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The whole thing is unbelievable. As I write these words, Gordon Brown is still holed up in Downing Street. He is like some illegal settler in the Sinai desert, lashing himself to the radiator, or like David Brent haunting The Office in that excruciating episode when he refuses to acknowledge that he has been sacked. Isn’t there someone – the Queen’s Private Secretary, the nice policeman on the door of No 10 – whose job it is to tell him that the game is up?
Off in Brussels this zombie Labour government is in the process of obliging future generations of Britons to pay “whatever it takes” to bail out the euro, and there is nothing we can do to stop it. The Lib-Con negotiations are still going on, in a foretaste of the Belgian orgies of tedium and paralysis that proportional representation will inflict on the country. Everyone is trying politely to work out exactly how many Cabinet seats to give a party that came a resounding third and did worse than in 2005. Will Vince Cable be needing Dorneywood in addition to his Red Box and his seat at the Cabinet Table? And if Chris Huhne needs a ministerial car and a driver, will Mrs Huhne require someone to help with the shopping?
Will Gordon ever leave the bathroom?
Can I suggest that we avert our eyes from the soap opera and focus on the problem this election was meant to address – how to get the British economy moving again. We should be talking about how to create jobs for people, not jobs for politicians, and in all the jabber about changing the voting system there is a risk we will forget how the economy works. We are told that the SNP and Plaid Cymru and the DUP are likely to acquire a special importance over the next 12 months. We are warned that they are sending in ransom lists of demands – for Irish ferry-boat subsidies and Alex Salmond autobahns in the Highlands and Islands – as the price of their support in Parliament.
Whatever the merits of these schemes, they must be considered against the background of a colossal budget deficit. It will be the incoming government’s first task (whenever it finally in-comes) to hack that deficit back and to reassure the markets. In deciding what to cut we should remember what a budget deficit is. It is the difference between two vast numbers – total government spending and total government tax receipts – and it follows that you tackle a deficit not just by slashing spending but by doing everything in your power to boost receipts.
That is why David Cameron was so right to reject Labour’s hike in National Insurance, because boosting receipts is not just a matter of whacking up tax. It is about stimulating the wealth-creating sectors of the economy, and that means remembering which regions of the economy actually create wealth, create jobs and export huge sums of tax to the rest of the country.
Well, you know what is coming next, and I hope I won’t be accused of chauvinism if I remind you that there are only three tax-exporting regions of the country, and they are London, east England, and the South-East; and investment in London is not only justified on the basis of need, since the capital has a rapidly growing population and more child poverty than anywhere else in the country. It is also the best way to make money for the whole British economy. I agree with Jim O’Neill, the chief economist of Goldman Sachs, in that I am basically bullish about the prospects of this country. This is not Greece.
We have the language, we have the time zone, and we still have an astonishing ability – for all the damage done to manufacturing – to export the most unlikely things all over the world. I don’t just mean JCBs and Viagra. There are factories in London that are sending ever growing numbers of chocolate cakes to France and bicycles to Holland, and that is before we have even considered the city’s enormous earnings from finance, law, advertising and services of all kinds.
Again, I apologise for saying all this, but I fear that if I don’t say it, no one else will; because, unlike Wales, Scotland and Northern Ireland, London is not specifically represented in Parliament, and unlike the inhabitants of most comparable world cities, Londoners have very little say over how their taxes are spent. And yet London and the South-East produce 43 per cent of total UK tax revenues, and the capital alone exports up to £20 billion per year in tax to the rest of the country. That is because the shape of the London economy is completely different from the rest of Britain’s, with only 28 per cent of the economy accounted for by state spending – compared with 40 per cent in the country at large; while the figure in Wales is up to 60 per cent and 62 per cent in Northern Ireland.
In other words, London is the throbbing, pounding heart of this country’s private sector super-region. The only comparable areas in the world are New York- New Jersey, the Île-de-France and Tokyo-Yokohama. It is the motor of the British economy, and that is why I hope readers in Scotland and elsewhere will forgive me if I continue to beat this drum and insist that we would be mad, mad, mad to cut the infrastructure investment – housing and transport – that allows the London workforce to live there and allows commuters to get there. It is the efforts of that workforce that will help to lead Britain out of recession, and whatever cuts the Treasury may have in store, and whether dear Vince Cable is involved or not, they should remember that London is the goose that lays the golden eggs, and if the Scots and the Welsh want more golden eggs to pay for their projects, then we need to look after that goose.