Treasury ‘blocks English devolution’

The Mayor of London told MPs last night that England has obtained “not a sausage” from the ongoing drive to devolve powers away from Whitehall when compared to Scotland and Wales, adding that fiscal devolution was a reform “whose time has come”.

Mr Johnson told The Yorkshire Post in December that he believed there was a strong case for devolving five key “property taxes” to a local level in the largest cities across the country – including in Leeds and Sheffield.

He wants council tax, capital gains tax, business rates, the annual tax on developed dwellings, and stamp duty to all be raised, levied and kept locally to give the largest local authorities more control over tax and spend.

Appearing before the Commons local government select committee yesterday, Mr Johnson made clear he blames the Treasury for England remaining one of the most centralised countries in the West.

“If you ask me why there is such an obsession with centralisation I would point to the hand of the Treasury, and their obsession with keeping a firm grip on public expenditure – without recognising that if you devolve these powers to local government you actually bear down on expenditure much more,” he said.

Mr Johnson complained that for most local authorities, Government funding is “stop-start”, with local leaders being forced to argue for every single investment project on a case-by-case basis.

“We need the ability to plan ahead, to think long-term,” he said. “It would also give greater scope to borrow, and therefore to do more. And it would give those authorities a strong incentive to go for policies that maximise the growth.

“This is a reform whose time has come. The difference that it would make not just to London but to all the core cities. They would have – in circumstances where their economies have got massive capacity for growth –- stability and certainty of funding. I think that is very, very important.”

Council leaders across Yorkshire have long been calling for more powers from Whitehall to invest in local projects.

Mr Johnson said he saw “a happy harmony of interests” between London and other large cities such as Leeds and Sheffield, and contrasted their devolution battle with the success which Scotland and Wales have enjoyed in winning new powers.

“Everyone can see what is happening in Scotland and Wales,” Mr Johnson said. “What has England got out of devolution? Not a sausage.

“It’s time to do something, and I think it’s something that appeals naturally to loads of people around the country.”

The appearance of Mr Johnson – widely tipped as a future Conservative leader – before the select committee followed reports that he had clashed with George Osborne over claims that the Chancellor sought to persuade him stand again as an MP in next year’s election.

The Mayor was said to have reacted angrily to the offer, seeing it as an attempt to bind him into the result and make it difficult for him to challenge David Cameron for the leadership if the Tories are defeated.

But speaking earlier in the day, Mr Johnson said: “I haven’t had a conversation of any such kind with George.

“George and I have a very, very good working relationship and indeed old, old friendship.

“What we both want to do is get David Cameron re-elected. That is the project about which we are united.”