Letter: Subsidy to London

Sir: Sarah Hogg ("England gets tired of constant gifts to Scotland", 20 December) presents interesting factors on government spending across the UK and the possible rationale for high levels of spending in Scotland, Wales and Northern Ireland. She implies that government spending in Scotland is high in relation to its reasonable level of Gross Domestic Product.

The latest official figures confirm that pounds 4,772 per head was spent in Scotland in 1997, 18 per cent above the UK average. Figures for the English regions are not exactly comparable but I estimate that the Government would have been spending around pounds 4,700 per head in London, 16 per cent above the UK average and only 2 per cent below the Scotland figure.

In comparison, spending in Yorkshire and Humberside would be less than pounds 3,900 per head and 17 per cent less than the London figure. In relation to the GDP figures this looks perverse, as London's GDP is 40 per cent higher than Yorkshire Humberside's.

The high level of government spending in London adds to inflationary pressures and congestion costs in London, increases its competitive advantage over other regions, and holds back economic growth across much of the country. If there is a case for high levels of government spending in London then there is an even stronger case for such levels of spending in the poorest part of the UK.

D R SMITH

Principal Research Officer

Sheffield City Council

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