At the height of the global economic downturn, London continued to make a substantial contribution to the UK Exchequer and will play a crucial role in driving the UK economic recovery forward, according to new research published by the City of London Corporation today (25 January 2011).
London’s Competitive Place in the UK and Global Economies, produced by Oxford Economics, highlights that the capital generates 21% of the UK's total GVA and made a net contribution of £1.4 billion* in 2009-10 – the only positive figure among all other regions of the country.
With revenues down and expenditure rising as a result of the recession, this figure is understandably down on previous years. However, London’s net contribution to the UK fiscal position is forecast to rise substantially by 2015/16 with the financial and business services sector remaining a core driver of growth.
Stuart Fraser, Policy Chairman at the City of London Corporation, said:
"This report demonstrates London's ongoing importance for wealth generation at a time when the government is attempting to reduce the overall UK budget deficit and promote growth across the economy.
"As home to a uniquely skilled workforce – with an estimated 1.7 million graduates – and the principle gateway for international trade and investment, London has a vital role to play in leading the UK’s economic recovery.
"Nonetheless, London – like the rest of the UK – has not escaped the impact of the global recession and we cannot afford to take our competitive position for granted. Concerns over higher taxation, increased regulation, infrastructure issues and immigration need to be addressed if we are to sustain London's pre-eminence in global financial and business services.
"As the Prime Minister has acknowledged, it is in all our interests to encourage growth and prosperity that is balanced across the UK. London shares a mutually beneficial relationship with other regions and has a pivotal role in spreading the capital needed to grow industries in other parts of the UK. This is not a zero sum game and the capital's contribution to the Exchequer remains vital to the health of the broader economy."
*The figure of £1.4bn for London's net contribution to the UK public finances in 2009-10 is the mid-point estimate in a range from -£2.7bn to £5.5bn.
Download a copy of London's Competitive Place in the UK and Global Economies
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