Member Article

Leeds and Sheffield backing London mayor Boris Johnson's tax devolution

The Core Cities Cabinet which represents cities including Leeds and Sheffield, has added its voice to that of Mayor of London, Boris Johnson and Chair of London Councils’, Mayor Jules Pipe in calling for greater financial freedoms, starting with property taxes.

The Chancellor of the Exchequer, George Osborne received a letter from the Core Cities Cabinet calling for the devolution of property taxes to the UK’s big cities.

Although this will more than double the taxes cities retain locally, it is only a rise from 5% to 12% and still leaves the UK trailing behind the international competition.

Core Cities’ urban areas already deliver 27% of the English economy, more than London and are home to 16 million, yet they underperform by international standards.

This is because, currently, cities only retain about 5% of the total tax base raised in them which is damaging their economic potential.

According to the OECD, the devolution of property taxes would go some way to rectifying this issue in the UK by increasing the amount of tax retained in our cities to 12%, including council tax, and giving them the freedom to grow and compete globally.

Independent forecasts demonstrate this could mean an additional £222 billion and 1.3 million jobs for the country by 2030.

Specifically, the money generated from the devolution of property taxes would be used on projects that benefit cities such as improved transport networks and upgrading business infrastructure. In September 2013, London and the Core Cities officially launched the ‘City Centred’ campaign which calls for the devolution of financial powers to our cities, with property taxes being the primary focus.

Councillor Keith Wakefield, Leader of Leeds City Council, said: “If we are to secure sustainable long-term growth as a nation, we must rebalance our economy. To do that, cities like ours need the power, freedom and resources to deliver on key regional priorities. Retaining a greater proportion of locally generated revenue could enable us to invest in the infrastructure projects we know will make the biggest difference to people living in our area – improving links to employment opportunities and opening up new markets for businesses. “The evidence already proves that where we are given the powers and resources to act locally, we have the potential to deliver vastly improved outcomes. Most recently, local projects to tackle youth employment through the Devolved Youth Contract have consistently outperformed national schemes such as the Government’s Work Programme. We need the Government to now come good on its promises of greater devolution. This letter to the Chancellor sets out one of a number of ways we can continue that process.”

This was posted in Bdaily's Members' News section by Clare Burnett .