Baroness Janke
Main Page: Baroness Janke (Liberal Democrat - Life peer)Cities and Local Government Devolution Bill [HL]
Baroness Janke Excerpts
Baroness Janke
“( ) The Secretary of State may by order make provision for conferring on a combined authority, upon the request of that authority in relation to its area, the full retention of business rates, business rate supplements, council tax, stamp duty land tax, annual tax on enveloped dwellings, capital gains property disposal tax, and multi-year finance settlements.”
Baroness Janke (LD)
My Lords, I wish to speak to Amendments 43 and 44. I know that the Bill is important to local government. Coming as I do from the city, I urge everyone to think of the world-class cities we have in our country and how we can make them even more competitive internationally.
The raising of funding locally is important. The developments in the Greater Manchester Combined Authority and the deal that has been agreed are a good step forward. I hope the Bill is the start of a journey in building capacity in our city and county regions, in order to have local economies that flourish due to the their leadership. I have looked at some of the written material on this subject, which the London Finance Commission took evidence on. One marker it looked at is how much money central governments give to capital cities, particularly London. One report tells us that Madrid gets 37%, New York 30.9%, Berlin 20.5% and Tokyo 7.7%, but that 73% of London’s budget comes from central government, as the Mayor of London made clear. I think Boris Johnson said that in this country we are comparatively “fiscally infantilised”—his quotes are fairly unique.
That shows the gap between the self-sustaining nature of other international cities, particularly capital cities, and our own. The Minister has been the leader of a council and I am sure she has had the same experience as many of us: when we meet the mayors of our twin cities or attend international gatherings, the feeling from that contingent is one of shock at the very few powers that leaders and mayors in this country have in comparison with others. We must look at this issue. When we discussed the local government bond last week, it did not receive as welcoming a response as we had all hoped. I recognise that the Government feel that they must be cautious and satisfied with the capacity of local government to take on these greater responsibilities, but the Bill’s vision needs to include something on what the future may be and what is desirable. There is plenty of evidence. The City Growth Commission fully recognises in its report that not all cities, counties and regions are ready for full powers. Indeed, many are not as ready as the Greater Manchester Combined Authority is. Nevertheless, we must be ambitious and aspire to giving our regions and cities greater powers.
If we look at what is happening in Scotland and Wales, it is understandable that many people in England, particularly in our cities, feel that powers are being given away which are not available to them. The national economy could benefit from more financially independent cities leading their own economies. I urge the Government to give some thought to including something in the Bill—even if it is not as explicit as the amendments—to show what the scope, potential and ambition could be. I hope to hear some more encouraging remarks from the Minister.
I am perhaps not as hopeful about that after previous days, but I hope we can all see the potential of fiscal independence for some of the great cities and counties of this country, and that we will see as a result improved local accountability, and improved ownership and participation from the people living in those regions. Having finance and powers meted out from the centre is not a good recipe for local participation or for pride in one’s area. The leaders and mayors of those international cities will have ample evidence of why we need to set some of our cities and regions free. I beg to move.
Baroness Williams of Trafford
My Lords, the noble Lord gives a theoretical example, which I am not in any position to stand at the Dispatch Box and confirm. I know I have reiterated this during the course of the Bill, but it really would be for a group of local authorities to prove that whatever proposal was put forward would result in growth and be fiscally neutral.
Baroness Janke
I thank the Minister for her response. I am perhaps not as discouraged as I thought I might be. However, I hope that the complexity of the tax system will not be a barrier to giving local powers and local accountability to achieving local projects. Transport is a particular issue in this country. To give a practical example, we in Bristol had to wait something like 15 years to be told that we were not going to get a tram whereas our twin city of Bordeaux not only conceived of its tram but built it and had it in operation within a fraction of that time.
I understand from the Minister’s remarks that should a combined authority wish to make proposals that might include a tourist tax or differentiated VAT or some kinds of local tax, these would all be considered. At the moment, while there is a central allocation determined by government, there is not a great deal of incentive for those who are more entrepreneurially minded in local authorities to create revenue streams to pay for important projects. That is what I have understood. Equally, the equalisation element would need to be looked at. We have very different circumstances in different parts of the country but, again, it should not be a barrier, and we need only look at our international competitors to know that this is the case.
I hope that we can pursue this a little further and that we might revisit it on Report. In that case, I beg leave to withdraw the amendment.