This review treats London as a one-way cash cow — again

Rachel Reeves largely ignored the capital in her spending review, despite her economic plans depending on it.

- By Jonathan Prynn

The Chancellor took us on a breezy whistle-stop tour of the entire United Kingdom in her spending review statement to Parliament.

Few corners of the realm were ignored as Rachel Reeves name-checked the towns and cities that will benefit from her defence, health and infrastructure spending largesse over the coming years.

Lincoln, Portsmouth, Rosyth, Glasgow, Stevenage, Barrow, Derby, Blackpool and Sheffield all got a shout-out as she ran MPs through some of the greatest hits of her £1.4 trillion annual sending plans. But, as has become the pattern over recent chancellor statements, there was scant mention of London, the metropolis of nine million people and economic superpower that generates much of the tax revenues she will be busily handing out over the next four years of the Parliament.

The oversight did not come as a great surprise. London Labour council leaders who visited Downing Street for briefings in the run up to the spending review came away stony-faced after being told by unsmiling Treasury ministers that they were having to make “difficult decisions” in a very tough economic environment. But without the capital firing on all cylinders, there is no hope of the UK achieving the growth that Keir Starmer and Reeves promised the nation. London is the golden goose.

Latest ONS figures showed the public sector raised £216.4bn of revenue from London taxpayers in 2023, while public spending only totalled £172.8bn in the capital. That £43.6bn annual fiscal surplus — it will be bigger this year — helps fund the spending programmes that the Chancellor outlined in her speech.