UK Economy (London)

Part of the debate – in Westminster Hall at 2:34 pm on 10th March 2004.

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Photo of Pete Wishart Pete Wishart Opposition Whip (Commons), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Environment, Food and Rural Affairs), Shadow Spokesperson (Transport) 2:34 pm, 10th March 2004

I congratulate Harry Cohen on securing the debate. As there is a London mayoral election in the offing, it does not surprise me at all that the London lobby is asking for yet more of the nation's resources for the city.

I concede readily that London makes a net contribution to the rest of the UK economy. It is the centre of one of the most centralised states in Europe and it has the vast majority of the nation's resources. It would be foolish to deny that, but I hope that the hon. Gentleman concedes that the interdependency between London and the other regions and nations of the United Kingdom is more complicated than he outlined in his simplistic opening argument.

I have often been depressed by the terms in which the situation is depicted. I remember sporadic jock-bashing episodes in the London Evening Standardthat we are all subsidy junkies, whingers and moaners. I hope that the debate has moved on from those days, but if London wants to go another couple of rounds, it must accept a few unalterable facts.

London is the most prosperous city in Europe. Its gross domestic product of £170 billion is larger than that of some of our European friends and allies, including, for example, Austria, Belgium, Finland and Sweden. London has more millionaires per square mile than any other European city and contains the City of London, perhaps the most dynamic and prosperous financial sector outwith New York. London's economy is one of the most successful on earth, and it still seems to be a desirable place to live, as evidenced by the rising house prices and increase in population.

I concede that London has its problems. There is poverty in some of its boroughs and its transport system has struggled to cope with increased traffic. However, if anything, London is a victim of its own success. As its prosperity has continued to grow—a gulf has developed between it and the rest of the UK, and it is growing each year—it has become a magnet, with people wanting to come here. We should try to dissipate and redistribute what London has to the other regions and nations of the United Kingdom. That would make other places more attractive and some of London's problems could be alleviated.

Although we have devolution, the UK is still one of the most centralised nations in the world. People tend to forget that all the big Departments of State are based in London. Other than the Scottish and Welsh Executives, every Government Department is based in London, generating billions of pounds for its economy. It is extraordinary how little Londoners realise that. They probably see No. 10 and the big, grey buildings in Whitehall, but I am sure that they have no idea how much they contribute to the London economy. The same is true of the art galleries, museums and other tourist attractions that generate 30 million visitors a year. That is the hidden subsidy that London receives from the UK taxpayer, and that is not even to mention the headquarters of national organisations, quangos and the BBC.

London also does very well in identifiable spending, with London and the south-east securing 80 per cent. of all transport expenditure. The extension of the Jubilee line cost £3.5 billion alone, and heaven knows how much the proposed Crossrail will cost. As was noted in an intervention, Londoners do very well in spending per head, although I will not go over the figures again.