For all the Chancellor’s talk of Northern Powerhouses, and Labour’s proposal to hand £30bn of Whitehall spending to local authorities, there are those still pressing for more.
Philip Collins, writing in The Times last week, said, “The one big financial reform that central government could offer, which it won’t, is to change the money flows so that more of it is raised locally.
'Where there is money there is power,' he added. 'No Westminster politician is even suggesting anything so bold.'
Until now. My colleagues and I on the Communities and Local Government (CLG) Select Committee are calling for exactly that – the transfer of a range of tax raising powers to local authorities, including business rates, stamp duty, council tax and other smaller taxes and charges, together with greater flexibility to borrow for investment.
The MJ’s own Campaign for Fiscal Freedom has highlighted the overwhelming need for more financial freedoms to help local authorities grow their economies.
England’s cities and counties have repeatedly made a powerful case for decentralisation and fiscal devolution.
My committee’s view is that when Scotland and Wales are being promised ever greater fiscal freedom, it is now up to Ministers and general election manifesto writers to show the same enthusiasm for devolution elsewhere in the UK—by allowing local communities in England to take greater control over how money is raised and spent in their areas.
The people of New York, Frankfurt and Tokyo can be trusted with tax-raising powers. Why not those in London, Greater Manchester or the north-east?
Local areas know best how to stimulate their economies. With a wider range of revenue streams at their disposal, they would be able to make more of their own investment decisions—without having to lobby central Government for a hand-out every time. Local people could reap the rewards through increased tax take, which could then be reinvested in their areas.
Fiscal devolution in England is an idea whose moment has arrived. The time has come for Government to join with local authorities to push this agenda forward.
Clive Betts, chair of the Communities and Local Government (CLG) Select Committee and Labour MP Sheffield South East
The CLG committee report Devolution in England: the case for local government is available via www.parliament.uk/clgcom.
