Devolving more tax-raising powers to local areas would not result in a “race to the bottom” according to a report for a right-wing think tank.
The report by the Centre for Policy Studies said that the government should introduce an English Devolution Bill to give local government more say over the range and rates of taxes in their area.
The report said: “Some might fear that pitting local governments against each other in competition will lead to decreasing tax rates across the board and a lack of funding for the public services we all rely on.
“In reality, however, data suggests otherwise. An OECD report on tax competition between subnational governments, for instance, found ‘little evidence of a race to the bottom’ with respect to tax rates and tax revenues”.
