Minister dismisses Boris’s tax plan

Greg Clark told the Yorkshire Post that the Mayor of London’s call to give tax-raising powers to major cities including Leeds and Sheffield has little prospect of winning agreement in Whitehall in the foreseeable future.

Mr Clark, a Conservative, is the Government’s most passionate advocate of English devolution, and without his backing the proposals to give cities the power to levy taxes, including stamp duty and business rates, have little prospect of getting off the ground.

He made clear the coalition will instead continue to focus on giving control of some Whitehall spending to local areas through area-specific ‘City Deals’.

“In general, over the long term, I would like to see greater financial autonomy for places,” he said.

“But I think in practical terms, in the next year or so, I don’t think the changes on taxation are going to be the easiest ones to achieve.

“My role is to try to encourage people to be bold and ambitious (in winning devolution) for their areas, and try to steer through and to maximise what is possible. And I think it’s on the expenditure side that there is the greatest possibility at the moment.”

Mr Johnson first unveiled his radical plans last year, calling for five ‘property’ taxes – council tax, capital gains tax, business rates, the annual tax on developed dwellings, and stamp duty – to all be raised, levied and kept locally by England’s largest cities. The plan has been backed by all eight of England’s largest cities, including Leeds and Sheffield.

Appearing before a Commons select committee on Monday, he accused the Treasury of having an “obsession with centralisation” and contrasted its approach with the mass devolution of powers to Scotland and Wales.

“What has England got out of devolution?” the Mayor asked. “Not a sausage.”

Mr Clark praised the Mayor’s “muscular” approach to winning new powers, but warned that an argument over fiscal devolution could become mired in constitutional debate.

Instead, he said, the coalition will continue to focus on agreeing “growth deals” with local areas which see specific policy and spending powers devolved down.

“I think you should start with the spending side of things,” Mr Clark said. “If there is a piece of spending that is ostensibly for an area, I think you can make a strong argument to say this should be in the hands of local people.

“If we take in a general sort of constitutional approach, then I think we will just still be talking about it. There will be a big national debate about whether we should do it.”

Over recent weeks the Labour Party has made clear it supports the concept of English devolution, and is expected to make a major commitment in its 2015 election manifesto.

Mr Clark said he had no fears that the Tories will be outflanked on the issue, insisting he welcomed a debate on how best to help local areas such as Yorkshire support themselves.

“I would love it if Labour got serious about devolution,” he said.

“The more there is a row about something, and the more there is a debate about something, the more prominence it gets.

“I find it frustrating, to be frank, that Labour has been so inert on this all the time I’ve have the brief. I’ve got no-one to debate with. There is no-one pushing us to go further and faster.

“In any other area of policy you’ve got a vigorous Opposition saying you can do things differently. But there has been total radio silence from Labour on this.”