What will your powerhouse do for you?

A tiny little warning from someone other than me than devolution may not be all that some are saying it will be.

For example, “There is a lot of talk about regions and cities keeping more of their taxes but if Manchester and Newcastle keep more of their own taxes, then London and the South East will keep more of theirs too. That can only lead to a redistribution of tax away from the poorer regions, unless local taxes are increased to compensate. England tends to get richer the closer you get to London. If these wealthier regions redistribute less of their money, poorer regions will have to make up the shortfall by taxing their residents and businesses at a higher rate.”

If you mention the prospects of more business rates to investors they say ‘ then we will not be investing in your city or region’. When I got those running large investment funds to say this at a recent localism and devolution conferance you could hear the sound of the local authority leaders’ jaws hitting the floor – I would have thought that their senior staff would have at least already mentioned this possibility to them.

Flip Chart Fairy Tales

The Northern Powerhouse made it into the Queen’s Speech, giving George Osborne a good laugh when Her Majesty mentioned it. The government is pushing ahead with its plans to devolve extensive powers to city regions, starting with Manchester. Devolution to local government, an idea which was loathed by the Thatcher and Major governments, is suddenly the height of fashion and not just in Conservative circles.

The idea gained momentum after the referendum on Scottish independence. It got mixed up with the row about Scottish votes on English laws and became, all at once, an answer to the West Lothian question, a way of stimulating the growth of urban centres outside London, rebalancing the economy, allowing more tax revenues to be raised locally and making services more responsive to local needs. Or something like that. People can project all sorts of things onto what at the moment is still a blank page.

A lot of people seem…

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3 Responses to What will your powerhouse do for you?

  1. David Cannon says:

    You’ve identified a dilemma; ‘democracy’ demands increased localism but ‘fairness’ rejects the resultant post-code lottery.

  2. stevenboxall says:

    I think a big part of the problem is that we have had, for too long, politicians who are not concerned about those who haven’t voted for them. Too many seem to think that democracy is having an election every how and then and that who ever gets ‘in’ can then do what they like to who ever they like.

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