This week will be recorded as an important time in British political history. The news that Scotland is to be given complete control over income tax and greater control over the rest of its finances represents one of the biggest shifts in the political power balance for years. It is a momentous decision for the people of Scotland and we should welcome the Smith Commission’s conclusions. It is evidence of the power of democracy: young and old Scots came together to demand new powers and the Government was forced to respond.
But while the focus has been on Scotland, and there has been much talk of how this will affect Wales, Scotland and Northern Ireland, people seem to be forgetting that there is a fourth devolved assembly in this country: London. The capital is missing out in the devolution debate in a way that it can little afford. Londoners need new powers over their city just as much as those in Scotland do. Why, then, is the Government giving new income tax powers to Scotland but refusing to devolve control of more minor taxes, like business rates and stamp duty, to London and other cities?
Devolution is needed all over the country, which is why it makes no sense to be giving new powers to one region of the UK but not others. I believe in radical devolution of power to cities and regions right across the UK.
Nowhere is this more obvious than in the capital. London has a population the size of both Scotland and Wales combined, and an economy double the size of both of those countries put together. It produces a quarter of our country’s wealth yet receives just a seventh of public spending. And just 7% of taxes paid by Londoners go to London’s leaders to reinvest in public services, the rest going into Treasury coffers to be spread around the country. In comparison, New York keeps 50% of its taxes and Tokyo keeps 70%. The lack of democracy and devolved power in London is making it difficult for our capital to compete with other world cities.
Some say London already has it all and question why it needs any more. They are wrong for two reasons. First, London is not disproportionately benefiting from public investment. In fact, it receives less in public spending per person than Scotland, Wales or Northern Ireland. Second, the need for investment in the capital is urgent and very real: London’s transport system is at breaking point, our housing crisis as severe as it is damaging, and one in four young people in the city is unemployed. London also has a higher rate of child, working-age and pensioner poverty than anywhere else in England.
With new powers, we could start work on Crossrail 2, build many thousands of new homes and create a wealth of new jobs for Londoners. Our skills budget could be expanded to bring down the unemployment rate and train people for the jobs of the future. New schools could be built to cater for the growing shortfall in school places, and overstretched hospital services properly funded. This is the work that I want us to be allowed to get on with, instead of having to fight a bidding war for the Treasury every time we need to invest in our city.
What’s more, devolution to London isn’t just about giving the Mayor more powers, but about genuinely empowering local authorities and London communities by giving them control over what happens in their area. I want to see a radical form of devolution that gives local communities genuine powers over housing, infrastructure and public services.
London is a vibrant world city with the potential to continue being a world leader in a whole array of sectors. But to fulfil its potential and benefit all who live here it needs to be given greater control over its own destiny. In short, Londoners need to be given the powers to run London. Yesterday’s announcement is a big step forward for democracy in Scotland and we should welcome it. At the same time, but let’s not forget about the other regions and cities.
David Lammy is the MP for Tottenham and is seeking the Labour nomination for Mayor of London
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