By Daniel Hunter

The Mayor of London, Boris Johnson, has announced the creation of the London Finance Commission to examine how the capital could keep a greater share of the growing tax revenues Londoners generate for the public purse.

Chaired by leading academic Professor Tony Travers, from the London School of Economics, the commission will examine the potential for London to keep more of the revenue from the taxes that Londoners pay within the capital.

The commission has been set up by the Mayor as part of a key manifesto pledge he made to lobby the Government to ensure that London gets back in funding a fair share of what it contributes to the national purse.

He has invited a panel of finance and local government specialists to examine how the current way of funding London can be improved to help to secure its future as the world’s leading big city, driving jobs and growth and boosting the capital’s economy.

“The capital must not be seen simply as a cash cow for the rest of the UK and the time has come for London to take greater control of its own destiny. I firmly believe that Londoners should see more of the growing tax revenues they generate for the public purse staying here in the capital," the Mayor of London, Boris Johnson, said.

“Whether it's Crossrail or Tube upgrades I have consistently had to make the case to Government to secure the vital investment that benefits not just London, but the wider UK economy as well. These negotiations have convinced me that there has to be a better way to fund this great city and the London Finance Commission will shine a spotlight on how it could be done."

Tony Travers, Chair of the London Finance Commission, said: “The London Finance Commission will provide a great opportunity to look at how the government of London can reasonably have more control over the taxes paid in the capital. It will also allow the capital to be compared with cities overseas. Many of these, such as New York and Berlin, have far greater financial freedom than London.

“It is important to stress that the Commission will not argue for London to take resources from other parts of the UK. But it will examine the possibility that the city could keep a greater share of any growth in the tax-base. The government and Opposition have both stated they favour more freedom for English cities. The Commission will analyse the case for London taking a significant step towards the kind of autonomy enjoyed by Scotland and Wales."

Mayor Jules Pipe, Chair of London Councils, said: “At a time when there are serious financial pressures on the boroughs and the services they provide right across London, it is vital that we work together to face the economic challenges. The Commission provides a valuable forum in which to debate an improved funding model for local government in London — one that will allow cash-strapped local authorities to properly fund critical local public services.”

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