Leaders call on local government to seize devolution opportunity

Graham Robb

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%

 

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