Call for tax rebate for Londoners

Ivan Massow said: "Londoners already pay enough taxes"

Millionaire businessman Ivan Massow has threatened to set up a new party to stand in next year's London mayoral elections unless the Chancellor gives the city an annual tax rebate of more than £7bn.

Mr Massow, who famously defected to Labour after accusing the Tories of dithering over gay rights, is in charge of a new campaign group called Change London.

He believes people living in London are subsidising poorer parts of the UK.

Change London wants more of the £62bn Londoners pay in taxes every year to be spent improving the city's infrastructure instead of being spent elsewhere.

Currently, the group claims, people living in London pay £20bn a year more in tax than they get back in public spending.

When so much needs to be done in our city it is madness that Londoners should fund the rest of the country

Ivan Massow

Mr Massow said if Gordon Brown does not indicate in the autumn statement that he will increase this spending then the group will consider putting candidates forward for the London Assembly and mayoral elections in 2004.

Massow said he has been promised £2.5m to help set up a new political party.

"The current regional funding arrangement is grossly unfair to Londoners," Mr Massow said.

"When so much needs to be done in our city it is madness that Londoners should fund the rest of the country by as much as £4,000 per year for each adult living in London.

"It is now estimated that each year London contributes at least £20bn in net taxes to the rest of the country and some analysts believe that the total figure that Londoners contribute to the rest of the nation in taxes is possibly in excess of £35bn each year."

He added that their proposal "would still leave London 'exporting' at least £12bn each year".

Mr Massow also said there should be no increases in taxes to fund the restoration of the city's decaying infrastructure, for upgrading the Tube or for the Olympic bid as "Londoners already pay enough taxes".

The group has sent letters to London MPs and Ken Livingstone, the Mayor of London, asking for their support.