Control of the main commercial property tax in England should be entrusted to directly elected mayors to encourage investment, according to the minister who oversees the UK government’s “equalization” program to tackle regional inequality.
Following the launch of his long-awaited policy white paper outlining plans to improve “abandoned” parts of the country, Michael Gove told the Financial Times that he would like to see additional powers for mayors.
Although the Treasury is transferring some power to switch business tariffs between different sectors, Gove would like to relinquish more control to adjust the commercial property tax. “This is definitely the direction of travel we want to go down,” he said, noting that “previous Treasures” would not want any flexibility.
Ben Huhen, the conservative mayor of Tees Valley in the north-east of England, called on the government to shift interest rates to business to improve competition between regions, and expressed disappointment that tax-cutting powers were not part of the White Paper.
He acknowledged that there was “a lot of skepticism” in Whitehall about mayors, but said views had changed and the same would happen to business interest rates. “I think this is a case of argumentation. Few people are better prepared to do it than Ben, because it’s not just a theoretical case, he can demonstrate how he can make a difference. ”
Gove also said that the combined power of the West Midlands should be given powers over the police and that other town halls should “play a greater role when it comes to skills, further education, career”.
The 332-page White Paper, published Wednesday, was widely welcomed by local authorities but criticized by the opposition Labor Party for lacking new ideas and funding.
The minister rejected allegations that he had been denied additional resources by Chancellor Rishi Sunak. “You never have everything you want, but sometimes you get what you need,” Gove said, adding, “It’s important for people to recognize that we’ve been in this for a long time, that there is an advance payment for future investments.”
Gove acknowledged that the government had to convince those who voted for the Tories for the first time in the 2019 election that it could meet the dozen equalization targets that would be set in law.
“People are wondering if the scale of the ambition outlined in the missions can be provided with the necessary resources. And this is what we need to demonstrate. I don’t think there is anyone who is bothered with the basic analysis of what needs to be done. “
He denied that the equalization program, which he said Prime Minister Boris Johnson had made a “defining mission for the government”, was about punishing London and the more prosperous south-east of England, where economic activity was far ahead of the rest of Britain in decades.
“London succeeds if the whole of the United Kingdom succeeds, so we are not doing anything to make London less competitive, less attractive, less global supercity. . we must not suppress animal spirits in London and the south-east.
Critics of the equalization program say it simply eliminates the effects of austerity under previous conservative governments. Over the past decade, basic government funding for local authorities has been cut by 37 percent, according to the Institute for Government think tank.
Gove did not reject this, saying that in the past the government should have “restored the balance of budgets”, but acknowledged that some of the cuts may have been in the wrong areas. “The case is that the local government had to make some incredibly difficult elections and that is why we are now increasing the costs in local government,” he said.
The White Paper has also been criticized by some conservatives for its interventionist economy. Steve Baker, an influential MP, described the proposals as “socialist”. Gove said he had not turned left in his worldview, but that his conservative thinking had evolved.
He said the government’s approach to reform was “another modernization” of the Tory party, which sees a focus on economic reform and represents the values of voters who are “part of our new coalition”, a reference to its new supporters in former Labor centers. .
“The Conservatives are a national party or nothing,” he said. “We cannot be a party of any class, geography or ideology, we must be a party that recognizes the economic and moral imperative to help cities like Sunderland succeed. And I think this new kind of conservatism was born in part after the Brexit referendum.
Gove insisted that the equalizer could survive Johnson’s departure from Downing Street, but stressed: “Boris is the best champion to have an equalizer, so I support him 100 percent of the way.