George Osborne urges Boris Johnson to give big councils more tax-raising powers

Former Chancellor George Osborne has advised Boris Johnson to double down on devolution if he wants to deliver on the Government’s levelling up agenda.

In a wide-ranging interview with the Conservative Home website, Mr Osborne blamed Theresa May for his Northern Powerhouse concept “hitting the buffers” and also criticised the recent downgrading of powers held by Transport for the North.

Mr Osborne said metro mayors should be handed more responsibilities while local authorities should be given stronger business-rate raising powers.

“I think you could go quite a lot further,” he said.

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Former Chancellor George Osborne has said he is 'optimistic' about the future of levelling up.Former Chancellor George Osborne has said he is 'optimistic' about the future of levelling up.
Former Chancellor George Osborne has said he is 'optimistic' about the future of levelling up.

“I think you could give local authorities, I wouldn’t do it at an individual council level, I think it has to be at a metro level or a big county level, but I don’t see why you couldn’t give them their own proper business-rate raising powers.

“It’s a choice an area would make, you could either cut your local taxes to encourage business, or you could raise your taxes and spend on infrastructure.”

He added: “I think it’s a great shame that Transport for the North has been downgraded – I would upgrade it with more powers, make it more like Transport for London.

“I would give the metro mayors more responsibility. For example, we devolved the NHS in Manchester, which was a really bold thing to do.”

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Mr Osborne said he was optimistic about the forthcoming Levelling Up White Paper, because of the involvement of his former colleagues Michael Gove and Neil O’Brien in writing it.

“Every time you’re confronted with something which is, you know, ‘Oooh, should we trim a little, this is a little bit too radical, the Treasury’s got a problem with this,’ I would go for the reverse.

“Whatever you’re doing in terms of devolution, double it. Whatever you’re doing in terms of local tax-raising powers, double it. Whatever you’re doing in terms of devolving the NHS, double or triple it.

“That is why we have ministers, and we have political leadership in government: to push the system where it doesn’t want to go. For the Conservatives, this is really the once in a generation opportunity to show the whole country it can deliver.

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“And if you just limit yourself to a couple of town-centre funds, which by the way the Cameron Government had, the Blair Government had, they’re not new, that’s not what’s needed.

“What’s needed is proper economic theory about creating big economic clusters in the North, bringing the cities closer together, connecting them to the towns that surround them, connecting them with real transport links that work, and attracting business, which cannot be done by the public sector alone, which is another classic mistake.”

While offering praise to Boris Johnson for putting ‘levelling up’ at the top of his political agenda, Mr Osborne said there had been mistakes made with the recent Integrated Rail Plan.

“I wish he had stuck with, and I think he will end up recommitting to, elements like the High Speed line in Yorkshire, the Eastern Leg, and the Trans-Pennine route, because those are long-term infrastructure projects which you don’t want to throw away and start again on some other project that’ll never get off the ground.

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“So I’m quite optimistic about it all. What it needs is proper intellectual underpinning. If you think it’s all just about planting some civic flowerbeds in northern towns then the Tories will be out on their ear.”

Mr Osborne said the Northern Powerhouse concept he developed as Chancellor has now essentially been picked back up again by Mr Johnson.

“We got the plans in place for the railways, we created organisations like Transport for the North, so there was enormous progress.

“We then hit unfortunately the buffers of the Theresa May Government. She was not interested in it and basically ditched it.

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“And then what excites me genuinely is that the Boris Johnson Government – which calls it levelling up, which is a good slogan – had doubled down on something I thought was very important.

“So all the political stars are aligned. Of course the really hard thing in government is then actually getting the job done.”

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