Tuesday, February 20, 2007

South East Still Paying

Oxford Economics have produced updated estimates of the fiscal transfers between UK regions. The story will be familiar to regular BOM readers:

  • the Greater South East (ie London, plus the South East, plus the Eastern regions) supports everyone else

  • the fiscal transfer from the GSE is currently some £30bn pa (2004/05)

  • that's equivalent to about 7% of regional GDP (see here), which is huge- much larger eg than any of those contentious EU transfers, and much larger even than the post WW1 reparations

  • the main gainers are Scotland, Wales, Northern Ireland, and the North East, where every single resident gets a sub of well over £2 grand a year

What the South East gets from the deal is entirely unclear. Apart that is, from a Big Spending Labour government imposed on it by those over-represented socialist bastions up North. And grandstanding excrescences like Peter Hain going on about how those that generate the wealth shouldn't keep it (for a more measured critique of Mr Hain, see here).

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