Tax grab on London and the South-East tops £100billion
20 out of 25 constituencies with the highest bills are in the capital
THE income tax grab on London and the South-East has topped more than £100 billion a year for the first time, official figures revealed today.
They show Londoners paid £59.3 billion to the Treasury annually and residents in the South-East £41.4 billion, just over half the total for the whole of England of £198 billion.
The bill is being driven up by the Chancellor’s stealth tax freeze on the thresholds for paying different rates of income tax. About a million people in London and the South-East will have been brought into paying the higher rate of income tax due to the threshold freezes by 2027-28, according to figures from the House of Commons Library.
Twenty out of the 25 parliamentary constituencies with the highest income tax bills were in London. Kensington handed over £3.37 billion, slightly less than the whole of Northern Ireland at £3.44 billion.
Second highest was the Cities of London and Westminster at £3.15 billion, followed by Hampstead and Kilburn at £3.06 billion, Chelsea and Fulham £2.87 billion, Richmond Park £1.95 billion, Westminster North £1.87 billion and Battersea £1.68 billion.
In London’s commuter belt, Esher and Walton-on-Thames were the seventh highest among the top 25 with a bill of £1.72 billion, Beaconsfield was on £1.06 billion, Hitchin and Harpenden £1.02 billion, and Chancellor Jeremy Hunt’s constituency of South-West Surrey, just under £1 billion.
The latest figures, published recently by HM Revenue and Customs were for 2021-22, the first year of the Chancellor’s freezes on income tax and National Insurance thresholds, and so these totals will almost certainly have risen since then. They also show how Londoners on average are paying more income tax than people in all other regions of the country. The median amount paid — the number in the middle if all taxpayers in London were put in a line — is £3,650 a year. Using this calculation method means that the super-wealthy do not dramatically push up the average figure for the capital.
But London taxpayers still pay on average at least £600 more than the next highest-paying region, the SouthEast at £3,010. The figure for the East of England was £2,790, the South-West £2,470, the East Midlands £2,370, the North-West £2,360, West Midlands £2,340, Yorkshire and the Humber £2,300, the North-East £2,230, Scotland £2,560 and Wales £2,280.
Liberal Democrat leader Sir Ed Davey said: “The hard-working middle have already faced the biggest fall in living standards on record, yet Jeremy Hunt is compounding their misery with his freeze on income tax thresholds.
“Every month, families are looking at their pay packet and feeling shortchanged. This Government is taking voters across London and the SouthEast for granted.” The income tax hit on London has been growing, at £51.6 billion in 2020-21, and £36 billion in the wider South-East, a total of £87.6 billion.
So the revenue from these two regions for the Treasury rose by £13.1 billion to £100.7 billion in 2021-22, a hike of nearly 15 per cent. This was a far bigger jump than the £4.5 billion increase for the two regions from £83.1 billion in 201920 (London £48.3 billion/South-East £34.8 billion) to £87.6 billion in 2020-21.
A Treasury spokeswoman said: “After providing hundreds of billions of pounds to protect lives and livelihoods throughout the pandemic and Putin’s energy shock, we had to take some difficult decisions to help pay it back. Our tax system is progressive, which means that over half of all income tax is paid by the top five per cent of earners. Now the economy is turning a corner, we have cut National Insurance by a third.”
Mr Hunt lopped 2p off NI in the Budget in March, having done the same in the Autumn Statement. Once this is added to the stealth tax threshold freezes, London households’ disposable income will on average go up by £110 in 2024-25, the biggest of any region.
KEFFIYEHS, patterned scarves emotively synonymous with Palestinian nationalism and resistance, are all over Europe again. London every weekend is filled with them, as thousands join marches, creating a sea of these garments. They are not just worn as protest-gear either, but instead are consistent elements of people’s everyday wardrobes.
At the billionaire-epicentre that was the pre-opening of the Venice Biennale Arte last week, the Israel-Gaza war was an unavoidable point of contention. Flyers for organised protests spread on Instagram, while attendees despaired at the fact La Biennale does not recognise Palestine as a nation state, and therefore could not take part in the international art exhibition.
Anti-war bunting was wrapped on the city’s wrought iron fences (and just as quickly torn down); Palestine flag badges were pinned to lapels and tote bags. But the most popular form of protest was a keffiyeh incorporated into an outfit. It was a striking declaration of thought. These are powerful symbols to wear in the West and conjure a particularly intense sense of solidarity. (Though when rock’n’roll model types were sauntering about cocktail bars wearing them with leather jackets and skinny jeans, it verged on Radical Chic). Fashion brands must not attempt to cash in again. The scarves, sometimes referred to as Palestine’s unofficial flag, first became a symbol of resistance in the Thirties, before being viewed by some in the West as a symbol of terrorism.
By the Sixties, they were deemed more broadly anti-war, worn by Fidel Castro and Nelson Mandela. And by the Eighties, Madonna was wearing them. Where she goes, fashion follows: in 2001, Raf Simons (who now designs for Prada) sent them down the runway, leading the Guardian to hark the arrival of “terrorist chic”.
In 2007, Balenciaga did a luxe version, before everyone with a leopard print coat and Indie Sleaze inclination bought one in Brick Lane. Urban Outfitters made a fast fashion iteration, which was later pulled, and even 2021 saw the late Virgil Abloh design one for Louis Vuitton. Wear a keffiyeh and make a statement, of course — but make sure that statement is not that you can afford a £800 one.