Leaders call on local government to seize devolution opportunity

Businesses across the country see devolution as an opportunity to spur growth, promote competition and kick-start regional economies, a new survey of members of the Institute of Directors revealed today.

In the poll of over 1,000 business leaders, two-thirds (65%) said they supported the Government’s plans to devolve powers to cities and regions.

IoD members supported giving combined authorities significant extra powers on housing, planning, transport, education, skills and local taxes.

But businesses were clear that tax-raising powers should not be used by local authorities to raise rates or increase the complexity of tax rules. More than half (56%) of IoD members said they were concerned that devolution could lead to higher taxes, or additional tax compliance costs.

The IoD is calling on local politicians to put enterprise at the heart of the devolution settlement.

In a survey of 1,085 IoD members, conducted between June 24th and July 9th:

• Two-thirds (65%) said they supported the plans for devolution
• Six in ten (58%) said they supported the model of directly elected mayors for combined authorities
• Businesses showed support for devolving powers over housing and planning (78% support), transport (76%) and education and skills (52%).
• However, there was staunch opposition to the idea of giving combined authorities the power to keep or alter the rates of national business or personal taxes such as national insurance, income tax, corporation tax and VAT.

Full results are below

The Chancellor has given local authorities until 4th September this year to submit a case for devolving powers to their cities and regions as part of his spending review.

Graham Robb (pictured above), North East Chairman of the IoD, said: “The IoD has been pushing the devolution agenda in the North East for some time because the Northern Powerhouse doesn’t stop at Manchester.

“Local politicians and businesses must work together to put forward a credible plan to convince the Chancellor that we should get additional powers over transport, skills and planning as soon as possible. Time is running out to meet the deadline for the Spending Review this autumn, the North East must seize this opportunity with both hands.”

James Sproule, Director of Policy at the IoD, added: “Businesses see huge potential in devolving power from Westminster to England’s great cities and regions.

“Each has its own strengths, opportunities and challenges, and should be given much more control over vital areas including education and skills training, local transport and planning and housing. Local government, working with business, will know how to boost competitiveness and tap into an area’s specialisms much better than any central planner in Whitehall.”

The survey’s full results were as follows:

1. To what extent do you support or oppose the plans to devolve additional powers to cities and sub-national regions?

 

Strongly support	19%
Somewhat support	46%
Neither support nor oppose	12%
Somewhat oppose	15%
Strongly oppose	7%
Don’t know / Not applicable	0%
Net support	65%
Net oppose	22%
Total	1,085

 

1. To what extent do you support or oppose plans to introduce directly elected mayors in return for combined authorities receiving additional powers?

 

Strongly support	15%
Somewhat support	43%
Neither support nor oppose	15%
Somewhat oppose	17%
Strongly oppose	8%
Don’t know / Not applicable	0%
Net support	58%
Net oppose	25%
Total	1,085

 

1. To what extent do you support or oppose combined authorities being given additional powers over the following areas?

 

	Transport	Education and skills	Housing and planning	Business rates	Corporation tax	Personal income taxes
Strongly support	33%	17%	35%	23%	4%	2%
Somewhat support	43%	35%	43%	37%	9%	5%
Neither support nor oppose	8%	16%	9%	14%	11%	8%
Somewhat oppose	9%	21%	7%	14%	27%	24%
Strongly oppose	5%	10%	5%	12%	47%	60%
Don’t know / Not applicable	1%	1%	1%	1%	1%	1%
Net support	76%	52%	78%	60%	13%	7%
Net oppose	14%	31%	12%	26%	74%	84%
Total	1,085	1,085	1,085	1,085	1,085	1,085

 

1. To what extent do you support or oppose combined authorities being given the power to keep the revenues raised from the following taxes?

 

	Business rates	Council tax	Stamp duty	Employers’ NI	Employees’ NI	Corporation tax	Income tax	VAT
Strongly support	26%	37%	14%	3%	3%	3%	2%	3%
Somewhat support	46%	45%	29%	7%	7%	10%	5%	8%
Neither support nor oppose	11%	8%	20%	15%	15%	12%	11%	14%
Somewhat oppose	8%	4%	19%	28%	28%	25%	24%	22%
Strongly oppose	8%	5%	17%	46%	46%	48%	57%	53%
Don’t know / not applicable	1%	1%	1%	1%	1%	2%	1%	1%
Net support	72%	82%	43%	10%	10%	13%	7%	11%
Net oppose	16%	9%	36%	74%	74%	73%	81%	75%
Total	1,085	1,085	1,085	1,085	1,085	1,085	1,085	1,085

 

1. To what extent do you support or oppose combined authorities being given the power to set/alter the rates of the following rates of tax?

 

	Business rates	Council tax	Stamp duty	Employers’ NI	Employees’ NI	Corporation tax	Income tax	VAT
Strongly support	19%	30%	6%	1%	1%	2%	2%	1%
Somewhat support	42%	43%	21%	5%	4%	7%	5%	5%
Neither support nor oppose	12%	10%	13%	7%	8%	7%	6%	7%
Somewhat oppose	10%	6%	18%	20%	20%	19%	17%	18%
Strongly oppose	17%	10%	42%	66%	66%	64%	69%	68%
Don’t know / not applicable	1%	1%	1%	1%	1%	1%	1%	1%
Net support	61%	73%	27%	6%	5%	9%	7%	6%
Net oppose	27%	16%	60%	86%	85%	83%	86%	86%

 

1. To what extent are you concerned or unconcerned that the devolution of tax powers to cities and regions will materially increase the amount of tax payable by your business?

 

Very concerned	18%
Quite concerned	38%
Neither concerned nor unconcerned	29%
Quite unconcerned	8%
Very unconcerned	4%
Don’t know / not applicable	4%
Net concerned	56%
Net unconcerned	12%

 

1. To what extent are you concerned or unconcerned that the devolution of tax powers to cities are regions will materially increase the tax compliance costs to your business?

 

Very concerned	20%
Quite concerned	38%
Neither concerned nor unconcerned	28%
Quite unconcerned	8%
Very unconcerned	3%
Don’t know / not applicable	4%
Net concerned	56%
Net unconcerned	11%