Would 'fiscal freedoms' for London help businesses?

Negotiating cash flow and expenses is one of the most basic problems for business buyers and existing owners. Something as simple as an increase in business rates can push a company into administration if it goes against fluctuations in the local economic backdrop. So would more local control over business rates and taxes offer any kind of solution?

London Mayor Boris Johnson seems to think that it would. Johnson is calling for London to have the same “fiscal freedoms” enjoyed by the Welsh and Scottish governments. Speaking after the publication of the London Finance Commission report, entitled Raising The Capital, the Mayor said: “Londoners will increasingly question why London government cannot enjoy similar fiscal freedoms as those afforded to the devolved governments in Scotland and Wales.”

He added that stamp duty, business rates and council tax should be devolved to local administration in order to allow the capital to make “self-determined” investment in its infrastructure and boost economic growth.

The report itself concurred: “Such reforms would also increase London government’s accountability to residents and businesses. Change would be achieved without affecting the financial settlements of other parts of the country.”

Acquisition experts are aware that different cities and regions can be more suitable for certain types of business. London, for example, is typically associated with finance and media companies. Allowing the Mayor the power to tweak taxes and other fiscal issues according to the local region might make business conditions slightly more favourable for those looking to buy in the capital, but doing so won't negate the need for due diligence and careful acquisition planning.

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