Give mayors power to slash business rates, argues Tees Valley's Ben Houchen

Writing for the ConservativeHome website, he said that devolving control of business rates to a local level "could be as revolutionary as Margaret Thatcher's 'big bang' reforms to the City of London in 1986".

Mr Houchen said: "If I, as Mayor, had control of business rates, I’d slash business rates across the board, with a special focus on capital and energy intensive businesses which are a huge strategic priority for Teesside, Darlington, and Hartlepool.

"Overnight this would stimulate massive private sector investment in strategic industries that are critical for UK PLC. This in turn would lead to an explosion of job creation, put more money in people’s pockets, and restore local pride.

"Different areas could take different approaches – for example, London could focus on its world-class financial services sector. The result would be a spectacular renaissance and an economic boom not seen for generations."

Mr Houchen added: "Getting competition into local government would not only get some much-needed downward pressure applied to tax on job-creating British businesses – it would stimulate over-cautious local authorities to shift from micro-management of decline to big thinking about success – something far too few councils do.

"Cleverly deployed, it could be a crucial tool in incentivising a net zero recovery, putting the UK at the global forefront of net zero technology, securing first-mover advantages in jobs and technology, and showing that green goals are better achieved through the market than through socialist levies."

Mr Houchen said cuts to corporation tax have shown how reducing levies on businesses can help the economy.

"Treasury officials, lacking confidence in the free market and British enterprise, fret that fiscal responsibility requires regulations and taxes – especially business rates – to stay equally high in all fields and across the country.

"But the example of Corporation Tax is instructive. Gordon Brown left behind a Corporation Tax rate of 28 per cent.

"Despite howls from the opposition parties, Conservative chancellors have cut this down to 19 per cent.

"That led to the creation of huge numbers of new jobs and new businesses, whilst the actual tax yield to the Treasury from Corporation Tax grew. Singapore has pursued the same strategy with much more conviction, and their ten per cent Corporation Tax cuts and other business incentives have been rewarded with six per cent growth. If we’re to overcome the cost of living crisis, this is the kind of growth we too should be reaching for.

"We need every part of Britain to be firing on all cylinders if we are to win the global competition for investment. Instead, Treasury fixation on the short-term is keeping a tight central rein on growth."

Read more:

Business rates reform must go further and faster - Beckie Hart.

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