London ‘out of control’ and inequality gap set to grow says leading economist

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  By a Newsnet reporter
 
A leading economist has warned that the UK’s geographical gap in equality is set to grow if London continues to suck resources from other parts of the UK.
 
Speaking to the Financial Times, Professor Tony Travers of London School of Economics warned that London was now behaving like a black hole that nobody knows how to control.

“London is the dark star of the economy, inexorably sucking in resources, people and energy.  Nobody knows how to control it.” He told the FT.

His comments were echoed by Ben Rogers, director of the Centre for London think-tank who said London was, “seen as getting more than its fair share of government money and attention.”

Rogers added: “If London’s dominance continues to grow, these suspicions are bound to deepen.”

Massive capital spending projects such as Crossrail and the London Olympics have helped the city bounce back from the banking crisis.  Overall the benefits of Crossrail are estimated to be at least £42 billion in current prices.

However the amount of money flowing into London and the south east has led to fears of another housing bubble with house prices in the region growing by 15% in the last year.  Crossrail alone is expected to add an extra £5.5bn to house prices in London.

Fears that wealth will continue to concentrate in the south east of England to an even greater extent were recently voiced by UK Business Secretary Vince Cable who admitted that London was becoming a “giant suction machine sucking the life blood out of the rest of the country”.

Commenting Stewart Hosie MP, SNP Treasury spokesperson, said:

“London has a disproportionate and deeply damaging pull on UK policy.  Westminster is putting all its economic eggs in one basket – a high risk strategy, which also disadvantages everywhere else.

“We know that Westminster is itching to get rid of the Barnett Formula and cut Scotland’s cash by up to £4 billion – with MPs from each of the anti-independence parties signing up to the House of Commons report calling for this massive cut in the event of a No vote.  It makes the choice of two futures in September’s referendum even clearer.

“Vote No and get huge cuts to Scotland’s budget from a London-centric government, whoever is in power – or vote Yes and create a fairer more prosperous country where economic decisions about Scotland are made where they should be – in Scotland.”