{"id":472579,"date":"2025-10-04T02:36:13","date_gmt":"2025-10-04T02:36:13","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/472579\/"},"modified":"2025-10-04T02:36:13","modified_gmt":"2025-10-04T02:36:13","slug":"mayor-needs-more-fiscal-powers-to-avoid-ugly-decisions-on-taxing-londoners","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/472579\/","title":{"rendered":"Mayor needs more fiscal powers to avoid \u201cugly\u201d decisions on taxing Londoners"},"content":{"rendered":"

Failing to give the Mayor of London more powers to raise revenue from tourism will lead to \u201cugly\u201d tax decisions being taken from City Hall to fund the capital\u2019s infrastructure, ministers have been warned.<\/p>\n

The current Mayoral precept \u2013 the council tax bill that goes to funding London-wide services controlled by City Hall \u2013 stands at \u00a3490.38 for a Band D property. It represents one of the only ways the Mayor can raise money to fund projects and improve existing services in the capital, however.<\/p>\n

With ambitions such as the DLR and Bakerloo Line<\/a> extension needing a funding boost to become reality, politicians at all levels in London have raised the need for the capital to be able to fund itself rather than relying on Treasury funds.<\/p>\n

Ministers have already been warned that London could lose out in the Fairer Funding Review, which analyses the ways that local authorities are handed cash settlements, from next April.<\/p>\n

The Government has repeatedly been pressured to allow City Hall to impose a tourist tax which would see visitors charged a fee for staying overnight in London. Such a scheme already exists in New York and Paris, but ministers say there are no plans to introduce one in England \u2013 even though it is backed by Sir Sadiq Khan and many London boroughs.<\/p>\n

\"MayorCentral London Forward Event on inequality in London at Labour Party Conference 2025 Credit: Central London Forward<\/p>\n

During a fringe event at this year\u2019s Labour Party Conference, ministers were accused of treating London \u201clike a pinata\u201d and that transferring money away from the capital was a \u201clazy\u201d option for politicians.<\/p>\n

Cllr Adam Hug, Leader of Westminster City Council, said: \u201cVastly more money leaves London to pay for services and infrastructure in the rest of the country than is reinvested into London. There is occasionally some slightly performative kicking in London when the reality is, come actually visit, not just the centre of town \u2013 come to visit our communities and see the real challenges that we face.<\/p>\n

\u201cGive us the flexibility and give us a plan, because when we were preparing for the future Fairer Funding Review, we were not expecting anything on the scale that is currently being proposed, so it\u2019s about having a fair deal.\u201d<\/p>\n

Allowing City Hall to raise revenue independently through a tourism levy would both be fairer to residents and allow London to fund its own infrastructure ambitions, he said.<\/p>\n

\u201cThe tourist economy is being subsidised by local taxpayers and at the moment we\u2019re not getting anything to show for that,\u201d Cllr Hug added. \u201cBoroughs and the GLA provide services that support the visitor economy and it\u2019s got to be a fair partnership between both levels particularly given the pressures on local government financing like that. Everywhere else in world seems to have one of those.\u201d<\/p>\n

Labour MP Dawn Butler added: \u201cEverybody\u2019s in favour of a tourist tax. Politically, nobody\u2019s against it because we\u2019re not going to be able to beat them.<\/p>\n

\u201cWe\u2019re going to win that debate and that argument and I think that we\u2019re gonna have a tourist sooner rather than later.\u201d<\/p>\n

Joe Dromey, General Secretary of the Fabian Society think tank, told the event, hosted by Central London Forward: \u201cLondon<\/a> is infantilised compared to other global cities \u2013 we retain just four per cent of tax locally, so our fiscal firepower to address local challenges and invest is absolutely tiny.<\/p>\n

\u201cWe need more powers \u2013 and particularly more powers to capture some of the wealth that we have in London, so that might be an overnight levy, or it might be flexibility over council tax. That can allow us to do two things. One, to redistribute within London, because there is nowhere in the UK where there\u2019s a stronger case to redistribute than in the capital. But two is to invest in London.<\/p>\n

\u201cIf the Government doesn\u2019t want to invest in London, they should let London do it. And in order to do that, we need to be able to raise revenue to service that and so we need fiscal devolution.\u201d<\/p>\n

Without a tourism levy, the Mayor has limited options, according to Mr Dromey. He told the Local Democracy Reporting Service (LDRS): \u201cThe Mayor does have some powers to raise revenues, but they are largely based on council tax, they\u2019re pretty ugly powers.<\/p>\n

\u201cSo the mayoral precept is referred to as a regrettable necessity, because it just puts extra money on top of council tax, which is highly recessive in itself, because they\u2019re the richest Londoners are paying the same proportion of their income as the poorest.<\/p>\n

\u201cSo that puts him in the sort of unenviable choice of having to sort of not have enough resources to tackle London\u2019s problems or having to tax poorer Londoners more.\u201d<\/p>\n

A Ministry of Housing, Communities and Local Government spokesperson said: \u201cThere are currently no plans to introduce a tourism tax in England, but we are open to hearing views from local leaders on this. Places including London can already choose to introduce a levy on overnight stays through the Accommodation Business Improvement District model.\u201d<\/p>\n

\ud83d\udce9
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\n \"Mayor<\/p>\n

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