London pays more tax and gets less back

12 April 2012

The respected Institute for Fiscal Studies has undertaken an analysis of the tax and benefit impact on London of Labour's 13 years in office for this paper.

And the results are striking: on average, London families are paying £1,213 more in tax than in 1997. And those figures take into account tax credits and other benefits for the low-paid. No other region in Britain has contributed so much to the Treasury; by contrast, the solidly Labour North-East is actually better off.

Some of the tax burden on London can be attributed to the fact that many of the nation's high earners live here. But the capital has also, as our campaign for the dispossessed made clear, many poor communities - more than a fifth of households live in relative poverty.

And it is debatable whether their interests have been well served by some Government spending, particularly on the tax credit system, which is unduly complex and bureaucratic.

London has paid over the odds in terms of tax yet it is questionable whether it has got back anything like a fair return, especially in terms of improvements to the transport infrastructure. And that sense of grievance could work against Labour in the election.

All the parties should heed our analysis today, showing that London has a greater concentration of key marginal seats than almost anywhere else in the country. Politicians should take note: London matters.

Swine flu con

It is, of course, excellent news that the swine flu pandemic last year never happened. The World Health Organisation, allegedly under pressure from pharmaceuticals companies, had declared a pandemic that might cost the lives of millions.

That did not happen. But as a result of the scaremongering, the British government bought vaccines to cover the entire UK population, three-quarters of them provided by GlaxoSmithKline.

That mistake has cost the taxpayer up to £300 million. The Government has renegotiated its contract with the company so that it now receives only a third of the agreed number of vaccines but will pay two-thirds of the price. A contract of this kind, for a contingency, should have been far better framed.

Many come out of this badly. The Government's then Chief Medical Officer, Sir Liam Donaldson, who released data suggesting that 60,000 people could die of swine flu, looks ridiculous. In fact, 457 people died with swine flu, but as 80 per cent of them had underlying conditions, the real number is probably around 100.

But the institution that has been most discredited by this is the World Health Organisation, whose sensationalist warnings resulted in so much hysteria. It is now being investigated by the Council of Europe. The Government should take this body's pronouncements with a good pinch of salt.

Get a move on

The closure of the Albert Bridge between Chelsea and Battersea has caused enormous disruption to traffic, business and residents on both sides of the river.

The renovation of the bridge is due to go on for 18 months, more time than it took to erect the Empire State Building.

Yet Kensington & Chelsea council is adamant that work will cease at 6.30pm each evening and at weekends, on the grounds that the amount of noise and dust would inconvenience residents.

This is preposterous. Many residents, as we have reported, would willingly put up with some noise at night in order to expedite the work.

But in any event, the interests of the public should not be compromised by the convenience of the few.

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