MPs demand Cameron rejects call for capital to keep its taxes

Huddersfield MP Barry Sheerman has written to David Cameron in his role as co-chairman of the all-Party group of Yorkshire MPs to warn that allowing London to retain more of its tax revenue would “further impoverish” the North.

Mr Johnson, London’s Tory Mayor, is calling for the capital to keep more of the tax revenue it generates rather see it redistributed around the country. Campaigning to be re-elected mayor next month, Mr Johnson said London should no longer be a “cash cow” for the regions and added that ministers has been “very receptive” to his proposals.

But a Conservative Party spokesman told the Yorkshire Post, which has been campaigning for a fairer deal for the region, that increasing the amount of tax revenue retained by London was not party policy and a Downing Street spokeswoman said the government was committed to economic growth across the country.

Mr Sheerman’s letter to the Prime Minister challenges the Tory candidate’s pledge to boost his powers in the capital and to keep more of the tax revenue generated in London.

The letter continues: “Commentators today are comparing this statement with the ambitions of Alex Salmond, the first Minister of Scotland. Those of us who represent constituencies in the North of England the Midlands are particularly concerned by these comments.

“Since the abolition of the Regional Development Agencies, we increasingly see ourselves as the squeezed middle between Scotland, with its particularly favourable funding, and London and the South East with its huge concentration of wealth and extensive public and private investment.

“London and the South already dominate our national economy and there will inevitably be a further impoverishment of the regions of our country if an even greater share of tax revenue stays in London.

“I am calling on you as Prime Minister and Leader of your party to repudiate the views of Boris Johnson and to publicly commit yourself to the future growth and prosperity of all regions of our country.”

A spokeswoman for the Prime Minister said: “All tax and spending issues are a matter for the Chancellor (George Osborne) and the Treasury. The Government is committed to promoting growth and prosperity across all of the UK and that is something the Chancellor set out in the recent budget statement.”

She added that Mr Cameron would respond directly to Mr Sheerman’s letter in due course.

A spokesman for the Conservative Party said that Mr Johnson’s tax proposals were part of his mayoral campaign and were in line with a candidate pledging to do their best for the city. But he added that London retaining an increased amount of tax revenue was not Tory Party policy.

Mr Johnson argues that the equivalent of £2,500 for every Londoner goes to other parts of the country rather than being spent on services in the capital.

He said: “London is the powerhouse of the UK economy and it is time to look at formally recognising that and make sure hard-pressed and hard-working Londoners get the benefit of their contribution.”

Mr Johnson plans to set up an inquiry into London’s funding and lobby David Cameron and George Osborne to press the case for keeping a greater share of the capital’s tax revenue.

He said: “I want to make sure that London’s funding sources are put on a secure long-term footing, giving the Mayor and the people of London increased certainty. It will examine whether it is time we should keep more of the taxes Londoners pay in London.”