Sadiq Khan:London needs stronger voice and new powers to boost growth

26 July 2016

The Mayor of London, Sadiq Khan, today steps up the capital’s drive for further powers in the aftermath of the decision to leave the European Union. He has tasked the London Finance Commission to bring forward a new, beefed-up set of devolution proposals, arguing that “nothing should be ruled out” when it comes to giving London a stronger voice and the tools it needs to protect jobs, wealth and prosperity.

Sadiq Khan has commissioned Professor Tony Travers from the London School of Economics to reconvene the London Finance Commission – a group of political and business leaders which outlined an initial set of devolution measures for the capital in 2013.

The Mayor believes that the fallout from the vote to leave the European Union has significantly changed the economic landscape. He expects the Commission to report back with a more comprehensive, wide-ranging suite of devolution requests that will be presented to ministers.

In 2013, the London Finance Commission concluded that Londoners should have a more direct say over a greater proportion of taxes raised in their city. It proposed devolving the full suite of property tax revenues streams - including council tax, stamp duty land tax and business rates – giving London the ability to invest in its own infrastructure and promote economic growth.

Sadiq Khan has already held initial discussions with the new Chancellor of the Exchequer, Philip Hammond, who indicated that he is open to further devolution for London.

Sadiq Khan said: “London needs a stronger voice so that we can protect jobs and growth from the economic uncertainty ahead.

“It is vital that we have greater control over how the capital is run – so we have more control over the things we need to improve our city such as skills training, housing, business rates and the tools to tackle air quality, health and crime.

“London’s population is the same size of Wales and Scotland combined, but we have far less control over how the capital is run.

“A stronger voice for London will be good for the whole country, because when London succeeds, Britain succeeds.

“We have strong support from cities in every region of Britain, from leading business and civil society groups as well as from every level of London government.

“I look forward to the new recommendations of the London Finance Commission. Nothing should be ruled out and I expect Government to give us the tools to ensure London continues to prosper for decades to come.”

Tony Travers said: “"More than ever before Londoners need their city's government to be agile and to have the power to use taxation generated locally to promote economic growth.

“London would not take more of the nation's resources, but use the existing tax and spending better.

“The Mayor and the boroughs know better than Whitehall how to run responsive and effective public services.

“Devolution would be good for London and would take pressure off the UK government at a time when it needs all its capacity to make Brexit work as well as possible".

Notes to editors

The London Finance Commission found in 2013 that only seven per cent of tax paid by London residents and businesses is redistributed directly by locally elected bodies (the Mayor and borough councils). This contrasts with other world cities; for example, 74 per cent of London’s funding comes from centralised grants, compared to 31 per cent in New York, 25 per cent in Berlin, 17 per cent in Paris and eight per cent in Tokyo. London is also a ‘tax exporter’, home to 13 per cent of the population but generating 18.5 per cent of the national tax take.

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