Who's Got Their Snouts in the Trough?

Published: 12 March 2000 - George Rosie, Sunday Herald

Last week, Daily Mail writer Ann Leslie launched a staggering attack on "subsidy junkie" Scotland. However, points out George Rosie, Ms Leslie should be looking much closer to home.

If the London edition of the Daily Mail truly represents Middle England, then Middle England is working itself up into a strop about goings-on north of the Border. Last week, Ann Leslie, the paper's star writer, launched into an extra ordinary sneerfest about our shiny new Scotland. Her metropolitan disdain knew no bounds. The Holyrood parliament building was a "ridiculous monument to Scotland's national identity", the Gaelic language was the province of "be-sandalled and bearded former polytechnic lecturers" and so far we have been running our own affairs without "any degree of competence". Devolution, Leslie says, has proved to be a "disastrous experiment", laced through with corruption and sleaze which will have her own Scottish ancestors "weeping in their graves". The headline to her piece said it all. "As the Mail's chief foreign correspondent, I have visited 70 countries," she declares, "but my trip to Scotland has been one of the saddest" Crikey! Is Donald Dewar presiding over the end of civilisation as we know it? Could Lord - call me Sir - David Steel be the Antichrist? Are the four horsemen of the apocalypse about to gallop out of the hole at the bottom of Holyrood Road? Most of Ms Leslie's meanderings are easy enough to dismiss. They are the reactions of a middle-aged, dyed-in-the-wool Tory fretting over constitutional change. But there is one strand in her argument I find irritating and that is the notion that the rest of Britain, particularly Scotland, only manages to get by on handouts from London. In the light of devolution's somewhat beleaguered status at the moment, I felt it was time to dust down its core charge - that the real "subsidy junkies" live in the south east of England. It seems the myth needs to be "Scotched" once more.

As Leslie sees it: "Southern England is the chief generator of tax for the United Kingdom overall (which happens to subsidise Scotland to the tune of at least £5 billion a year)." I think of this argument as Cockney economics. And currently you are as likely to find its practitioners on the left as the right. Mayoral candidate Ken Livingstone is one. So is Frank Dobson's running mate, Trevor Phillips.

In the run-up to London's elections here's what they'll be telling us: London is now so dynamic, so powerful, so rich, so influential and so awesome it is "carrying" the rest of Britain. It is the "engine" of the British economy. In this Cockney cosmogony, the car-builders of the Midlands, the steel-makers of Wales, the petrochemical producers of the north east and the whisky distillers and oil extractors of Scotland count for next to nothing. Indeed, some Cockney economists now argue London would be much better off without the rest of boring old Britain, particularly the northern parts. They see London (with the southeast attached) as a Singapore-on-Thames. Hong Kong with resident royals. A 21st century city state with an economy bigger than Sweden's or Switzerland's and a future which will thrive in the glittering world of financial services, showbiz, movie productions, designer stuff - and not much else.

According to this theory, were it not for the dazzling entrepreneurs who labour inside the M25 Britain would long ago have slid under the North Sea. As they see it, the rest of us have been living high on London's handouts for years. Now London wants its money back - and soon. Demanding refunds from the rest of Britain - as per Mrs Thatcher and the EC - will, it seems, be a key role for the new directly elected Mayor and his Cabinet.

Well, there's nothing wrong with playing to your electorate. That is what Red Ken, loyal Dobbo and the rest will be doing until May 4. It's all good knock-about stuff, even if it does irritate Her Majesty's subjects outside the M25. But as the Cockney economists have been running off at the mouth for some time now, and will go on doing so for some time more, it seems like a good idea to see how their claims stack up.

And, of course, they don't. The point they seem unable - or perhaps unwilling - to grasp is the extent to which London's economy is underpinned by the vast apparatus of the British State. Its ramifications are awesome and they are overwhelmingly centred on London and the southeast.

With the exception of the Welsh and Scottish Executives, every great department of state is located in London. The Ministry of Defence, with its long tail of armouries, research establishments, barracks, training schools etc, is particularly strongly rooted in and around London. Between them, these government departments employ many thousands of people and spend billions of pounds of taxpayers' money, most of it in London and the southeast.

What is extraordinary is how few Londoners seem to realise this. Even the well informed are ignorant of the extent to which they are subsidised. They are largely unaware of the apparatus of the publicly funded state that surrounds them. They know about 10 Downing Street and vaguely of the big, grey government buildings in Whitehall, but that's about it. The huge panoply of public authorities, executive agencies, research councils, regulatory bodies, tribunals etc - not to mention the apparatus of English law - somehow fails to register. They are just part of the urban landscape. Nobody ever questions whether any might do their job as well, or better, elsewhere in the UK.

Why, for example, does the British Standards Institution have to be located in London? Is there any reason for the Charity Commission to be inside the M25? Why should the Office of Gas Supply not be in Manchester? Could the Housing Corporation not be located somewhere in the Midlands? Wouldn't it make sense to have the Horserace Totalisator Board (the Tote) in Cheltenham or Newmarket? Given that most of England's jails are scattered all over the country, why do the men and women who run Her Majesty's Prison Service have to be in the metropolis? And so on.

When pressed, all of these organisations - and there are more than 200 of them - tend to come up with the same answer: to be near government. Take away the British parliament, government and the civil service and much of what drives London's economy would collapse. All the comfortable, well-paid, middle-class jobs in quangos large and small would either wither on the branch or disappear completely as they shifted to wherever the power lay.

Even that brand new, if now somewhat tacky, institution the National Lottery is run from London. Not only is Camelot itself London-based, but so are the various bodies which regulate the inward and outward flow of lottery cash. The National Lottery Commission, previously known as Oflot, employs 37 people at its Victoria headquarters. The National Lottery Charities Board, also in Victoria, employs 86 at its headquarters. Much of the lottery money flows through the Millennium Commission, which has a staff of around 100 in London to service the decisions of the nine commissioners.

At 200 or so the job numbers are insignificant - although Truro, Macclesfield or Falkirk would be delighted with them - but their location is not. The National Lottery may be new but the controlling instinct is as old as the English State. England was metrocentric long before the Unions of 1603 and 1707. It would never have occurred to the powers that be to run and supervise the National Lottery from anywhere but London.

Take, for example, the BBC, an organisation from which Ann Leslie occasionally benefits. The BBC is funded entirely by a compulsory tax on television watchers. At the last count - 1998-99 - we were taxed a whopping £2.2bn to pay for the corporation, which is a big annual cake by anybody's standards. The BBC does offer a few slices to what it calls the "nations and regions" of Britain, but the biggest, sweetest slice by far goes to London. That is where the decisions are made. That is where the big money is spent. It is poured into the big radio and television broadcasting centres in Portland Place, Shepherd's Bush and the White City.

Nor is that all. Her Majesty's government chips in as well. The BBC World Service is funded by the Foreign and Commonwealth Office by a grant-in-aid of £160 million a year - almost as much as the Holyrood parliament building will cost. And where are our millions spent? In London.

And, of course, as well as the BBC per se there is the great swarm of "facilities houses", production companies, camera operators, lighting firms, costume houses and mobile canteens that thrive on the BBC's largesse. They come and they go, but they employ hundreds, maybe thousands of people. And they suck in a lot of talent from all over the UK. Now, I am not suggesting the BBC should be dismantled and moved to Birmingham, Glasgow or Manchester, although the folk in these cities would no doubt welcome the suggestion. Or that the television licence - of which I deeply approve - should be scrapped. But I do think that when public spending is being discussed, even by the likes of Ann Leslie, the billions spent by the BBC over the years should be brought into the equation. And London should have the decency to acknowledge that the BBC is yet another piece of public funding from which it benefits hugely.

It might also consider the virtual stranglehold London has on the UK's, and particularly England's, publicly funded art galleries and museums. The list is long and the annual funding is strong - The National Gallery (£18.6m), the National Portrait Gallery (£4.6m), the Tate Gallery (£18.2m), the Wallace Collection (£1.8m), the British Museum (£32.9m), the Natural History Museum (£26.9m), the Science Museum (£21.2m), the Victoria and Albert Museum (£29.1m), the Commonwealth Institute (£0.6m), the Imperial War Museum (£10.5m), the National Maritime Museum (£10.1m), the National Army Museum (£3.2m) and the Royal Air Force Museum (£4.8m).

And then, of course, there is the new British Library at King's Cross. The sorry saga of that project makes Miralles' Holyrood look like small beer. After years of muddle, technical problems and soaring costs the building finally came in at £511m, almost three times the original budget. The library now runs on an annual grant of £83.2m and employs around 2400 people.

One way or another, we are currently paying London's galleries and museums around £265m every year to cover running costs and acquisitions. Londoners see this as their due. "This is the capital, after all," was the rationale offered by one politician. But London's tax-supported cultural scene is important to the city's prosperity. It may even be crucial. A survey published just last week of 400 top businessmen by the London Chamber of Commerce and Industry showed 75% of them regarded London's "cultural diversity" as one of the main reasons they preferred the city as opposed to other European capitals. In other words, without the artistic talent sucked into the city by huge amounts of public spending, London would be a lot less attractive to big business.

Where London fails to score, as all the mayoral candidates are reminding us, is transport. Getting around the Great Wen remains hard but is getting easier. And so it should, given the amount of our money which has been spent, particularly shuttling folk into the one-time tax-break enterprise zone known as Docklands. According to London Transport, extending the Jubilee Line from Green Park down to Docklands cost a cool £3.5bn. Only £400m of that was private money. Nobody seems quite sure how much it cost to extend the Docklands Light Railway across the Thames down to Lewisham. In her whinge about Scotland, Ann Leslie makes the now familiar claim that "southern England is the chief generator of tax for the United Kingdom overall". On the face of it this is true - but only on the face of it.

One of the reasons why London and the southeast generates so much tax revenue is because it is rich in corporate headquarters. Which means that not only is it home to the corporate world's big earners and big tax payers, but it is where the companies pay their corporation taxes. Which in turn means the tax money generated by, let's say, BP's oilfields off the Scottish coast are attributed to London. Now given the number of British companies big and small which have their headquarters in London but make their money all over the UK, that is a massive distorting factor. It makes London seem much richer than it is. And it makes the "economic regions" of Britain seem much poorer than they really are.

And where there are corporate headquarters there are all the ancillary service industries that headquarters need - lawyers, accountants, advertising agents, tax experts, designers, architects, graphic artists, printers, messenger services, even high-toned caterers for board room lunches and dinners. London is full of them. They proliferate in the interstices between the corporations. And they provide work, some of it very well paid, for many thousands of people. Take public relations, for example. At the last count, in 1998, the Public Relations Consultants Association had 150 members on its books employing around 10,000 people and doing more than £300m worth of business. At least 81 of these companies - 54% of the UK total - are based in London. "There are two main reasons," says Chris McDowell, chief executive for PRCA. "The public relations business is dominated by American ownership and when the Americans think of Britain they think of London. And when PR firms say to their new clients where do you want us to be, 90% of those clients say London." Whatever the reason, the PR business in London is booming. McDowell calculates it is growing at the rate of around 20% a year, with a long way to go. And the fastest expanding sector is "public affairs" - the political lobbying firms. By their very nature these firms have to be where the politicians are, in London.

London is one of a handful of great, world-class cities. Only New York and perhaps Tokyo have the same kind of resonance and global clout. As such, London needs and deserves to be supported by the rest of Britain. All that the rest of us - Scots, Welsh, Northern Irish and "provincial" English - ask is that Londoners should be aware of just how much they owe the hard-pressed taxpayers who live outwith the M25. The folk of London and the southeast are, in fact, the subsidy junkies of Britain par excellence. It is time they acknowledged the fact.

But I am not holding my breath. Nor should you. Metrocentricity is a profound affliction, as the utterances of the London mayoral candidates and the likes of Ann Leslie demonstrate. It is hard to shake. It may well be incurable. Expect to hear much more of it in the years to come. It could result in the demise of the United Kingdom.

The List of the 200 Organisations cited
GOVERNMENT DEPARTMENTS AND PUBLICLY FUNDED OFFICES BASED IN LONDON
Government Departments
Ministry of Agriculture, Fisheries and Food; The Cabinet Office; Department for Culture, Media and Sport; Ministry of Defence; Department for Education and Employment; Department of the Environment, Transport and the Regions; Foreign and Commonwealth Office; Department of Health; Home Office; Department of Social Security; Department of Trade and Industry; The Treasury

Executive Agencies and Regulatory Bodies
Adjudicator's Office; Advisory, Conciliation and Arbitration Service; College of Arms or Heralds College; Arts Council of England; Royal Fine Art Commission; Audit Commission for Local Authorities and the National Health Service in England & Wales; The Bank of England; Boundary Commission for England and Wales; British Broadcasting Corporation; The British Council; British Film Commission; British Film Institute; British Pharmacopoeia Commission; British Railways Board; British Standards Institution; British Tourist Authority; British Transport Police; British Waterways; Broadcasting Standards Commission; Central Office of Information; Certification Office for Trade Unions and Employers Associations; Charity Commission; Church Commissioners; City of London Police; Civil Aviation Authority; Commonwealth Development Corporation; Covent Garden Market Authority; Criminal Injuries Compensation Authority and Board; Crown Estate; Board of Customs and Excise; Design Council; The Duchy of Cornwall; The Duchy of Lancaster; Export Credits Guarantee Department; English Heritage; English Partnerships; English Tourist Board; The Environmental Agency; Royal Commission on Environmental Pollution; Office of Fair Trading; Foreign Compensation Commission; Registry of Friendly Societies; Gaming Board for Great Britain; Office of Gas Supply; Government Actuary's Department; Government Hospitality Fund; Health and Safety Commission; Health and Safety Executive; Historic Royal Palaces; Home-Grown Cereals Authority; Horserace Totalisator Board; Housing Corporation; Human Fertilisation and Embryology Authority; Human Genetics Advisory Commission; Independent Housing Ombudsman; Independent Television Commission; Industrial Injuries Advisory Council; Board of Inland Revenue; Intelligence Services Tribunal; Interception Commissioner; Interception of Communications Tribunal; Department for International Development; Land Registry for England and Wales; Law Commission for England and Wales; Law Officers' Departments; Legal Aid Board for England and Wales; Corporation of Trinity House; Commission for Local Administration in England; London Regional Transport; Lord Chancellor's Department; Lord Great Chamberlain's Office; Lord Privy Seal's Office; Office of Manpower Economics; Medical Research Council; Millennium Commission; Monopolies and Mergers Commission; National Audit Office; National Consumer Council; National Endowment for Science, Technology and the Arts; National Heritage Memorial Fund; National Insurance Joint Authority; National Investment and Loans Office; Office of the National Lottery; National Lottery Charities Board; National Missing Persons Bureau; National Physical Laboratory; National Savings; Office for National Statistics; New Opportunities Fund; Office of the Parliamentary Commissioner for Administration; And Health Service Commissioner; Parliamentary Commissioner for Standards; Parliamentary Counsel; Parole Board for England and Wales; Pensions Compensation Board; Office of the Pensions Ombudsman; Political Honours Scrutiny Committee; Port of London Authority; The Post Office; Her Majesty's Prison Service; Prisons Ombudsman for England and Wales; Privy Council Office; Public Health Laboratory Service; Public Trust Office; Commission for Racial Equality; The Radio Authority; Office of the Rail Regulator; Royal Commission for the Exhibition of 1851; Royal National Theatre Board; Office for Standards in Education (OFSTED); Committee on Standards in Public Life; Office of Telecommunications; The Treasury; Solicitor Council on Tribunals; United Kingdom Sports Council; Unrelated Live Transplant Regulatory Authority; Women's National Commission

Police and Security Organisations
British Transport Police; City of London Police; Intelligence Services Tribunals; Interception Commission; Interception of Communications Tribunal; Metropolitan Police Service; National Crime Squad, England and Wales; National Criminal Intelligence Service; National Crime Squad and National Criminal Intelligence Service Authorities; Police Complaints Authority, England and Wales; Police Information Technology Organisation; Serious Fraud Office; Secret Intelligence Service (MI6); Security Service (MI5); Security Service Commissioner; Security Service Tribunal; Royal Parks Constabulary

Galleries, Museums and Libraries
National Gallery; National Portrait Gallery; Tate Gallery; Wallace Collection; The British Library; Library and Information Commission; Museums and Galleries Commission; The British Museum; Natural History Museum; The Science Museum; Victoria and Albert Museum; Museum of London; Commonwealth Institute; Imperial War Museum; National Maritime Museum; National Army Museum; Royal Air Force Museum

Tribunals
Agricultural Land Tribunals; Copyright Tribunal; Data Protection Tribunal; Employment Tribunal Central Office, England and Wales; Employment Appeal Tribunal; Immigration Appellate Authorities; Independent Tribunal Service; Lands Tribunal; Pensions Appeals Tribunals, England and Wales; Office of the Social Security and Child Support Commissioners; The Solicitors Disciplinary Tribunal; Special Commissioners of Income Tax; Special Immigration Appeals Commission; Transport Tribunal; VAT and Duties Tribunal

International Organisations
The European Bank for Reconstruction and Development ;International Maritime Satellite Organisation; International Maritime Organisation

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