Jobs Growth In City Helps London Double Boost To UK Coffers

26 Dec 2012

London's contribution to the nation’s coffers  has doubled over the last financial year, helped by a rise in City jobs as well as the Olympic Games and Queen’s Jubilee.

The greater London economy paid £10 billion more in tax revenues than it received in 2011-12, according to  forecasts from the City of London Corporation and Oxford Economics. That is up from a £5.1 billion surplus for 2010-11.

The fiscal surplus was  underpinned by jobs growth in areas such as professional services, with City law firms and accountants increasing their headcounts over the year. Despite banking cuts, the number of City jobs now stands at about 398,000, a 3.2% year-on-year rise.

Consumer spending was also lifted by the Royal Jubilee weekend as  well as the Olympic and Paralympic Games, with wealthy tourists visiting the capital.

The City of London Corporation said the amount of VAT generated in London is expected to have risen from £16 billion to £17.2 billion year on year, helping the capital to contribute 18.5% of the UK’s total tax take.

Mark Boleat policy chairman at the City of London, said: “London’s success benefits the UK as a whole, given the pivotal role it plays in spreading capital to other parts of the country. As the 2012 Olympics so vividly demonstrated, infrastructure investment in London — the UK’s principal gateway for international trade and investment — supports jobs and growth across the UK. This is not a zero-sum game.”

The report predicts that almost 80% of the new jobs generated in London between now and 2025 will be in the professional and financial services sectors, compared to just less than 60% between 2000-12. London’s fiscal surplus is forecast to grow to just over £50 billion by 2025.

In comparison, the UK budget is forecast to be in surplus of just £10 billion by this point, highlighting the importance of the capital to the rest of the country.

However, public spending has also risen in the capital.

London accounted for 26.8% of UK transport spending with infrastructure projects such as Crossrail, the Thameslink upgrade and improvements to the London Overground network being funded.

Boleat said that growth in London would benefit the rest of the country, particularly in the financial services sector.

 “It is also important to remember that, contrary to public perception, the majority of financial services jobs are actually located outside London. JPMorgan, for example, is the biggest employer in Bournemouth; Deutsche Bank has a considerable presence in Birmingham; Citigroup has a significant interest in Belfast,” he said.

“The forecast growth of London’s business and financial services sector will ultimately help to deliver jobs in towns and cities across the UK.”

Source: http://www.standard.co.uk/business/business-news/jobs-growth-in-city-helps-london-double-boost-to-uk-coffers-8428672.html