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London jumps on devolution bandwagon with ‘it’s tough down here’ claim

London jumps on devolution bandwagon with ‘it’s tough down here’ claim

🕔04.Nov 2014

London is fighting back in the great devolution debate by insisting that the capital must also benefit if English city regions are to be given additional powers and budgets, reports Paul Dale.

The Centre for London think tank has published a list of demands urging the next Government to transfer a range of powers including the right to levy taxes to the Mayor and borough councils.

‘The Brightest Star, a Manifesto for London’, is written by Ben Rogers, a former member of the Prime Minister’s Strategy Unit.

The document claims that many people have the wrong impression of London and believe it is “too big and successful for the nation’s good”. In fact, the paper argues, London must expand even further in order to create more wealth for the greater good of the country.

It’s suggested that towns such as Slough, Luton, Thurrock and Dartford could benefit from joining the capital and that a new government “should give serious consideration to the case for allowing London to expand, and for neighbouring areas that want to join it to do so”.

The manifesto seeks to challenge claims that London has it too easy, insisting that the capital faces big challenges with high levels of poverty and that even middle income families are being squeezed out of the housing market.

“It is far from the case, as is sometimes suggested, that London has it easy – that it enjoys rude health while the rest of the country struggles. In fact London’s star shines almost too brightly.

“As it attracts and retains more and more residents, visitors and investors, there is a real risk of the city falling victim to its own success.

“London has long had exceptionally high levels of poverty and worklessness. But over the last decade living costs have increased dramatically while earnings have stagnated, making the city an increasingly tough place for modest and middle-income households, as well as its many poor ones.

“Moreover, with London set to grow by as much as a fifth in the next 20 years, equivalent to a city the size of Birmingham, these pressures are only likely to intensify.”

The document continues: “We need to be thinking not about how to curtail London’s success but how to sustain and build on it, while ensuring that it makes the greatest possible contribution to the rest of the UK.

“A new Government should give serious consideration to the case for allowing London to expand, and for neighbouring areas that want to join it to do so. Government should in particular explore the merits of establishing a mechanism to allow the triggering of a referendum in areas around London that might want to become part of it.”

The London manifesto makes the following recommendations:

  • Central government should devolve a broad range of powers – over taxation, regulation and services – to London government, as part of a broader programme of devolution to Scotland, Wales, North Ireland and other English cities and regions. Devolution to London is required regardless of the powers devolved to English MPs over English matters.
  • Government should devolve responsibility for property taxes to London government, as recommended by the London Finance Commission. In particular, London government should be given the power to design a property tax regime suited to London’s unique circumstances, set property  tax rates, and retain all related revenues.
  • The GLA and the boroughs should be allowed to borrow money responsibly against their assets and income within the prudential borrowing code. Centrally imposed borrowings ceilings should be removed.
  • Government should lay out a long-term plan for further tax devolution for London, including the assignment of a proportion of income tax. The power to set income tax rates should remain with central government.
  • Government should give London power to raise small discretionary taxes including taxes on hotel bedrooms, alcohol and unhealthy foods.

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