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Home » International, Westminster

The case for devolving decision-making and tax-raising to London

Submitted by on 16 Nov 2010 – 11:15

Mike Tuffrey

By Mike Tuffrey, Liberal Democrat London Assembly member

For all my political life, intense debate about devolution for Scotland, Wales and Northern Ireland has been a given fact. From the memory fog of the 1970s come recollections of battles over Sunningdale and then the dying days of the Callaghan government with tense votes over referendum thresholds.

In London, by contrast, things have been very different. Barring the brief Thatcher-inspired gap following Greater London Council abolition in 1986, London has had some form of regional government for well over a century. The London County Council, the predecessor to the GLC, was created way back in 1889. The history since then has been one of broad consensus about an entity on this scale needing its own constitutional settlement.

Small wonder: with a population of nearly 8 million, London is half as big again as Scotland and its productive economy is getting on for three times the size.

So most Londoners take regional government as a given. Granted a vote in 1998 about creating the Greater London Authority, they voted decisively to return to ‘normality’. The ‘yes’ vote won in all London’s 32 boroughs, with support varying from 57% in Bromley to 84% in Haringey.

The return of London government has more than survived a change of party in national government; it has been strengthened. Far from returning to an abolition agenda, one feature of the May general election was a manifesto commitment by the Conservatives for more devolution.

Indeed the coalition government, made up to two parties formally committed to decentralisation of power, has strengthened that still further. New legislation to deliver this commitment is now just months away. Already abolition of the Government Office for London has been announced.

It says a great deal about how fast the debate has moved on that by the end of July there was sitting on the desk of the Secretary of State for local government a submission for further devolution in London, jointly signed by Boris Johnson as mayor, by the chair of London Councils (a Labour-controlled body run representing all the London Boroughs) and by my Liberal Democrat colleague Dee Doocey, as chair of the London Assembly.

The joint submission covers housing, policing, regeneration and transport, with broad agreement over increased devolution to boroughs as well as extra powers being granted to both the Mayor and the London Assembly.

After celebrating 25 years this summer since my election to the GLC just prior to abolition, I take real delight that we are moving decisively in the right direction. Long treasured Liberal Democrat proposals for the decentralisation of power are now being advanced.

Some small, but important steps have already occurred. For example, after many years of blunt refusal, a government minister has now come to City Hall and subjected themselves to questioning by the directly elected London Assembly – a significant development demonstrating that Whitehall is treating London’s regional government with the respect it deserves.

However, the big challenge for the coalition government isn’t devolution of powers, tough though it will be for Whitehall to let go. The real question is about devolving revenue raising powers. While the purse strings are so tightly held in Westminster, decentralisation will always remain a limited and frustrating affair, whether seen from town hall, City Hall or Holyrood, Edinburgh.

Of course outside of London, people will say that giving London more powers to tax and retain revenues locally will simply diminish the national exchequer. In fact, if we can use tax from big developments to fund the infrastructure necessary to realise them, then we will grow the London economy, faster and to the benefit of all.

In short, the benefits of devolution extend far beyond better government alone. The coalition needs to have the courage of its convictions. The prize of decision making and tax raising being closer to citizens is huge, leading to improved accountability, better services and a more prosperous economy.

We have a long way to go, of course, but thankfully the days when the “gentleman from Whitehall” knew best are over.