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Business leaders call on local government to seize devolution opportunity

29 Jul 2015

Survey of IoD members shows support for giving more powers to regions

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 reveals today [Monday 27 July 2015]. In the poll of over 1,000 business leaders, two-thirds (65%) said they backed 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 2015 to submit a case for devolving powers to their cities and regions as part of his spending review.

James Sproule, Director of Policy at the IoD, said:

“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.

“Devolution will be most effective when it puts business at its core. The ultimate goal is to create vibrant local and regional economies, each competing to deliver efficient transport systems and workers with the right skills. However, if local authorities seek to avoid political responsibility for devolved issues or to boost their coffers by hiking taxes and creating obstacles to business, the great opportunities of devolution will be lost.”

Mike Perls, IoD North West Chairman, said:

"The ambition and innovation shown in Greater Manchester's growth and reform plan illustrates the potential that devolving power to the regions can present. Businesses understand that regionally controlled transport, planning, housing, education and skills strategies are more likely to create an environment to enable them to create growth through higher value jobs. I fully expect and welcome more city region Combined Authorities to finalise devolution agreements over the coming weeks and months."

Graham Robb, IoD North East Chairman, 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.”   

Full survey results

Q. 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

Q. 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

Q. 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

Q. To what extent do you support or oppose combined authorities being given the power tokeep 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

Q. To what extent do you support or oppose combined authorities being given the power toset/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%

Q. 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%

Q. 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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