Financial freedom for London

London Mayor Boris Johnson has backed a report calling for the capital to be given greater financial freedom in order to fund major infrastructure projects.

Latest ITV News reports

Mayor wants capital to keep more of its money

Boris Johnson wants the power to tax and spend like Scotland and Wales.

He's also asking the government to let the capital keep more of the money it raises -- rather than share it with the rest of the country.

He says the current system is "simply not fit for purpose" given London's size and stature.Our Political Correspondent Simon Harris reports

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London's disproportionate amount of tax

Credit: PA

‘Raising the capital’ found 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).

When compared to other world cities; 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.

Mayor's calls for devolution

"The current system is simply not fit for purpose and is out of step with the funding settlements enjoyed by cities of comparable size and stature."Furthermore, Londoners will increasingly question why London government cannot enjoy similar fiscal freedoms as those afforded to the devolved governments in Scotland and Wales. London's key bodies are agreed that the capital's financial future lies in greater devolution. We will now be taking this case to Government."

– Boris Johnson, Mayor of London

London is "a political giant but a fiscal infant"

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Boris "I am not naturally inclined to impose any new taxes." @itvlondon

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Boris: "The greatest city on earth has been fiscally infantilised" @itvlondon

Boris backs calls for London's autonomy

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Boris Johnson backs the report's call for London to get devolved tax powers. @itvlondon

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Report claims London has a population equal to Scotland & Wales combined but far less power. @itvlondon

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Municipal government in London receives 7% of all taxes raised in the city. In New York it's 50%+. @itvlondon

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London's need for control

London's Canary Wharf financial district
London's Canary Wharf financial district Credit: Reuters

Under the proposals London would be given complete control over property taxes, including council tax, stamp duty and business rates. The London Finance Commission report also recommended giving the city the power to introduce new taxes, such as a levy on tourists, and greater freedom to borrow.

Mr Johnson said there was an "acute need for London to be able to better plan and finance the infrastructure needed to prosper and maintain a great quality of life, in the face of a decade of expansion".

Mayor's bid to 'free' London

London Mayor Boris Johnson has backed a report calling for the capital to be given greater financial freedom in order to fund major infrastructure projects.

Mr Johnson said the current way London received funding from central Government was "simply not fit for purpose" and called for tax and spending powers similar to those devolved to Scotland and Wales.