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London is funding the rest of the UK, and other things we just learned about the nation's taxes

The latest instalment of our weekly series, in which we use the Centre for Cities’ data tools to crunch some of the numbers on Britain’s cities. 

So those nice people at the Centre For Cities have just published a new report crunching the numbers on economy taxes – those relating to labour and property, basically – for 62 British cities, in the years from 2004-05 to 2014-15.

It’s packed full of interesting maps and charts and (spoilers) massively depressing statistics. Here’s what we learnt.

In nearly a third of British cities, the tax take has fallen

The national picture on economy taxes is pretty encouraging. In 2004-05, they stood at £283bn; by 2014-15, they’d increased by 12 percent £317bn in 2014-5 (all figures in 2014-15 prices to make sure they’re comparable). The decade in between those two stats included the worst recession in decades, so that doesn’t seem like bad going.

Look at individual cities, though, and the news is less good.

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In 20 out of 62 cities featured, the tax take has fallen. And those 20 include some biggies: Birmingham, Glasgow and Leeds.

There’s a regional pattern to the figures

Well, two regional differences, really. Here’s a map:

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In an entirely shocking development, in England, the fastest growing tax bases are mostly in the south; the fastest shrinking ones mostly in the north. Up in Scotland, the divide is prosperous Edinburgh and Aberdeen, and shrinking Dundee and Glasgow.

I know, we were surprised too.

Tax per job seems to be falling is most cities

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In other words, an increase in employment is not necessarily leading to an increase in tax take. That might be a recession thing – or it might point to the rise of relatively low value jobs.

Britain is a freak country

Urban theorists like Geoffrey West like to talk about the agglomeration effect: larger cities mean more connections, which means more productivity, which means more growth.

Except, for some reason, in Britain. Over the last 10 years, much of the biggest growth in tax take has come in smaller cities. Larger cities – with the single exception of London – don’t make the list:

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The Treasury is increasingly dependent on fewer, more productive cities

Although British cities are contributing almost the same share of taxes to the national pot as they did a decade ago, these tax revenues are being generated by fewer cities.

In 2004/05 the top 10 largest cities generated 66 per cent of all urban economy taxes, in 2014/15 this had risen to 68 per cent.

Which doesn’t sound great if you want a resilient economy, but okay. More concerningly:

The Treasury is terrifyingly dependent on London

You know all that silly talk of London going independent to retain its EU membership? And you know the way much of the rest of the country’s opinion seems to be “good riddance”?

Well:

In 2004/05, London generated as much economy tax as the next 24 largest cities combined (40 per cent of all economy taxes generated in cities). In 2014/15 the capital created almost as much tax as the next 37 cities (45 per cent of the urban total). This shift is even more staggering when looking specifically at labour taxes.

To make the same point another way: in 2004-05, London generated 25.3 per cent of the national tax take. Which was bad. In 2014-15, it generated 28.6 per cent of the national tax take. Which is worse.

Even the most expansive definitions of London, which cover the entire commuter belt, give the city a metropolitan population of around 13m. It is, at most, 20 per cent of the UK population. It’s punching way above its weight

To hammer that home for a moment:

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Or, just in case you’re still not getting it:

There’s a lot more in the report. There’s even a whole new data tool to play with. This, for example, is an interactive map of percentage change in economy taxes generated in 62 British cities between 2004 and 2014.

You can check the new data tool out here.

Jonn Elledge is the editor of CityMetric. He is on Twitter, far too much, as @jonnelledge

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