How taxpayers in London help subsidise most of UK
They pay £3k more to state on average than they get in services
‘Aids the debate on devolution’
TAXPAYERS in London and the South East are subsidising poorer parts of the country by thousands of pounds a head, an official analysis reveals.
A regional breakdown shows those in the capital paid about £3,000 more to the state on average last year than they claimed in services.
In the South East the average worker paid £1,666 a head more.
And over the past year, the East of England has also crossed the spending line so it is subsidising other parts of the country. In the financial year ending March 2016, the average individual in that region paid £244 more in Ireland, on £5,438 per person. The taxation than was returned in region also profited from the highest services like health, education level of state spending for each indiand transport.
The average person in every vidual – £14,020 – while Scotland was other region took more from the a close second at £13,050 a head. state than they put back in, The figures have been published according to data for regional by the ONS for the first time folpublic finances released by the lowing years of independent studOffice for National Statistics. ies that have suggested some parts
Those in the North East got an of Britain have become so dependaverage of £3,824 more in services ent on state spending that their than they contributed last year, economies resemble those of comwhile the figure was £3,043 in the munist countries. North West, £4,547 in Wales and Traditional figures show only £2,835 in Scotland. national spending, while the new
The area most dependent on statistics are based on surveys taxes paid elsewhere is Northern and population estimates as well as Treasury data. The ONS report said the analysis has potential uses including ‘aiding the devolution debate’.
A study that emphasises high levels of state spending in Scotland and its deep reliance on southern taxpayers is likely to feature prominently if First Minister Nicola Sturgeon succeeds in her aim of staging a second independence referendum.
According to the report, each Scot received £350 more in spending than a Londoner in the last financial year.
They also had £2,472 more than those in the South East, which has the lowest level of state spending of £10,580 per head.
When it came to paying in to the public purse, Scots paid an average £10,320 each in taxes and fees, compared to the £15,756 paid by every Londoner and £12,249 by those in the South East.
The figures are likely to underestimate the real level of public spending north of the border, because they do not include money spent by the Scottish Government. The ONS said London, the South East and the East of England all had ‘ net fiscal surpluses’ – where taxpayers paid more than they took – while every other region ran a net fiscal deficit. London was by far the greatest contributor to the Treasury, councils and other authorities that collect tax revenues.
In the report, state spending included public sector pay, services, capital investment in areas like transport and buildings, benefits and subsidies. Contributions to the state were mainly taxes, but also included the earnings of public sector organisations and fees paid by the public.
The Centre for Economic and Business Research, which once said Wales and the North East had economies that were more state- dependent than that of Cuba, said the fiscal gap ‘is partly driven by the differences in earnings and corporate profits seen between the regions’.
‘Looking at the Government’s outlays shows that Northern Ireland and Scotland received the highest spending per person, while the South East and the East of England attracted the least,’ the think-tank said.