London

UK economy increasingly reliant on London tax, report finds

London skyline
Image caption The report shows tax generated by the capital increased by £28bn in a decade

The UK's economy has become increasingly reliant on the taxes paid by Londoners over the last decade, a new report has found.

Think tank Centre for Cities said the capital generated about 30% of the UK's tax revenue in 2014-2015, a rise of 5% compared to 2004-2005.

However, other UK cities saw little or no growth in their tax intake in the same time period.

Centre for Cities said it showed how important the capital is "post-Brexit".

Chief executive Alexandra Jones called for "more to be done to strengthen the economies and tax bases of other city regions such as Greater Manchester, the West Midlands and the North East".

While the amount of tax generated in London increased by 25% (£28bn) in real terms between 2004/5 and 2014/15, Manchester's tax intake grew by only 1%, while Birmingham, Glasgow and Leeds all saw significant decreases in their tax intake.

It suggests any slowdown in London's economy following the vote to leave the EU would pose major challenges to both the capital and other parts of the country.

Image copyright PA
Image caption London was the most resilient UK city to the economic shocks of 2007-08, Centre for Cities found

Centre for Cities research is based on revenue from "economy taxes" which account for 88% of all taxation and include income tax, land and property taxes, and VAT.

On Wednesday the Labour leader Jeremy Corbyn criticised the prime minister for failing to re-balance an economy which currently sees 44% of infrastructure investment concentrated on the capital.

Mayor of London Sadiq Khan said the report highlighted the importance of more balanced growth across the UK.

"Further devolution, so that London and all our cities and neighbourhoods can take back control, is vital to unleash the energy and dynamism that this country needs in the light of its decision to leave the EU," he said.

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