fund should be allocated competitively in support of the mayoral
strategies. It should be determined in significant measure by the
ambitions of those strategies and the local contributions from public
and private sources that the mayor can commit in addition. These
policies have been proved to work, excite local dynamics and add
greatly to what the public sector can afford. The other part of the
fund should be used to encourage the rest of England to convert to
the mayoral conurbation model, mayoral cities or unitary counties.
14. Further, the government should allow mayoral authorities to
raise local taxes and charges. These could include vehicle excise
duty, airport passenger duty, tourist tax and local cultural admission
charges. With appropriate local exclusions, it is ludicrous for British
tourists to pay to visit historic collections and buildings abroad while
millions of visitors to this country enjoy free access.
15. The Chancellor of the Exchequer should explore with the mayors
other options for local tax raising powers and the issue of local bonds.
If authorities are not given powers to raise finances, Government
should provide core funding commensurate with the scale of
16. There is one economic judgement that must be reappraised.
Orthodox Treasury thinking tests capital projects against a rate of
return on investment. Such a philosophy will allocate resources to
high growth areas and build on success. Therein lies the problem of
the left-behind. If we are serious about rebalancing, then we have to
be serious about the role of the public sector in facilitating this. There
is an element of risk and an element of faith. I had no idea what the
consequences would be when I created development corporations
in the East End of London and on Merseyside. In rebuilding great
areas of our country and restoring faith in millions of our citizens, we
have to rebalance our economic priorities. The calculations cannot
just be measured in crude economic terms. The Treasury, working
with economists, businesses and conurbations, should devise a more
balanced method for judging investment decisions in our cities. They