Boris Johnson's power grab on stamp duty revenue

Boris Johnson today demanded that George Osborne gives him full control of billions of pounds raised by stamp duty — saying “it is only fair” for London.

Treasury sources today said they were “happy to look” at Mr Johnson’s audacious power grab which would see the Government handing back the proceeds of the property tax, which raised £1.3 billion in the capital last year.

But the Mayor was warned by Tory MP Mark Field today that his bid for control of the tax is “never going to happen”.

Mr Johnson’s latest bid for more powers for City Hall comes just days before the start of the Conservatives’ annual conference. Senior Tories are concerned that Mr Johnson will over-shadow the Prime Minister when he makes a series of appearances at the annual gathering in Birmingham next week.

City Hall said the money would be used to fund housebuilding and regeneration projects across London. In a letter to Mr Osborne the Mayor said that stamp duty has become a “London tax” because Londoners face higher tax rates than elsewhere in the country.

He wrote: “It is only fair that London benefits more directly from the receipts generated. It would enable Londoners on modest incomes — who are absolutely crucial to London’s economic growth — to see a tax being allocated to support themselves and their families into new rented and home ownership opportunities, and to boost home building.”

He said his plans would be in line with the transfer of revenues from the tax to the devolved government in Scotland from 2015.

Mr Johnson has called on the Chancellor to introduce the change in his autumn statement.

About a third of the total stamp duty raised in England and Wales is currently generated in the capital. But MP for Cities of London and Westminster Mr Field today said: “It’s another intriguing intervention from the Mayor but Boris must know there is absolutely zero chance of the Government ring-fencing money in this way.

“It’s never going to happen. This is Boris making the case for London. He makes a valid point about how much London contributes to the rest of the UK economy. Boris will always want to try and get a better deal for London.”

A Treasury source said: “We are always happy to look at Boris’ ideas and have helped him deliver a good deal for London already”.