Russell Lynch: London’s the golden goose... Brexit could cook it

Londoners are a generous bunch. Measured by what we put into the rest of the country and what we get back in government spending, each of us chipped in an extra £3070 to the public weal last year.

The Government raised £15,576 from every Londoner but we got back a share of the pot worth £12,686, so we’ve been subsidising the UK to the tune of £26.6 billion, according to experimental figures from the Office for National Statistics.

In fact, our capital is one of three regions running a fiscal surplus with the rest of the country — London’s is by far the biggest — while the North-West is running a £21.8 billion deficit. Financially at least, it’s our lot to prop up the rest of the country.

A non-Londoner might argue back: “So what? You earn more than the rest of the country so you can afford to pay more.”

Other stats from our official number-crunchers ostensibly add weight to that: this week we’ve also learned that in 2015, London had the highest disposable income per head at £25,293.

That’s well above the national average of £19,106. The well-to-do burghers of Kensington & Chelsea, for example, have an average £52,298 to play with, almost three times as much as the national average.

London boroughs accounted for seven of the top 10 areas ranked by disposable income in 2015. So stop moaning, our critic might say.

Unfortunately, it’s not quite as simple. True, Londoners earn far more in salaries. But those reading this on the Tube, and wondering where exactly that disposable income of £25,000 is, won’t be surprised to learn that the ONS’s data takes no account of dearer living costs and only a partial account of property.

Rent and capital repayment of mortgages aren’t included in their data — only interest repayment on mortgages, which is rather like a United Nations meeting without the US.

Londoners are also, on average, younger than the rest of the population; for example, just 16% are of pensionable age rather than 27% in the retirement haven of the South-West.

That means they pay the most in taxes — about £5366 a head — and receive the least in benefits at £4510. That compares to the English Riviera at the end of the M5, where the pensioner-heavy population gets nearly £6000 each on average from the state.

As well as being the workhorse of the UK, the nation’s financial fortunes in property also rest on the capital.

In the year to March 2016, London contributed £4.8 billion, or 45%, of the £10.7 billion in stamp-duty revenues garnered by the Exchequer, compared with just 1.4% in Wales, for example.

But will London be the stamp-duty cash cow this year? The latest borrowing figures show takings from the tax down £200 million in April compared with 12 months earlier, and the Council of Mortgage Lenders tells us that homebuyer activity in London has fallen for the second quarter in a row.

Blame previous stamp duty hikes and Brexit, but the market is suffering, and so will the public coffers as a result. In fact, tax revenues are sluggish across the board, at a time when higher inflation is pushing up the nation’s interest bill.

And that raises fears the surprise £10.4 billion jump in borrowing seen in April is less a blip and more the worrying start of a trend.

But far from nurturing the capital to protect its valuable revenues, the Conservatives’ manifesto pledge of cutting immigration to the tens of thousands is anathema to the growth story.

So, too, is the threat hanging over the City from the Brexit negotiations and the “no deal” ballsy-ness of Brexit Secretary David Davis.

The question is, who else will Theresa May find to pay the rest of the UK’s way if London’s golden goose is strangled?