Tax, trains and planes

Richard Havers has written an excellent response to all the hand wringing that's been going on over BA's Scottish flight reductions.

From Richard:

Reading the attacks on BA in the paper’s comment column you’d think that they were a part of a Unionist alliance against Scotland. People are calling for the Scottish Government to do something – it's a case of welcome to the real world!

But, and yes there's always one in the blogosphere, isn't there?

Back in 2007 I wrote about this very subject referring back to what I'd written in 2002!

Here's the 2002 quote:

The UK is probably the most centralised of all modern countries. Even after devolution, 87% of our taxes are levied at the national level. In the US it's 18%. In the rest of Europe taxes are levied roughly half by the national governments and half locally. Where the taxes are collected goes economic and political power. I remember reading some years ago that Washington DC had the highest per-capita wages in the US and that most of them were dependent in some way on the federal government. That's in a country levying a mere 18% of taxation at the centre.

A very large part of London's economy is there precisely because it is the capital city of a country whose government spends some 40% of our GDP and whose London-resident ministers channel almost all of that expenditure through the London-based civil service. This in turn means that London hosts the national press (English, not British actually), the BBC, commercial TV, media-associated industries like advertising and PR, the political parties, almost all lobbyists, charities, trades unions and professional organisations. This centralisation of decision makers and influencers in turn makes London the natural location for the head offices of companies whose operations are spread throughout Britain. All of this is why the South-east dominates our economy and why it is impossible to solve the imbalances in housing and transport.

If we want to see a more economically balanced Britain we can either reduce government expenditure to, say, 10% of GDP, or we can spread government more evenly throughout the country. I support the first option. I suspect that neither will be implemented.

And what's changed since then? Well, the state probably spends more than 40% of the economy. But the UK remains just as centralised, and that's a big reason why so many Scots need to go to and from London. Fix the centralisation and we can worry less about the flights. Of course, when I'm dictator of the universe we'll be bringing back DC-3s and Stratocruisers, not to mention LMS and LNER steam trains...

Problem fixed.