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Report recommends more
fiscal powers for London
London, 19 May 2013: An independent expert inquiry set up by the London mayor Boris Johnson has argued that unless significant tax-raising powers and revenues are devolved to the UK capital it will lose out to rival global cities. The London Finance Commission heard evidence from UK experts and examined other global cities to determine how the capital could secure an enhanced share of national and local tax revenues in order to promote much-needed investment in infrastructure to cope with its projected growth over the next decades.
Following his May 2012 re-election as mayor, Boris Johnson agreed to establish an independent commission to examine the case for decentralization to enhance the capital’s economic performance, given its weakened fiscal position contrasted to other leading global cities under the UK’s centralized system of local government. Headed by Tony Travers of the London School of Economics, the commission’s report ‘Raising the capital’ found that only seven per cent of tax paid by London residents and businesses is redistributed directly by locally elected bodies (the Mayor and borough councils). This contrasts with other world cities; for example, 74 per cent of London’s funding comes from centralized grants, compared to 31 per cent in New York, 25 per cent in Berlin, 17 per cent in Paris and eight per cent in Tokyo. London is also a ‘tax exporter’, home to 13 per cent of the population but generating 18.5 per cent of the national tax take.
The report’s key findings and recommendations are:
• Existing funding models for basic infrastructure are inadequate to cope with predicted growth London needs fewer constraints and greater devolved powers making it more accountable to its residents and businesses;
• A failure to invest in London will hamper forecast demographic and economic growth sustained investment is needed into transport, schools, housing, energy supply and technology;
• The report proposes devolving the full suite of property tax revenues streams - this includes council tax, stamp duty land tax and business rates with the ability to reform those taxes while retaining prudential rules for borrowing for strategic capital investment. This will provide stable and continuous funding for prudent investment, moving away from ad hoc financing for specific projects;
• A recommendation that London could introduce smaller new taxes, for instance over tourism, a power now being introduced in Scotland;
• The Mayor, the 33 London councils and the mayor’s enterprise panel develop and maintain a long term, high level capital investment plan for the city;
• With enhanced fiscal autonomy, London could re-invest additional tax yield directly back into the city. The report’s proposals are revenue neutral at the point of devolution, no additional money is being sought beyond that which London already receives;
• The report finds this is a formula applicable not only to support the growth of London but other large cities across the UK.
The report argues that London has the same population as Scotland and Wales combined, but remains in the view of the London mayor “fiscally infantalised”. Launching the report at City Hall, he said: “The current system is simply not fit for purpose and is out of step with the funding settlements enjoyed by cities of comparable size and stature. Furthermore, Londoners will increasingly question why London government cannot enjoy similar fiscal freedoms as those afforded to the devolved governments in Scotland and Wales. London’s key bodies are agreed that the capital’s financial future lies in greater devolution.”
The report was warmly endorsed by London Councils chairman and borough mayor of Hackney Jules Pipe: “Just seven per cent of all the tax paid by London residents and businesses is retained in London by the Mayor and the boroughs. The equivalent figure in New York is over 50 per cent. The UK has one of the most centralized taxation systems in the world and that is reflected in the decisions being taken by Whitehall civil servants and ministers.” The commission’s findings are not only endorsed by the 33 London boroughs, but also England’s other main cities. Sheffield’s city leader and finance spokesperson for the Core Cities Group Julie Dore said: “If the Government wants a rebalanced UK economy, it has to be willing to devolve more power and set cities free. What’s good for London is in different ways good for all the country’s major cities.” The UK Treasury said that it would comment on the report in due course.
Athens Mayor to press charges
against alleged far-right assailant
Athens, 9 May 2013: The Mayor of Athens has decided to press charges against a right-wing member of the Greek parliament who assaulted him and pulled a gun in an incident last week. A spokesman for Mayor George Kaminis said that Giorgos Germenis, a member of the far-right Golden Dawn party, should be made an example of. The confrontation occurred when Germenis stormed into a municipal building as the mayor handed out gifts to celebrate the Greek Orthodox Easter festival. Eyewitnesses told the police that the punch intended for the mayor landed on a 12-year old girl, who was about to receive her present.
The right-wing parliamentarian told supporters that he wanted to protest against the mayor’s decision to stop a free food distribution exclusively for Greeks, which his party had organised. Members of Golden Dawn had clashed previously with the police when they tried to hold a Greek-only food hand out in Syntagma Square in the centre of Athens. Food was only to be given to Greek citizens with identity cards. Mayor Karminis called the practice discriminatory. “The square belongs to all citizens. Thuggery will not prevail in this city as long as I am mayor,” he emphasized.
Prosecutors said they wanted to charge Germenis with verbal assault and attempted bodily harm. Germenis can be seen on video going berserk as he tries to get at the mayor.
In last year’s parliamentary elections, Golden Dawn won 18 out of 300 parliamentary seats but the party’s popularity has been rising since then as a result of the government’s austerity measures, implemented to prevent the country from going bankrupt. The party has been linked with a number of attacks against immigrants.
Nigel Farage follows in the steps
of other European rabble-rousers
London, 4 May 2013: Nigel Farage, Britain’s latest political darling, might detest anything Continental but with his UK Independence Party’s success in Thursday’s local elections he joins a group of European politicians - most of them from the right of the political spectrum - who, by their force of personality, emotional oratory and natural charm have convinced large number of voters to back for them. Most of them are nationalistic, anti-immigration, xenophobic and some have at times expressed racist views.
The godfather of Europe’s recent firebrands is undoubtedly Jean-Marie Le Pen, who in 2002 shocked France when he qualified for the run-off of the country’s presidential elections. But he could not repeat the feat in 2007 and, in 2011, handed over the presidency of the National Front (FN) to his daughter Marine.
This century, the Netherlands has already produced two political rabble-rousers, whose populist, anti-immigration policies attracted for brief periods large followings. In the 2002 general election, the newly-formed Pim Fortuyn List (LPF) became the second-largest party in parliament, although the ballot was overshadowed by the assassination of Pim Fortuyn nine days before election day. The party entered a coalition government led by the Christian Democrats but after only a few months it became clear that without its charismatic leader, the LPF had no future. It was formally dissolved in 2008.
By then a new right-wing firebrand had emerged on the Dutch political scene: Geert Wilders. Sensing the void left by the demise of the Pim Fortuyn List, he left the centre-right People's Party for Freedom and Democracy (VVD) to form the Party for Freedom (PVV), which quickly established itself as the fourth-largest party in the Netherlands. In the 2009 European elections, the party attracted some 17 per cent of the vote - incidentally roughly the same percentage of votes Nigel Farage and his UK Independence Party collected in Britain in that election. In the 2010 general election Wilders’ party became the third-largest group in parliament after having received more than 15 per cent of the public vote but its support was reduced to 10 per cent two years later.
In the 1980s Jörg Haider, one of Europe’s most controversial post-war politicians, began to make a name for himself in Austria. He took over the leadership of the then liberal Austrian Freedom Party (FPÖ) in 1986 and immediately began to move the party to the right. Haider’s mix of anti-Muslim, anti-immigration policies soon made him one of the most popular politicians in the country. Support for the FPÖ rose from 5 per cent in 1986 to almost 27 per cent in 1999. In 2000, the party joined the conservative People’s Party (ÖVP) in a coalition government, which was initially shunned by other European Union governments. Internal rivalries and declining public support, led to a split of the FPÖ. Haider formed a new party the Alliance for the Future of Austria (BZÖ), which, however, never became a serious force in Austrian national politics. Jörg Haider was killed in a car crash in October 2008.
Beppo Grillo, whose Five-Star-Movement won a quarter of the vote in Italy’s general election this February, is not easy to label. His views on taxation and Europe are close to those of right-wing populists but he has also proposed policies that could be supported by European Green parties, while his call for free access to the internet would win enthusiastic backing from the German and Swedish Pirate parties. Other demands, such as a minimum wage or public water, are decidedly leftwing. The Five-Star-Movement and its leader came to international prominence in 2012, when its candidate Federico Pizzarotti, was elected Mayor of Parma. Pizzarotti has astonished observers of the Italian political scene by emerging from obscurity to become the first Five-Star candidate to run one of the country's major cities. The Movement did also well in other Italian cities, including Genoa, Verona and Monza.
Nigel Farage left Britain’s Conservative Party in 1992 to become a co-founder of the UK Independence Party (UKIP). In 1999 he was elected to the European Parliament and in 2006 became party leader and was again elected leader in 2010. UKIP, whole party symbol include the pound sterling sign (£), has consistently campaigned against Britain joining the euro and also advocates the country’s exit from the European Union (EU). More recently, the party has portrayed nightmare scenarios of millions of Bulgarians and Romanians coming to Britain in 2014, when EU ‘free-movement-of-labour’ restrictions are lifted for the two countries.
German cities to bring in
stricter rent controls
Munich, 22 April 2013: As from next month, German states will be able to cap rent rises in the country’s booming urban centres such as Munich, Stuttgart, Frankfurt, Hamburg and Berlin. A new law, which was approved by the German parliament (Bundestag) last year, allows regional governments to limit rent rises to 15 per cent over a three-year period in cities and even desirable suburbs. Bavaria is the first German state to take advantage of the new rules but others like, North-Rhine Westphalia and Rhineland-Palatinate as well as the city states of Hamburg and Berlin, are likely to follow suit.
Since the 2008 financial crisis, Germany has experienced a property boom. With interest rates at a record low, investors have bought up rental properties in growing conurbations. Average rental yields in cities like Berlin, Frankfurt or Munich range typically between 3.5 and 4.5 per cent, while it is rare to find a bank that offers more than 1.5 per cent on 12-month investments.
However, despite sharp rent rises during the past two years, residential rents in Germany are still considerably more affordable than in other western European countries. According to real estate agents CBRE, rent accounts for just 24 per cent of households’ disposable income in Berlin and Cologne. Even in the more commercial cities of Hamburg and Frankfurt, the proportion is no more than 30 per cent. The equivalent for London is estimated at 35-40 per cent.
Germany is one of the few countries in Europe, where renting your home has no social stigma attached. German home-ownership is only 44 per cent, compared to 65 per cent in Britain. The country also has a highly influential tenant lobby, which believes rental stability is a cornerstone of the country’s economy. Unlike in Britain, where short-term tenancy agreements are the norm, German tenants enjoy long-term security of tenure. For a small annual fee, the national Mieterbund (tenants federation) provides tenants with legal assistance in disputes with their landlords.
Average monthly rent per sqm for a 120 sqm apartment in a good area
Frankfurt, Munich and Bonn named
as the most promising German cities
Berlin, 20 April 2013: Research published this week, predicts a bright future for Germany’s financial, high-tech and research centres, while the prospects for cities in the Ruhr area, the country’s former industrial heartland, are less certain. A new report by the Hamburgischen Weltwirtschaftsinstituts (Hamburg Institute for World Economics / HWWI) and the Berenberg Bank examined trends, which determine the competitiveness of the largest German cities and their surrounding areas. A spokesman for the Berenberg Bank told City Mayors that the cities at the top of this year’s ranking - Frankfurt, Munich and Bonn - offered locational features that made them extremely attractive to business and skilled professionals. Of particular importance were factors such as education, innovation, accessibility and global outlook.
Since the research was first carried out in 2008, Frankfurt and Munich have occupied the first two places, while Bonn, this year’s third-placed city has improved its ranking in each subsequent survey as has the German capital Berlin.
Even though Germany’s birthrate has fallen well below the 2.1 level necessary to maintain the population at its present level, 25 of the 30 cities examined by the research have grown between 2005 and 2011. Only Bielefeld, Bochum, Duisburg, Wuppertal and Gelsenkirchen, all in the Ruhr area, have shrunk. The populations of Berlin and Munich increased by more than 100,000, while Hamburg, Cologne and Dresden have all seen an influx of more than 40,000 new residents.
The populations of Germany’s major cities are also getting younger. Without exception, in all cities the number of 18 to 30-year olds rose, while the number of 30 to 65-year olds declined. Berlin, for example, gained 180,000 young people but lost 45,000 older ones.
The German Office of Statistics estimates that between 2010 and 2025, 18 of the country’s 30 largest cities will grow, while the remainder will record losses. Munich can look forward to the largest gains (+5.7%), while Chemnitz in former East Germany is predicted to lose almost 14 per cent of its population. The projected gains / losses for other German cities are: Hanover (+4.6%), Cologne (+4.0%), Düsseldorf (+3.8%), Gelsenkirchen (-9.5%) and Duisburg (-6.8%). Munich, Dresden, Leipzig, Berlin and Hamburg are predicted to enjoy an above average increase in people under 20.
The authors of the research study believe being able to attract and retain foreign students and skilled professionals is vital for cities that want to compete successfully in Europe and the world. Frankfurt has the highest percentage of foreign students of any of the 30 cities examined, while Munich’s workforce includes 16 per cent non-Germans. German cities with the highest percentage of foreign students / foreign workers: Frankfurt (17.3% / 15.6%), Berlin (16.1% / 7.3%), Stuttgart (14.5% / 14.3%), Wiesbaden (14.4% / 11.2%), Mannheim (11.6% / 12.6%), Hamburg (11.2% / 8.6%), Karlsruhe (13.0% / 10.4%), Bonn (12.4% / 8.6%).
German cities with the most promising future
Research by HWWI/Berenberg Bank (2013). The research was carried out among the 30 largest German cities. Combined the cities have 18.2 million inhabitants, representing some 22.3 per cent of Germany’s population. Berlin, Hamburg, Munich and Cologne all have populations of more than one million. Berlin, population 3.5 million, was the largest city in the sample, while the populations of Chemnitz and Kiel are below 250,000.
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Report recommends more fiscal powers for London (Photo: London city Hall with Tower Bridge)
Athens Mayor to press charges against alleged far-right assailant (Photo: The Swastica-like symbol of the far-right Golden Dawn party)
Nigel Farage follows in the steps of other European rabble-rousers
German cities to bring in stricter rent controls
Frankfurt, Munich and Bonn named as the most promising German cities (Photo: Frankfiurt)