London is funding the rest of the UK, and other things we just learned about the nation's taxes

A generic stock image to represent the concept of taxes. Image: Pixabay.

The latest instalment of our weekly series, in which we use the Centre for Cities’ data tools to crunch some of the numbers on Britain’s cities. 

So those nice people at the Centre For Cities have just published a new report crunching the numbers on economy taxes – those relating to labour and property, basically – for 62 British cities, in the years from 2004-05 to 2014-15.

It’s packed full of interesting maps and charts and (spoilers) massively depressing statistics. Here's what we learnt.

In nearly a third of British cities, the tax take has fallen

The national picture on economy taxes is pretty encouraging. In 2004-05, they stood at £283bn; by 2014-15, they’d increased by 12 percent £317bn in 2014-5 (all figures in 2014-15 prices to make sure they're comparable). The decade in between those two stats included the worst recession in decades, so that doesn’t seem like bad going.

Look at individual cities, though, and the news is less good.

Click to expand.

In 20 out of 62 cities featured, the tax take has fallen. And those 20 include some biggies: Birmingham, Glasgow and Leeds.

There's a regional pattern to the figures

Well, two regional differences, really. Here’s a map:

Click to expand.

In an entirely shocking development, in England, the fastest growing tax bases are mostly in the south; the fastest shrinking ones mostly in the north. Up in Scotland, the divide is prosperous Edinburgh and Aberdeen, and shrinking Dundee and Glasgow.

I know, we were surprised too.

Tax per job seems to be falling is most cities

Click to expand.

In other words, an increase in employment is not necessarily leading to an increase in tax take. That might be a recession thing – or it might point to the rise of relatively low value jobs.

Britain is a freak country

Urban theorists like Geoffrey West like to talk about the agglomeration effect: larger cities mean more connections, which means more productivity, which means more growth.

Except, for some reason, in Britain. Over the last 10 years, much of the biggest growth in tax take has come in smaller cities. Larger cities – with the single exception of London – don't make the list:

Click to expand.

The Treasury is increasingly dependent on fewer, more productive cities

Although British cities are contributing almost the same share of taxes to the national pot as they did a decade ago, these tax revenues are being generated by fewer cities.

In 2004/05 the top 10 largest cities generated 66 per cent of all urban economy taxes, in 2014/15 this had risen to 68 per cent.

Which doesn't sound great if you want a resilient economy, but okay. More concerningly:

The Treasury is terrifyingly dependent on London

You know all that silly talk of London going independent to retain its EU membership? And you know the way much of the rest of the country's opinion seems to be "good riddance"?

Well:

In 2004/05, London generated as much economy tax as the next 24 largest cities combined (40 per cent of all economy taxes generated in cities). In 2014/15 the capital created almost as much tax as the next 37 cities (45 per cent of the urban total). This shift is even more staggering when looking specifically at labour taxes.

To make the same point another way: in 2004-05, London generated 25.3 per cent of the national tax take. Which was bad. In 2014-15, it generated 28.6 per cent of the national tax take. Which is worse.

Even the most expansive definitions of London, which cover the entire commuter belt, give the city a metropolitan population of around 13m. It is, at most, 20 per cent of the UK population. It's punching way above its weight

To hammer that home for a moment:

Click to expand.

Or, just in case you’re still not getting it:

There's a lot more in the report. There's even a whole new data tool to play with. This, for example, is an interactive map of percentage change in economy taxes generated in 62 British cities between 2004 and 2014.

You can check the new data tool out here.

Jonn Elledge is the editor of CityMetric. He is on Twitter, far too much, as @jonnelledge

Want more of this stuff? Follow CityMetric on Twitter or Facebook.


 
 
 
 

To make electric vehicles happen, the government must devolve energy policy to councils

The future. Image: Getty.

Last week, the Guardian revealed that at least a quarter of councils have halted the roll-out of electric vehicle (EV) charging infrastructure with no plans to resume its installation. This is a fully charged battery-worth of miles short of ideal, given the ambitious decarbonisation targets to which the UK is rightly working.

It’s even more startling given the current focus on inclusive growth, for the switch to EVs is an economic advancement, on an individual and societal level. Decarbonisation will free up resources and push growth, but the way in which we go about it will have impacts for generations after the task is complete.

If there is one lesson that has been not so much taught to us as screamed at us by recent history, it is that the market does not deliver inclusivity by itself. Left to its own devices, the market tends to leave people behind. And people left behind make all kinds of rational decisions, in polling stations and elsewhere that can seem wholly irrational to those charged with keeping pace – as illuminted in Jeremy Harding’s despatch from the ‘periphery’ which has incubated France’s ‘gilet jaunes’ in the London Review of Books.

But what in the name of Nikola Tesla has any of this to do with charging stations? The Localis argument is simple: local government must work strategically with energy network providers to ensure that EV charging stations are rolled out equally across areas, to ensure deprived areas do not face further disadvantage in the switch to EVs. To do so, Ofgem must first devolve certain regulations around energy supply and management to our combined authorities and city regions.


Although it might make sense now to invest in wealthier areas where EVs are already present, if there isn’t infrastructure in place ahead of demand elsewhere, then we risk a ‘tale of two cities’, where decarbonisation is two-speed and its benefits are two-tier.

The Department for Transport (DfT) announced on Monday that urban mobility will be an issue for overarching and intelligent strategy moving forward. The issue of fairness must be central to any such strategy, lest it just become a case of more nice things in nice places and a further widening of the social gap in our cities.

This is where the local state comes in. To achieve clean transport across a city, more is needed than just the installation of charging points.  Collaboration must be coordinated between many of a place’s moving parts.

The DfT announcement makes much of open data, which is undoubtedly crucial to realising the goal of a smart city. This awareness of digital infrastructure must also be matched by upgrades to physical infrastructure, if we are going to realise the full network effects of an integrated city, and as we argue in detail in our recent report, it is here that inclusivity can be stitched firmly into the fabric.

Councils know the ins and outs of deprivation within their boundaries and are uniquely placed to bring together stakeholders from across sectors to devise and implement inclusive transport strategy. In the switch to EVs and in the wider Future of Mobility, they must stay a major player in the game.

As transport minister and biographer of Edmund Burke, Jesse Norman has been keen to stress the founding Conservative philosopher’s belief in the duty of those living in the present to respect the traditions of the past and keep this legacy alive for their own successors.

If this is to be a Burkean moment in making the leap to the transformative transport systems of the future, Mr Norman should give due attention to local government’s role as “little platoons” in this process: as committed agents of change whose civic responsibility and knowledge of place can make this mobility revolution happen.

Joe Fyans is head of research at the think tank Localis.