Chancellor George Osborne today dealt a major blow to Boris Johnson’s bid to seize control over billions of pounds paid in stamp duty on London house purchases.
The Treasury said devolving powers over the tax to the Mayor would have “legal, economic and constitutional implications” and could lead to different rates in different parts of the country.
This was likely to have “negative effects on the property markets”.
Treasury minister David Gauke added that stamp duty helps pay for “essential services the Government provides and supports on a national basis”.
Mr Osborne is also facing pressure from former Chancellors Lord Lawson and Lord Lamont to raise the threshold for paying 40 per cent income tax.
Lord Lawson, who introduced the 40p rate in 1988, said: “The people who are paying it today are middling professionals who should not be in the higher rate.”
