Emergency government support ‘tax break for London’

London has received £7bn more in emergency government support than the North East and North West combined, according to a new report.

The report by Centre for Progressive Policy claims ‘poorly targeted recovery policies’ have benefitted the capital far more than other parts of the country.

In particular, it claims government support for London has been £7bn higher than the North East and North West combined, despite having similar population sizes.

And it estimates 6.5 million people living in deprived local authorities unlikely to be helped by the Levelling Up Fund, Towns Fund or Community Renewal Fund.

The think tank has called on the government to prioritise future funding distribution by deprivation and need.

An analysis of spending per head on key emergency economic measures suggests:

• Furlough: £1,300 per resident spent in London by comparison to £620 per resident in the North East.

• Self-Employment Support: £440 per resident in London by comparison to £190 per resident in the North East.
• Business Loans: £360 per resident in London by comparison to £150 per resident in Scotland.
• Universal credit: more evenly distributed with London, the North East and North West topping the spending at around £80 per resident.

‘The scale of inequalities between and within places requires a generational effort to level up with greater investment in public health, adult skills, childcare and youth services directed at the poorest parts of our society,’ said the CPP’s head of research, Ben Franklin.

‘Instead, our analysis reveals the bulk of recovery efforts will be on a tax break for London driven by financial services and business services. The government then reverts to spending cuts and tax rises by 2023. Given this outlook, we can only assume that the government has either failed to grasp the nature, scale and urgency of inclusive recovery or has given up on its own levelling up agenda.’

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