The Government has been urged to wake up from a Brexit paralysis to act on growing sentiments from one of its own ministers to devise a devolution deal for the North that could even allow the region to set its own tax rates.
Northern Powerhouse Minister Jake Berry said Whitehall was considering a proposed new department for the North of England and he advocated the idea of it having its own secretary of state to drive forward transport, education and devolution in the region, using funds raised by its 19 million citizens.
John Grogan MP, who is championing a One Yorkshire devolution deal, welcomed the “radical” proposal. Other northern groups said the “bold” idea could help close the North-South divide because a centralised tax system is failing northern communities.
Mr Berry, in a report in The Sunday Times, said: “With so much economic growth, it is time for the Government to consider a department for the North of England, with its own secretary of state.”
And, he added: “We should not close our minds to the localisation of taxation. A big complaint is that money is being invested more in London and the South than in the North.
“Taxes raised in the North could be spent in the North. And we should not close our minds to varying income tax at a local level.”
He said many northerners voted to leave the European Union over disempowerment and a lack of control of their lives, but they did not want powers to simply transfer to Whitehall.
Mr Berry added: “Each region across the North should have its own bespoke devolution deal. An economic boom here would help drive this country’s economy forward post-Brexit. We need the powers to be able to do that.”
Northern leaders have long called for devolved powers and Mr Grogan, Labour MP for Keighley, said: “I hope this will translate into a willingness by the Government to start some serious talks about One Yorkshire devolution.”
Mr Berry’s proposals represent “the sort of creative and bold thinking we need to rebalance the economy and narrow the North-South divide”, said Henri Murison, director of the Northern Powerhouse Partnership, although, he added: “Whether we prioritise varying income tax or greater wider fiscal devolution is open to debate.”
Mr Murison, who wants widespread devolution in the North to unlock crucial investment, said Brexit had “paralysed” the Government into not acting upon crucial policy recommendations.
He said: “Interventions such as these, building on the proposals we have put forward with the support of our business and civic leaders, are a welcome first step to putting the Northern Powerhouse agenda back on ministerial in-trays.”
Sarah Longlands, director of the IPPR North think-tank, advocated a fresh look at taxation, saying: “We’ve always argued that there’s very little devolution on tax in England compared to other European countries.
“Having a centralised system in theory means you can distribute tax income between rich and poor areas but the current centralised tax regime isn’t working for the North. There isn’t the proper distribution of funding to allow us to function properly and fulfil our economic potential.”
She added: “The challenge now is in the refresh of the Northern Powerhouse strategy. That will be a chance to look at the detail as to how any ideas of how fiscal devolution could work. Let’s open the debate to Northern political, civic and private sector leaders.”
TIME FOR REVISED VISION
IPPR NOrth has challenged the Government to build on Jake Berry’s words about devolution for the North but publishing a long-awaited update of its Northern Powerhouse strategy.
Initially published in November 2016, the original 30-page document set out how the Government would work with local people to address key barriers to productivity in the North.
Whitehall pledged to invest in transport infrastructure to improve connections between and within towns, cities and counties and work to raise education and skills levels, but recent rail issues have caused growing frustration over the Government’s commitment.