March 02, 2007

Secession

Martin Wolf in the Financial Times (subscription required) picks up the recent numbers about the economic dependence of the other regions of the UK on London and East and South-east England.

Per head, Londoners made a net fiscal contribution of £1,741 per head, the South-east £1,326, and the East £1,057. All the other regions ran deficits. Some of the highest are £2,120 per head to the Scots, £2,869 to the Welsh, and a stonking £3,723 to the Northern Irish.

Is this dependence desirable, asks Wolf. No. But the government has no effective policies to reduce the gap.

And, he asks, is the government remembering to feed its golden geese? If London became an uneconomic place to do business, it would not be Leeds that benefited, but Frankfurt and New York.
It is understandable for Labour politicians to concentrate their attention on what is happening to the poorer regions. But they must also recognise how much the country depends on the prosperity of its most valuable asset: the great metropolis.
"Maybe", he asks tongue in cheek, "a secessionist party for London is a timely idea?"

Sadly there is no sign that the tide of subsidy is likely to reduce. Roll on Scottish independence.

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