Mayor calls for Government to ‘reboot devolution agenda’ after Brexit

07 November 2018
  • Greater devolution essential to protect jobs, wealth and prosperity
  • Sadiq says Ministers are paralysed by Brexit, remote, out of touch and failing to provide answers
  • Council tax and business rates should be reformed with London leading on creating its own fairer system
  • Warning that ‘bonds which bind Britain together could snap’ without proper Government strategy to narrow regional disparities


The Mayor of London, Sadiq Khan, will today call on the Government to ‘reboot the devolution agenda’ – by giving the capital and other cities across the UK more powers and the tools they need to protect them from the aftermath of Brexit.


In a major speech, Sadiq will accuse Ministers of losing touch and failing to provide the answers to today’s pressing challenges. He will argue that cities and regional governments are best placed to tackle major issues and ensure that economic growth and new opportunities are more equally shared across society.


The Mayor will make a fresh call for London to be given more powers over skills, commuter rail lines and helping more Londoners into great careers.


Speaking at the London Conference, hosted by the Centre for London, the Mayor will demand wholescale reform for council tax and business rates – with London leading on creating its own fairer system.


Sadiq will warn that without a proper Government strategy, focused on narrowing gaps between the richest and poorest parts of the country, the social bonds that bind Britain together could snap.  


London has a similar population to Wales, Scotland and Northern Ireland combined, but has far less control over how its economy and public services are run.


London is also unique amongst its global rivals in its reliance on national government for powers and funding. In London, only six per cent of the tax paid by Londoners and businesses is retained locally. This compares to 50 per cent in New York and 70 per cent in Tokyo.


He will also highlight other cities such as Seattle, Copenhagen, and New York as examples of what can be achieved when power is devolved to the regional level.


In a wide-ranging speech, Sadiq focuses on the London Mayoralty turning 18 years old, looking back at the challenges it was set up to address, what has been achieved, and what its role should be in future.


He will also argue that cities and regions are better placed to help heal the divisions within our societies by creating opportunities to bring people from different backgrounds, faiths and races together.


On the need for more devolution and reform of taxation, the Mayor is expected to say:


“I’m calling on the Prime Minister to reboot the devolution agenda. And to hand over more control. More control over funding for housing and public services. Over skills. Over helping more Londoners into great careers.


“And over taxes. Because, we’d create a much better system. Take council tax and business rates. Both are totally broken taxes doing real damage to London, but the Government shows no sign of reforming them.


“So I say to the Prime Minister and the Chancellor: hand these over London Councils and City Hall. We’ll reform them and create a much fairer system.


“It has become clear that our power and resources need to be vastly expanded.


“There’s a lot we can do, but I get frustrated when we’re held back over and over again.    


“In order to unlock the full potential of our city to tackle the huge challenges we face, we must be entrusted with greater autonomy.” 


On the role of cities as opposed to the broken national model, the Mayor is expected to say:


“There’s so much potential, just waiting to be unleashed.  But we can’t do it without being unshackled – without the necessary powers and resources.  


“It is cities that are leading the way – coming up with the innovative solutions to the big challenges we face. 


“And this dynamism stands in stark contrast to the increasingly dysfunctional character of national governments, which too often seem gripped by paralysis.


“Take our own government as an example. It’s lost touch – and therefore the trust – of ordinary people. It’s failing to provide the answers to today’s pressing challenges.


“Whitehall might be based in London, but it’s as politically remote to the residents of Sutton, Southwark and Stanmore as it is to those in Stirling, Swansea and Stoke. 


“Our cities are the future. Not this broken national model. We’re the ones who can lead the charge when it comes to solving the problems of our times.”


On how localism can be the answer to growing nationalism can heal some of the divisions within our society, the Mayor is expected to say:


“The politics of blame and hatred has seeped far too deep into our national debates over recent years – with extremists prepared to exploit the lack of opportunity and sense of insecurity in some communities. 


“In our cities, we can do more to bring people together to promote social integration. 


“And by showing that we can get things done locally, we can create more active citizens and restore some civic pride – letting people realise, once again, that they too have a stake in their community.


“Because – ultimately – it will be localism and devolution – rather than nationalism and greater centralisation – that will tackle the negative consequences of globalisation.“


On the need for devolution to other cities, the Mayor is expected to say:


“I also want to see more money and power flowing out to the regions – especially the core cities.


“Successive governments – of all political hues – have failed to narrow the gaps between rich and poor areas, and to revive towns and cities depressed for decades.


“If we don’t act now, mistrust between London and other parts of the country will only get worse.


“Social bonds binding the country together – which are already stretched to breaking point – could snap, tearing our precious social fabric. 


“Yes, London is a global city. But it’s also an English and a British city too. And I want these ties to remain strong. But you don’t achieve this by making London poorer.


“You do it by helping the rest of the country become more prosperous. And by creating a strong network of powerful cities and regions.”


Last year Sadiq endorsed the findings of the London Finance Commission, a group of cross-party political and business leaders led by Professor Tony Travers from the London School of Economics, which published a comprehensive, wide-ranging agenda of devolution requests.


As well as fiscal devolution, and the devolution of the full suite of property taxes, the Commission also proposed London should receive a share of its contribution to vehicle excise duty (VED) revenue for improvements to nationally strategic roads within the capital.


It also said the Government should consider devolving air passenger duty (APD) raised in London and that London’s share of the soft drinks industry levy should be retained within the capital.


Professor Tony Travers of the London School of Economics, said: “Devolving powers and taxation would improve the government of England. London has pioneered city-regional devolution and to great effect.


“The successful implementation of city-specific policies means people are more satisfied with their government. Sadiq Khan and other city-region mayors are right to press for more powers over railways, skills and housing.


“There would be efficiency gains from better, city-wide and local, use of taxation. The coming years will be profoundly important for the country: the time has come to un-burden the Cabinet and Whitehall and allow them to concentrate on Britain’s future role in the world.”


Cllr Judith Blake, Chair of Core Cities UK and Leader of Leeds City Council, said: “The Mayor of London is right. Despite some good progress on devolution, the UK is still one of the most heavily centralised states in the developed world. Running almost everything centrally in this way is holding our economy back and it reinforces the view that growth is a zero sum game, so if you have it in one city, you can’t have it in another.


“If the UK is to realise anything like its full potential, then all our great cities need to be given the tools to deliver more inclusive growth, rebalancing the economy through a strong capital and strong cities. We estimate doing this will boost productivity and generate £100 billion a year for our economy. This is even more critical as we approach Brexit, and devolution is a big part of the solution.”


Ben Rogers, Director, Centre for London, said: “'London businesses, civic groups have long argued that London needs to be given more power, especially over taxes. But the Mayor is right to stress that this is not about London breaking away from the rest of the country and keeping more for itself.


“A successful London is a help, not a hindrance to the rest of the country. And it's not just London but all city regions that need increased powers and freedoms – both to boost jobs and growth, and to bring government closer to the people.”