Labour accused of devolution U-turn on business rates


The Labour Party has been accused of U-turning on a key plank of its devolution agenda, with new manifesto proposals that could provide less guaranteed cash for local transport.

In its manifesto issued on Monday, the Labour Party confirmed it would ‘enable city and county regions to retain 100% of additional business rates raised from growth in their area’.

This prompted communities secretary Eric Pickles to post a tweet accusing Labour of committing ‘a sneaky U-turn’ and abandoning their ‘2014 pledge for full 100% business rate retention of full revenues’.

In a letter issued to local authority leaders on 25 August 2014 promising a new devolution deal for England, shadow communities secretary, Hilary Benn, stated ‘retention of 100% of business rate income’ would be delivered and combined authorities would also enjoy 100% of business rate revenue ‘to help you generate growth and benefit from it’.

The cash had been promised to councils as part of a £30bn devolution plan that would help boost local transport and infrastructure investment. A Labour spokeswoman said the party would still devolve £30bn over  five years to city and county regions across England, including employment support, transport and housing, skills and business support.

It has also vowed to create more combined authorities, which would retain 100% of additional business rates.

A Labour source insisted: ‘Labour have said for some time now that their policy applies to business rates growth.’

Hilary Benn told Transport Network’s sister publication The MJ: ‘This is desperate stuff from Eric Pickles. The Tory manifesto says they will “pilot allowing councils to retain 100% of growth in business rates,”’ Mr Benn added.

‘Labour will just get on with it and do the same but for all combined authorities that want it and not just a few.’

Will Brooks, head of office for the LGA Conservative group, hailed his party’s manifesto commitments for business rates growth retention pilots in Greater Manchester, Cambridgeshire and Cheshire East as a positive result – which both the group and the Local Government Association (LGA) corporately had been demanding for some time.

‘The pilots are to see how these work out, but I think what is crucial is that the party has recognised that one size doesn’t fit all for devolution deals,’ said Mr Brooks.

He added the Conservatives were seeking to deliver bespoke local growth deals, opening the door to district and county areas submitting proposals for their local area which could be put in place by the end of the year.


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