In an official submission to the Treasury ahead of November’s comprehensive spending review, the London Chamber of Commerce and Industry (LCCI) said that London should not be “overlooked”.
LCCI chief executive Colin Stanbridge said that London “cannot be left behind in the great push for English devolution”.
“We urge government to remember that devolution is not a zero-sum game, London can gain further freedoms at the same time as other cities or regions across the country,” he added. “It is not an ‘either/or’.”
Chancellor George Osborne has long promoted the devolution of decision-making powers to local authorities, a move closely associated with his desire to build a so-called Northern Powerhouse to redress the economic imbalance between the north and south of England.
But Stanbridge said that the government should not forget about promoting growth in London, too.
“We believe a fiscal devolution pilot in London would show the huge potential benefits for all the UK that could be gained from greater power over tax and spend in the capital,” he said.
In its submission, the LCCI asked Osborne to consider giving London more tax retention to “enable sustained and secure investment in key London projects”.
“LCCI believes a pilot scheme where one or more borough areas are permitted to retain a higher share of stamp duty and/or business rates, should be explored,” the submission said.
The submission also called for more money for Crossrail 2, and increased investment in other transport and housing infrastructure projects.
“We need to see real commitment from government to address the fundamental issues within the capital that could affect London’s prospects for growth – investment in housing and key transport projects,” Stanbridge said. “We must address these issues and build on the capital’s success to ensure London continues to be a principle driver of the UK economic recovery.”