Ahead of Chancellor Rachel Reeves’ first Budget on 30 October, Mel Hird, managing director of Fresh Thinking Capital, urges the government to grant more tax-raising and decision-making powers to regions across the UK to empower local leaders and enable sustained economic growth.
In light of the Labour Party's 2024 manifesto, which prioritises economic growth, Hird believes that putting financial control into the hands of regional authorities is vital to unlocking the country's full economic potential.
Mel Hird said: "The Labour Party's focus on economic growth is a step in the right direction, but we must go further and move faster. Empowering the regions with greater tax-raising powers and control over decision-making places resources in the hands of those who know how to use them best. Local leaders understand their economies and are better equipped to create tailored strategies for growth."
Hird's call follows the Labour Party's pledge to introduce new spending rules, cap corporation tax at 25%, and provide economic certainty for businesses. However, the CBI has warned that companies have ‘paused’ hiring employees and are delaying investment choices due to concerns about tax increases in the government's next budget.
Hird said: "We cannot afford more short-term thinking. Recategorising debt or raising taxes without a clear path for investment will not solve our problems. Entrepreneurs need to be incentivised and supported to push and develop their businesses. Punitive taxes, such as rises in Capital Gains Tax, will only be a brake on growth.
Labour's plans to invest in infrastructure, clean energy, and green jobs are expected to create 650,000 jobs in future industries. However, Hird stressed that the success of these initiatives depends on regional empowerment. "The best investment decisions are made by those closest to the action. Regions need the power to direct funds where they're most needed, from housing to transport infrastructure, to ensure that growth reaches every corner of the UK."
Hird concluded: "We cannot continue with a one-size-fits-all approach to economic growth. Empowering the regions and reducing reliance on central government decisions will lead to more sustainable growth. It's time to act boldly and put decision-making power where it belongs—in the hands of regional leaders who know what their communities need."
