London Must Have Power To Raise Own Taxes, Says Report

James Drury
By James Drury Last edited 49 months ago
London Must Have Power To Raise Own Taxes, Says Report

More power to City Hall? Photo by glosszoom via the Londonist Flickr pool.

Calls for London to be given more powers got a further boost today by a report which says that giving cities the ability to control tax and immigration would boost economic growth in the UK to the tune of £79bn by 2030.

The RSA City Growth Commission has recommended the government puts in place legislation to devolve more powers to cities by 2015, saying the current centralised economy is "not fit for purpose".

Boris Johnson has previously called for Stamp Duty on London property to be retained by the capital; while shadow London Minister (and Tooting MP) Sadiq Khan has been among those pressing hard for greater fiscal powers to the city. The London Finance Commission also reported back in May 2013 that the capital should have greater tax-raising powers.

Those arguing for London to have greater control over tax say that City Hall is facing an unprecedented challenge on school places, housing and other infrastructure — but the current property boom means stamp duty and other levies go to Whitehall for redistribution rather than being retained in the city to resolve these issues.

Giving more control over duty means City Hall would be able to raise or lower taxes in order to control city growth more effectively; preventing overheating or stimulating growth, it is claimed.

City Growth Commission chairman and leading economist Jim O'Neill, told BBC Radio's Today programme that the report has the backing of Chancellor George Osborne, and that he would be "surprised" if some of its recommendations were not adopted in the Autumn Statement.

Last Updated 22 October 2014