Further economic value is created through agglomeration effects in the UK legal services ecosystem and the wider UK economy. Agglomeration effects, facilitated by characteristics of the UK economy,These include the clustering of professional services in cities such as London, Birmingham, Manchester and other urban areas in Great Britain. See TheCityUK (2020), ‘Legal excellence, … Continue reading allow expertise from the use of English law and UK legal services in internationally mobile transactions to permeate through the economy. All UK businesses benefit from having access to concentrations of highly specialised, expert legal services, as well as from knowledge sharing and increases in productivity and innovation in those legal services.
Agglomeration effects can generate significant economic value. For example, the agglomeration benefits of being based in London are a key factor in the city’s success as a global hub for commercial and professional activities.GLA Economics (2016), ‘Economic evidence base for London’, November Proximity to other businesses and access to a highly skilled labour market reduces transaction costs and facilitates knowledge sharing. This leads to higher productivity in the area and significant value for the UK—for instance, London has the highest per capita tax contribution in the UK at £18,195, compared to the UK median of £10,349.This is the median tax revenue per person across the Nomenclature of Territorial Units for Statistics NUTS1 regions. This includes all forms of tax. Office for National Statistics (2019), ‘Country … Continue readingLondon also had the highest average annual growth in tax revenue of all UK regions from 2010 to 2018,Oxera analysis based on Office for National Statistics (2019), op. cit. possibly reflective of the continuous value generated by agglomeration effects.