Give Mayor power to raise his own cash, says Boris Johnson's policy chief

12 April 2012

Boris Johnson should be given greater tax-raising powers by the coalition Government, his policy director said today.

Anthony Browne admitted it was a "big ask" but said the Mayor had "earned" the right to have his fiscal powers extended.

Mr Johnson only has powers over the mayoral share of the council tax, which he has frozen for the past two years.

London raises only seven per cent of its own income — from the council tax precept — compared with 50 per cent in New York and 80 per cent in Tokyo.

Mr Browne suggested Labour's devolution of powers to London in 2000 had been "half baked" and it was time for the capital to raise more of its own funds.

"We are the most fiscally infantilised big city on earth. We have to go cap in hand to central government, both for money and permission," he said.

"Our revenues don't increase as the economy grows. Although we are statutorily responsible for the economic development of London, we get no financial benefit from it.

"We can't invest in measures to boost the London economy, and reap the rewards of economic growth."

He said both Mr Johnson and former mayor Ken Livingstone believed the office should have greater tax powers.

In an article for trade journal Public Servant, he added: "It would require a leap of trust from Whitehall, but we have more than earned it."

The most likely proposal would be for income tax rates to be reduced by a certain sum — for example, 10p in the pound — across all bands and London's central grant reduced by the amount correspondingly lost to the Treasury.

City Hall would then be able to decide which income tax rate to apply.

The Standard revealed before the general election that Mr Johnson was in talks with the Tory party about handing extra powers to City Hall.

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