Ritchie on those Scottish numbers

The first attempt by the Office for National Statistics to break down the UK’s budget deficit by region has demonstrated the importance of the capital and highlighted how taxes and public spending are used to narrow the north-south divide.

Experimental data from the ONS showed that only three regions of the UK – London, the south-east and the east of England – ran a budget surplus in the 2015-16 financial year, the latest year for which figures are available.

Every Londoner provided £3,070 more in tax revenues than they received in public spending, while people living in the south-east ran a surplus of £1,670 per head. The east of England turned a small deficit in 2014-15 into a surplus of £242 per head in 2015-16.

By contrast, spending exceeded tax revenues by £5,440 per head in Northern Ireland and by £3,820 in the orth-east. Scotland, which has seen its public finances badly affected by the plunge in global oil prices, ran a deficit of £2,830 a head.

At which point Richie tells us that his early diatribes about the Scottish numbers are…..well, actually, no, he’s told us nothing that I’ve seen so far.

He’s obviously sorting out Manchester’s security problems at a conference in Holland or something.

16 comments on “Ritchie on those Scottish numbers

  1. By contrast, spending exceeded tax revenues by £5,440 per head in Northern Ireland

    That’s an interesting number for next time the issue of the North joining the Republic crops up.

  2. “Every Londoner provided £3,070 more in tax revenues than they received in public spending”

    Pfft. Walk down any high street in London, see if you still think that’s true.

  3. London has highest unemployment in England, the highest LHA rates, the highest ratios of hospitals to population, Arts Council, transport investment, lots of government departments. I could go on. I suspect the contribution from the residents and commuters of the doughnut counties around London has been understated, but as the analysis says, it’s experimental data.

  4. The Met – 368 police per 100k of population
    2nd Merseyside – 244 per 100k of population
    Last Wiltshire – 137

    I agree with Charlie Suet

  5. “Every Londoner provided £3,070 more in tax revenues than they received in public spending”

    I suspect that about 1 in 5 Londoners provided 5 times that, or more.

  6. London has some incredibly high earners, despite the huddling masses. Remember that the top 1% of earners account for some 30% of all income tax paid in this country; and the bulk of that 1% live in London and the southeast.

  7. PF,

    Eire’s reluctance to bankrupt themselves by assuming NI’s welfare liabilities has been a sticking point for decades.

  8. Regarding London’s share of public spending vs tax revenue, have they addressed the distortion of the hordes of Whitehall?

  9. Charlie Suet:

    Yes, true, but we’re only talking ‘net’s here.

    I’m sure the residents of the City State Of London, many of whom are actually British or at least British-assimilate, are punching well above the majority non-British majority of H. sapiens residing in London.

  10. Does this take into account the fact that many companies have their head office in London, but may have business premises all across the country? For example Sainsburys HQ is in London, so does all its taxes get attributed to London, despite the stores being all over the place?

  11. I’ll fire a question to the ONS later on that Jim
    The GLA money is not included – that is made explicit in the report
    What isn’t clear is for example the treatment of a Bucks resident commuting to London, whether Employers NI ( which is paid for by the worker ) is booked as London taxes, and if CT is booked as London taxes
    The expenditure on schools and hospitals and child benefit etc is clearly booked as Bucks expenditure.

  12. Bongo,
    The methodology docs are here;

    https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/methodologies/countryandregionalpublicsectorfinancesmethodologyguide#income-tax

    (there’s a broken link on the release).

    Income tax and NI are allocated accorded to residential postcode.

    Corporation tax (for category 2 profits, whatever they are) is allocated regionally according to employment data, presumably from the PAYE residential data.

    If there’s no employment data, CT is allocated to the head office address, so there might be a problem if a PSC is registered to an accountant in Ely, but the owner lives and works in Plymouth.

    For Employers NI (just read it again);

    “Data
    NUTS1 breakdown of Class 1 NICs from HM Revenue and Customs’s (HMRC’s) 1% PAYE sample, where these data are on a residential basis. However, some unknown and non-UK addresses have to be pro-rated to NUTS1 regions.

    Methodology
    Percentage breakdowns for each NUTS1 region are calculated from the Class 1 NICs data and applied to the UK total of all NICs revenue.”

    Which I take to mean that Employers NI is allocated according to the region using the employee’s postcode in the same way as Income tax and employee’s NI.

  13. There’s also the fact that the big cheeses of a company will live in or around London (where the HQ is) and thus their tax will be attributed to London, while the value is actually being created by the workers out in the factory/warehouse/shops in the sticks.

  14. Which is possibly less of a problem, since the spending will be attributed to the proles’ hovels out in the boondocks.

  15. 7 years ago this economist from PC told Paxman that London is over-spending relative to income by a bigger margin than Wales
    Quite funny

Leave a Reply

Name and email are required. Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.