Clive Betts: Le Tour makes case for giving power to the regions

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READERS of this paper won’t need me to tell them that the Grand Départ was a stunning success for Yorkshire. The glorious weather and amazing crowds helping to make it the perfect weekend.

Crucial to the success of Le Tour in Yorkshire was its first-class organisation. Councils, businesses and organisations from Sheffield, York, Leeds and all parts of the county worked together to host the event, and its success is a massive tribute to their ability to get things done.

But with the riders having departed, and the images of Chris Froome powering up Cote de Jenkin Road now a memory, what should happen to ensure that Le Tour’s legacy is sustained economic growth in Yorkshire?

Yorkshire has an economy of more than £90bn and five million people, bigger than many EU states. The Government should unlock this potential by allowing authorities in Yorkshire to take far greater control over how money is raised and spent in their areas.

My colleagues and I on the Communities and Local Government (CLG) Select Committee publish a report today calling for the Government to push ahead with fiscal devolution and transfer 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.

As Councillor Peter Box, leader of Wakefield Council, said at the weekend, with the Government eagerly handing greater economic freedom to Scotland and Wales, it is now time for them 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.

When the citizens of New York, Frankfurt and Tokyo can be trusted with tax-raising powers, why not the people of Sheffield, Leeds, Greater Manchester or the North East? Local areas know best how to stimulate their economies and with a wider range of revenue streams at their disposal, they would be able to invest in infrastructure and projects that mattered locally. No longer would authorities in Yorkshire have to rely on or wait for hand-outs from central Government.

Devolving fiscal powers could create a virtuous circle. Local people would reap the rewards through increased tax take, and this could be reinvested in their areas. In the same vein, if politicians in Yorkshire failed to deliver, they wouldn’t be able to hide behind Whitehall and Eric Pickles.

In fairness, local authorities have in recent years gained some responsibilities for spending through City Deals and limited control over business rates. The announcement of growth deals worth £320m for Sheffield City Region and £1bn for the Leeds City Region is welcome news indeed, but we need to go further. This must be matched by genuine local control of tax-raising powers and local decision-making on spending – otherwise local government will remain just an agency of central government, unable to respond effectively to the needs of local people.

Leeds, Sheffield, City of York and Wakefield Councils all contributed to our inquiry. Yorkshire’s local authorities are ready and willing to take on new fiscal powers as they seek to better serve the communities to which they answer.

Fiscal devolution in England is an idea whose moment has arrived. The starting point was the London Finance Commission (LFC) 2013 report, backed by the support of the eight Core Cities. Now the Chancellor is arguing forcefully about the need to decentralise power to boost economic growth, while Lord Adonis’s review makes a powerful case for the devolution of more powers to local government.

If the Government can now push ahead to release groups of authorities in England – centred on large city and county regions – from the fiscal grip of Whitehall, then this could lead to a revival in local democracy and bring the prize of more balanced growth across the country.

My colleagues and I recognise there are risks as well as rewards in transferring these powers to local areas. But local government has a good track record of competence and prudence. And we suggest any devolution should take place only if it is based on clear, costed plans designed to stimulate local growth.

The huge crowds thronging the towns, cities and hillsides of Yorkshire this weekend were treated to a demonstration of world-class cycling – and world-class event management. If Yorkshire had more financial power at its disposal, it could regularly host such showpieces – and create more of its own.

The Grand Départ was the beginning of this year’s Tour. But it could be the beginning of much more – growth based on money raised, and invested, in Yorkshire.

Clive Betts is chairmman of the Communities and Local Government (CLG) Select Committee and Labour MP for Sheffield South East. The CLG Committee report “Devolution in England: the case for local government” is available