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boff

Andrew Boff is a Member of the London Assembly.

This site has consistently argued for the re-balancing of the English economy and for the renaissance of our northern cities – whether this be in the form of better railways, greater fiscal powers, or enhanced localism. Such a desire is laudable and is one I wholeheartedly agree with. Indeed, if Britain is to successfully compete in the ‘Global Race’, then it needs regions outside of London that are able to compete with the great North American, Asian and European conurbations.

But, as desirable as this is, as a Member of the London Assembly I take issue with how the current debate on English devolution focuses either on England as a whole, as with EVEL, or on our so called ‘core cities’. Very little attention has been granted to England’s greatest asset: London.

No other city in Europe, or perhaps the world, can compare with London’s economic, cultural and historical pedigree. It is London that makes Britain the global power that it is. The economy of our capital is equivalent to the entire economy of Sweden, and without London present in UK GDP figures, we would slip from 6th to 9th in the world’s economic rankings – below Russia.

Indeed, London is the primary driver of wealth in the UK, not just for its immediate region but for the nation as a whole. Roughly the equivalent of £2,500 from every Londoner goes to subsidise other parts of the UK. This equates to approximately £1 in every £5 generated through taxation in London being transferred out of the city. With further fiscal devolution granted to England’s ‘core cities’, London should arguably be able to claw most of this subsidy back through its own fiscal devolution. To do otherwise would be grossly unjust to Londoners: Britain’s primary wealth generators.

A common objection to handing more fiscal and political powers to London is that the capital has already had its devolution process. The Blair Government established the offices of the Mayor, the Greater London Authority (GLA) and the London Assembly. The argument goes that, if London has these bodies, why then does it need further devolution?

It is true to say that London has received a fair amount of devolution over recent decades. But what London has at its disposal in terms of political and fiscal power will be inadequate for equipping the city for the 21st Century challenges that it alone faces. By 2020, the capital’s population is expected to reach nine million and by 2030 its population is likely to be more than ten million. The additional pressures that such a surge in population brings will undoubtedly affect London’s ability to effectively manage its housing, jobs, transport and public service demands. No other city or region in the UK will need to cope with such pressures. Because of this, we need a new political and fiscal settlement for our capital.

First and foremost, we ask that London be given control of the revenues generated from the five main property taxes: council tax, business rates, stamp duty, annual tax on enveloped dwellings and capital gains tax. The City of Westminster and Kensington and Chelsea together raise as much stamp duty as Wales, Scotland and Northern Ireland combined. Yet London’s stamp duty is used to massively subsidise other parts of the country. Granting the capital control of its own property tax revenues will ensure that London, both through the GLA and the boroughs, receives a fair deal from devolution.

Then there are the much needed political reforms. The Mayor of London already possesses the UK’s largest personal electoral mandate, and has sizeable powers with which to conduct his or her functions. If the office of the Mayor was to also receive vastly increased fiscal and tax powers, then it stands to reason that the body that is tasked with holding the Mayor to account, the London Assembly, receives equally augmented powers.

Because of this, I believe we need an independent Budget Office for London, which would be similar to the National Audit Office for central government and would scrutinise the financial performance of the GLA and the Mayor. This would equip the Assembly with the resources needed to better hold to account a mayoralty that has increased fiscal and political powers. The new body would be funded through the revenues generated from fiscal devolution and would not increase the costs of running the Assembly itself. The Communities and Local Government Select Committee has been very supportive of this in the past.

Taken together, greater fiscal powers for the GLA and the Mayor and enhanced political powers for the Assembly would both ensure that the capital can overcome its unique challenges. It is, therefore, essential that the next Conservative Government implements DevoLondon alongside any devolution to England’s regions.

7 comments for: Andrew Boff: Let London keep its Stamp Duty revenue

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