Fiscal Innovations

The North East is a wonderful place to live. The people are friendly and hard working. The landscape is beautiful, our heritage impressive. We have world-leading industries. But let’s not sugar-coat the truth. Our productivity is too low,  and our healthy life expectancy is the worst in England. Widespread deprivation goes hand-in-hand with the lowest levels of asset ownership.

The reason is simple: long-term under-investment. Investment in businesses, investment in infrastructure, and investment in our people. This is what devolution must fix. Our region needs investment, and productive people. People are only productive, in the sense of a modern economy, when they are happy, healthy, and have the skills to contribute. Everything else flows from this. The solution is to make the North East a powerhouse of wealth generation.

I have been making the case that the investment is already there to be found. The remaining ingredient is political will. I’m standing ready to make the North East an economic powerhouse. This is about breaking the mindset that the North is inevitably poor. I’m not asking for fish. I’m asking for a fishing rod.

The answers to the economic problems of the North East lie in generating more wealth here. This will result in a virtuous circle of reducing health and skills inequalities which, in turn, will lead to greater prosperity.

But wealth generation depends upon the freedom to innovate. This should not be limited to the private sector. Whole swathes of services and infrastructure are run or administered by local, regional, and national government. Too often, they don’t coordinate well. Funding mechanisms and convoluted lines of accountability disincentivise both long-term strategic action, and agile innovation. You cannot level up the North from Whitehall.

Nor can regional economic inequality be addressed by raising taxes locally. The unevenness of the tax base would just exacerbate the inequality.

Mayoral combined authorities would gain these fiscal mechanisms:

• A regional wealth fund to boost SME growth.
• Earn-back from payroll taxes to incentivise job creation.
• Invest to save to front load investment, paid for by downstream savings.
• Land value uplift to accelerate transport infrastructure investment.
• The establishment of a levelling up board at the level of the mayoral combined authority, chaired by the mayor, with representatives from each domestic government department.

This is a win-win. It pays for itself. It creates incentives for stronger regional leadership. It grows the national income. It reduces pressure on public services. And it improves the lives of our citizens.

Related Achievements