Mayor seeks new tax powers

A new "Robin Hood" tax could be imposed on Londoners under plans by Ken Livingstone to gain extra powers from the Government.

The Evening Standard has learned that the Mayor wants to levy a capital-wide local income tax to redistribute cash from the rich to the poor.

His plans emerged after Labour's manifesto pledged yesterday to look at new powers for Mr Livingstone and the Greater London Authority (GLA).

Under the scheme - which the Tories today described as "frightening" - the council tax precept raised by the Mayor would be replaced by a charge based on ability to pay.

The wealthy would face higher tax bills while those on lower incomes would benefit from savings.

Mr Livingstone hopes to use Tony Blair's offer of new powers in the next Parliament to get control over housing, planning and waste management.

But he also now wants to reform the current council tax system so that a new Londonwide tax can be levied.

The precept, a top-up to council tax bills to pay for fire, police and other spending by the GLA, has soared since Mr Livingstone came to power.

His plan would see the GLA administer the tax on behalf of London's 32 councils.

Deputy Prime Minister John Prescott and Local Government Minister Nick Raynsford are overseeing the review of council tax

Although they have ruled out a local income tax, a means of reflecting ability to pay is being seriously considered and Mr Prescott is keen to give regions real powers.

However, ministers are only likely to approve the idea if it would result in a tax cut for the majority of people.

A local income tax would mean 50 per cent of people would be better off than under council tax, 25 per cent unchanged and 25 per cent - the richest - worse off.

The proposals, which will inevitably be dubbed a "Ken tax", will feed into the Government's review of council tax which is due to report later this year. Mr Livingstone said that ministers had not ruled out having a "local income tax element" as part of its review of council tax being conducted by Sir Michael Lyons.

"I'll be making a submission to the inquiry calling for greater revenue-raising powers for local and regional government," Mr Livingstone said.

But Bob Neill, Leader London Assembly Conservatives said: "The idea of Ken Livingstone having income taxraising powers is frightening.

"His record on spending is appalling."