Boris Calls For London Tax Revenue Overhaul

The Mayor of London is looking into whether more of the money Londoners generate for the public purse can stay in the capital.

Between £14bn and £19bn of money paid by the capital's taxpayers is distributed to other areas of the UK each year because of the higher proportion of people and businesses in London.

But Boris Johnson said he wants to see a greater share of London's tax revenues invested in the city, and has created a commission to look into the issue.

The London Finance Commission will hear from witnesses including the former Mayor of London, Ken Livingstone.

But its chair, Professor Tony Travers from the London School of Economics, said it is unlikely the Government could deprive other areas of funds.

"At a time when there's less public spending across the UK, I think that would be a very awkward thing to do," he told Sky News.

"But it might be possible to incentivise London - and possibly others cities - so that if they can grow their economies more quickly in the future that they share some of the benefits of the tax growth that came with it."

Mr Johnson said the commission had been created to "shine a spotlight" on a different way of funding London.

"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," he said.

"I firmly believe that Londoners should see more of the growing tax revenues they generate for the public purse staying here in the capital.

"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."