Devolution: A Decade On - Justice Committee Contents

Examination of Witness (Questions 740-743)


8 JULY 2008

  Q740  Dr Palmer: What do you see as the key differences between the revenue and funding base for local government and for the GOL and do you reckon that one ought to be adjusted to match the other?

  Tony Travers: I share many of Ken Livingstone's previously expressed views about weakness of local government finance in England but separately in Scotland and Wales. I think that, in fact, the Mayor of London, in a classic UK asymmetry, was arguably given somewhat greater financial powers than either the Welsh or Scottish Governments, and by that I mean the Mayor does have access to the precept but also has access to a very large income from fees and charges, particularly the very buoyant yield of London Transport fares. This gives the Mayor of London significantly greater freedom to act in terms of changing his spending than arguably is true for either the Scottish or Welsh institutions, and that is an asymmetry, an oddity, given that those institutions have significantly greater power. That is not the answer quite to the question of whether it would be better if this institution had greater fiscal autonomy, to which my answer would be, yes, but I also think that would be true for local government as a whole.

  Q741  Dr Palmer: Actually you favour something like the Scottish option where they could raise a lower tax at county level?

  Tony Travers: The Scottish Government does, indeed, have the power to raise income tax and also to reduce it by three pence in the basic rate of income tax. Yes, I do. I would accept that, and I think it would lead to beneficial effects on turn-out in elections. I think if that was at stake, if income tax rates were at stake, it would make elections even more contested.

  Q742  Mr Sharma: How could provision be made for local government to have similar powers to the GLA to determine the allocation of resources?

  Tony Travers: I think that the rest of local government, although it is a different model, within its cabinet, as they mostly now are, does have pretty significant freedom. It does not have much freedom in the setting of its council tax, but they have freedom within the resources that they collect from council tax and government grant, and they have been given slightly greater freedoms in the last year or two to use the total of the resources that they have. I am not sure that the Mayor of London is that much less constrained or has that much more freedom, to put it the other way round, than most local authorities. My personal view is that it would be better for devolved government in Britain if both the GLA and local authorities were to be given greater freedom to raise and lower their own taxes, but also greater freedom then to decide how they dealt with their budgets. So I think it is all of them taken together, and in many ways the Mayor of London, other than the fact that he does have access to this huge set of fees and charges from public transport fares and, indeed, the congestion charge, is not in such a significantly different position from local government as a whole.

  Q743  Chairman: Thank you very much indeed. We are very grateful to you. It has been a brief session because we were interrupted earlier.

  Tony Travers: I understand. Thank you very much for inviting me.

  Chairman: Thank you very much, Mr Travers. We have work to do in private session.

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