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Businesses give lukewarm support to English devolution

Businesses give lukewarm support to English devolution

🕔23.Apr 2015

A St George’s Day survey by the British Chambers of Commerce shows that businesses want more decisions taken in town halls rather than from Whitehall, but support for devolution is far from overwhelming reports Paul Dale.

The results from more than 1,300 English firms show that 42 per cent believe greater devolution to their local area would have a positive impact on their business, while 26 per cent think it would have negative consequences.

Crucially, businesses remain highly sceptical about tax-setting powers being handed over to councils and want ratepayers to be given a direct say over spending proposals.

Nearly a third of English businesses would expect their tax bills to rise if set locally, while just under a fifth expect to pay less tax. Micro, small and medium-sized businesses were more likely to say they would expect to pay additional tax, compared to large organisations.

The majority of businesses identified simplifying local government (58%) and giving ratepayers a vote on local economic strategies (51%) as the most effective methods of increasing the accountability and effectiveness of local government.

British Chambers of Commerce is calling for ratepayers to be given a vote on local economic development plans and funding decisions.

BCC Director General, John Longworth, said

Firms want to see spending decisions related to local growth made in their areas, but remain very sceptical of any devolution of tax-setting powers.

Our research shows business people in England broadly support the concept of further devolution to their local area. Firms want to see spending decisions related to local growth made in their areas, but remain very sceptical of any devolution of tax-setting powers.

Businesses don’t support devolution for devolution’s sake. However, they support greater local-decision-making if it means greater efficiency, greater accountability and better results.

Our proposal for a ratepayers’ vote on local economic development strategy and funding decisions would ensure that plans for an area’s future have the support and input of the whole business community.

As various parties’ election manifestos have acknowledged, boosting the growth prospects of England’s cities and counties must be a priority for the next government. Yet devolution must work for business if local areas are to see sustainable growth and job creation for years to come.

The survey was published as it was confirmed that former Aston Villa chief executive Paul Faulkner is to take over at the head of Birmingham chamber of Commerce from Jerry Blackett who is retiring after nine years in the role. Mr Blackett has been an active proponent of devolution, playing a key role in the elected mayor debate, helping to create the Greater Birmingham and Solihull Local Enterprise Partnership and being part of Lord Heseltine’s Greater Birmingham project.

Mr Faulkner said he was “very excited” about Birmingham’s future prospects. He told the Birmingham Post:

When you think about Birmingham and the region, and what is going on with HS2, HSBC, New Street station, John Lewis, the work over at the airport and the new routes, the links with China.

Key findings from the BCC survey:

  • English businesses have an appetite for devolution
  • Firms in England believe handing more powers to local governments will have a positive impact on their business – 42% positive, compared to 26% negative
  • However, firms are sceptical about localised tax-setting powers
  • Nearly one third of businesses (30%) expect to pay more tax if rates were set locally, compared to 18% who expect to pay less tax
  • Only a third of businesses (34%) support paying higher taxes if the money is retained and spent locally
  • Devolution must increase the efficiency and accountability of local government
  • Businesses identified simplifying local government (58%) and giving ratepayers a vote on local economic strategies (51%) as the most effective methods of increasing the accountability and efficiency of local government
  • The majority of businesses surveyed anticipate the greatest positive impact from devolution to be on transport investment (67%), and apprenticeship funding and delivery (58%)
  • To ensure businesses are placed at the heart of local growth, the BCC’s Business Manifesto is calling for the incoming government to:
  • Guarantee a business ratepayers’ vote on local economic strategy, including a vote on any proposed changes to local business taxation – ensuring that plans for an area’s future have the support and input of the whole of the business community.

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