Secondly, the City does not add value to the UK: its activities may well, in fact, be the best explanation for the UK’s economic underperformance precisely because it sucks value out of everything that would otherwise contribute to the value of life in this country.
Would help if there were the occasional shred of evidence for it. Flogging legal, accounting and banking services to foreigners produces about 4% or so of GDP. Seems value to me.
“…it sucks value out of everything that would otherwise contribute to the value of life in this country.”
That pretty much sums up the activities of The State, he’s taking aim at the wrong target.
@Stoneyground
Beat me to it.
And me!
This always reminds me of David Graeber’s bullshit jobs. That well, someone is personally putting their hand in their pocket to pay for it, so it’s probably worth figuring out why before you say it’s pointless.
Tim, you forgot insurance which adds £billions to the balance of payments and dozens of £billions to GDP
I was looking through an old comments thread recently, on a financial website. The topic was annuities (an interesting subject because it turns out that some people have an irrational, visceral hatred of the things).
Various commenters asserted, without any evidence, that the insurance companies made huge profits from annuities. I pointed out that many insurers had withdrawn from the market from which I inferred that it wasn’t a profitable paradise. You can imagine how many carefully reasoned ripostes that brought forth. Yup: zero.
Mind you, I suspect that the unreasoning hatred may extend to insurance companies themselves.
Well I think one can say that the activities of Murphy contribute absolutely nothing to the well being of the country. Sadly with places like Dachau a historical memory his contribution to the GDP numbers is solely on the debit side. What a pathetic figure he is.
4%, Tim? The financial services sector accounts for around 12% of the UK’s GDP. In 2023, the sector contributed £243.7 billion in real gross value and over £110 billion in taxes.
@ Theophrastus
Tim’s 4% relates to the amount financial and legal servicres make from *foreigners* – excluding the amount that they make in the UK itself.
John’s near right. 4% is “The City”. 12% ois financial services. So, the wholesale markets as against the whole sector like car, life insurance and so on.
I’ve no idea what the export numbers are specifically…
John77 – thanks!
Lloyds of London has gross premium income of £52bn (exceeding that of all the insurance companies based in London which jointly have £48bn), more than four-fifths of of which comes from overseas – roughly half from North America, a quarter from Europe, useful chunks from Japan and Australia, and smaller amounts from Latin America, Africa and Souith Asia. Last year was unusually profitable at £10.7bn – if we say £9bn profit from overseas (mostly re-insurance, some insurance), that’s £132 for every man, woman and child in the UK.
That is *just one* of the City of London’s contributors that each add value to the UK economy.
Weird how he never mentions the vast thicket of red tape that causes people to have to spend money on solicitors and accountants that “does not add value “.
Probate would be one example. You have to do all the work even if there’s no way the estate will be liable for IHT. The end result is no tax raised and the form-stampers thousands of pounds richer.
That’s exactly the same fallacy as counting all the costs and none of the benefits, except the opposite way around.
Not that I think the City is an overall cost, but it’s best not to use fallacies even when defending a truth.
It’s not a fallacy from my point of view. I’m dealing with my late Mother’s estate and a significant chunk of money is going to disappear in pure regulatory costs. Not to mention the time I’m spending on it.
In some cases to comply with rules that didn’t exist when the will was drawn up. And also to effectively prove that we don’t owe tax.