Now businesses want more devolution across UK

Business chiefs have called for greater devolution to UK cities and regions as the next government focuses on Brexit negotiations.

The North West Business Leadership Team, London First and Centre for Cities, in a joint letter to the political parties, have argued that greater control over the revenues generated by locally raised taxes, such as property and council tax, would give local institutions greater incentive to drive investment and growth, and the means to fund it.

The letter from the organisations contends that at a time when central government is focused on Brexit, devolved institutions should be given powers and resources to deliver economic growth.

This includes the idea that retaining local property tax revenue, for example, would give a strong incentive to support new development and the resources to manage the public costs.

Jasmine Whitbread, chief executive of London First, said: “The new government will be rightly focused on Brexit through the next parliament, but we can’t afford to take our eye off the ball when it comes to the economy.

“Speeding up devolution in England will help local government prioritise investments that will drive growth across the country – the so-called “devolution dividend” – and get the UK into the best possible shape ahead of 2019.

“In London, less than 10% of our income is directly managed by those people elected locally and closest to what our capital needs. To keep the economy growing, central government will have to loosen its grip on the purse strings.”

They also point out that more devolution would allow for more certainty of income streams which would provide a foundation for prudential borrowing to deliver local investment.

Juergen Maier, chair of the North West Business Leadership Team and CEO of Siemens UK, said: “The election of the new City Region Mayors is an opportunity for us to work much more closely together to develop the strong regions we need if we are to effectively deliver on the promises of the Government’s forthcoming Industrial Strategy.

“This matters not just to the North but to the future success of the entire UK economy.”

Generally, the organisations believe that economic decision-making would improve in these circumstances and would bring with it production and innovation gains.

North West Business Leadership Team and London First both represent the businesses which have commitments in their particular regions.

While Centre for Cities is an independent think-tank dedicated to improving the economies of UK cities.

Andrew Carter, chief executive of Centre for Cities, said: “In recent years we’ve seen important steps towards reversing decades of centralisation in the British political system, and the next Government should build on this progress by extending devolution across the country.

“That means working with the new metro mayors to make the most of the opportunities they face, and agreeing more devolution deals with other big cities like Leeds and Newcastle.

“It also means handing places more fiscal powers, to give them real incentives and measures to grow their local economies.”