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Business News
The Conservative Mayor of London Boris Johnson has warned the coalition government against making huge cuts to spending in public sector projects in London in a strongly worded statement issued last night by City Hall.
"Ahead of the first budget of the new government, the Mayor of London, Boris Johnson has today urged the Chancellor not to cut spending in the capital. A new report published today commissioned by GLA Economics has found that investment in major infrastructure projects like Crossrail and the Tube upgrades is crucial for London to retain its competitiveness."
City Hall is arguing that reducing the national debt "will require a combination of spending cuts, tax rises and critically, investments in key infrastructure projects".
A report published by GLA Economics and produced by Professor Tony Travers and a team at the London School of Economics (LSE) to look at public spending priorities in London found that:
* Capital spending in London appears to be at a low level in relation to GDP
* Public capital spending appears relatively low as compared to other world cities
* Investment in infrastructure is key to increased productivity, output and tax revenue
The Mayor has written to the Chancellor George Osborne outlining his priorities for London in advance of the emergency Budget on 22 June.
The Mayor Boris Johnson said: "I want to remind the Government that growth is essential to the health of our public finances. Only by continuing to invest in London and the South East- the engine room of the national economy- will the nation as a whole be able to grow its way out of trouble. The UK cannot afford the cost to the economy if the capital is starved of vital investment in infrastructure projects like Crossrail and the upgrade of the Tube."
Tony Travers of the London School of Economics said: "The current method of allocating public spending around the UK takes into account different regions' and localities' needs - but has hitherto taken little account of their different propensities for growth. The ability of public sector investment to help generate tax receipts for the Exchequer should also be an important consideration at this time for the wider UK economy."
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