Clegg warned not to ‘stamp’ on London

In a speech the Deputy Prime Minister said the debate on the UK’s economy “has been cast too narrowly”.

“The focus has been almost exclusively on London-based services as the principal source of UK growth,” he said.

“The most successful economies are driven not just by their capitals, but by multiple thriving centres.

“Take Germany: Munich is an economic powerhouse; Frankfurt a financial centre; the Rhur, a cluster of industrial cities; Berlin is the country’s creative heart.

“America is home to Washington, Chicago, New York, LA. India is driven by Delhi, Bangalore, Mumbai. These are strong economies, built on independent international cities; each with their own USP.”

Baroness Jo Valentine, who heads the business group London First, said:

“We want to see growth in all parts of the UK, but you don’t encourage growth in the regions by stamping on the city whose success is subsidising them.

“London actually helps attract financial sector jobs and investment into the UK. More than half of the 1 million or so jobs in the finance sector are already based outside London, often in areas earmarked for regeneration.

London is a global financial centre that competes against just a few foreign hubs such as New York, Singapore and Hong Kong, not Manchester, Cardiff or Glasgow.

“The UK is not Germany, the USA or India – we need to recognise that and get behind those sectors that give us strength rather than trying to bring everything down to the level of the weakest link.”

Mr Clegg said the previous government “recycled and redistributed City of London tax receipts to other parts of the country through the long arm of Whitehall.”

“And in doing so they took the easy route: expanding the public sector in the North, paid for by the private sector in the South. Emasculating the North and overburdening the South.

“Trying to prop up a nation of 100,000 square miles on the profits of just a single square mile.”