11% (£2Billion) a year by Alexander/Osbourne in the 2010 Budget. Scottish block grant cut by £1.3Billion, a year, in the 2010 Budget.

    London S/E is one big Pozzi scheme drawing revenues from throughout the UK (especially Scotland – Barnett) to finance the Tory Bankers, the Dope on a Rope, and millionaires tax evaders debt. Despite taking £4Billion from Scotland (for debt repayment it didn’t borrow or spend) and £3Billion (Royal Mail steal) = £7Billion (+ the rest) nothing has been paid off the Deficit. In fact it is likely to be increasing,

    Roll on Independence for Scotland, when London S/E will have to stand on it’s own.

  15. There would be no need for a £Billion runway at Heathrow. London served by three airports. Extra flights could easily be dispersed to Airports all over Britain, leading to easier journey’s for travellers. Westminster centralist economic policy means even more stress and congestion in London. BA slots at Heathrow are subsidised by the Westminster against fair competion policies, BA is a private company British/Spanish? This along with excessive APT makes flights from other UK airports more expensive.

    • In an acceptable 40-mile radius from central London make that six airports with Luton, Southend and City Docklands, also there is the mothballed Kent International airport waiting to be developed too.

  16. When I first went “down South” I thought it was London waiting, the idea was so foreign ! Discovered it reached Sevenoaks – that’s like Glasgow weighting stretching to Stirling, an excellent party to join, eh ?

    Obama’s State address yesterday seemed to confirm his inability to influence the low income society he presides over, and guess what, as an English speaking country so readily influenced by what happens across the Atlantic we will continue to degrade too unless the society postulated for after Independence actually happens.

  17. […] couple of examples of where London benefits from the taxes raised elsewhere… Knees up, knees up… | Derek Bateman Broadcaster1 For those that keep bringing up the propoganda that Scotland costs more per head of population […]

  18. Strange thing is,Genesis once had a hit LP called “Selling England by the pound,”
    I think I’ll do an Album called “Ripping Scotland by the billions.”

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