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A new research report 'London's contribution to the UK economy' has been ...
A new research report 'London's contribution to the UK economy' has been
published by the Corporation of London. Written in conjunction with
research consultancy Centre for Economics and Business Research, the corporation's report explodes five widely held myths about London.
Myth 1: 'Because earnings are higher in the capital, Londoners must be much
better-off than people living elsewhere in Britain'. Wrong. Although the
typical London employee earns 30 per cent more than the national average,
when the higher prices in the capital are taken into account, the average
Londoner has a standard of living no more than 10 per cent higher than the
rest of Britain. The main reason is housing costs * which are 56 per cent
more expensive in the capital. Moreover, key workers, like nurses and
teachers, often have substantially higher standards of living outside
London. For example, a London teacher could be up to 75 per cent better off
if he/she moved out of the capital.
Myth 2: 'With so many government offices, civil servants and 'national'
museums and the like, London is a massive drain on public sector finances'.
Wrong. London pays more than its fair share in taxes and receives much less
back * the city contributes up to£23bn more to government coffers
than is spent on it. In 1999/2000, London's residents and businesses paid
£60bn in taxes and commuters contributed a further£6bn. In
return, London received only£47bn of government expenditure,£4bn of which did not even benefit Londoners, but was used to pay for national programmes administered in the capital.
Myth 3: 'With so much prosperity, unemployment can't be an issue in London'.
Wrong. At 6.4 per cent, unemployment in London remains stubbornly higher
than the national average of 5.0 per cent. Although the number of jobs in
the capital has risen to over 4 million, commuters who live outside the
Greater London area take around 1 million of these.
Myth 4: 'London's economy is all about global finance and trade; it doesn't
benefit British business'. Wrong. Although London is a major centre for
global trade, it is also a vital customer for many businesses in the rest of
the UK. In 1998, the city purchased£89bn of goods and services from
businesses elsewhere in the UK * supporting 4.7 million British jobs outside
the capital.
Myth 5: 'London is just one of Britain's cities; it's not that important'.
Wrong. London's scale is unmatched in Britain; only Paris is in the same
league within Europe. With its population over 7 million and growing, one in
eight Britons live in London * making the city much larger than Scotland,
and equivalent in size to 16 major UK towns and cities combined: Birmingham,
Blackpool, Bradford, Bristol, Derby, Glasgow, Kirklees, Leeds, Leicester,
Liverpool, Manchester, Northampton, Oldham, Plymouth, Sheffield and
Wolverhampton. Moreover, London accounts for 21 per cent of the UK economic
activity * much higher than the 16 per cent reported by government
statisticians. If London were a country in its own right, its economy would
be bigger than 9 of the 15 members of the European Union.
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