What can London learn from Hamburg on devolution?

By Susana Mendonça
BBC Radio London political reporter

Media caption,
How does London compare to one of Europe's most autonomous cities?

As London's mayor bids for more powers for the city ahead of the Autumn Statement, BBC News heads to Hamburg to find out what impact devolution has on a city.

Hamburg, in northern Germany, is unlike most of the country's cities. It is a "city state", which gives it not just a louder voice than counterparts such as Frankfurt and Munich, but also more autonomy over its own affairs.

One of the key tools at its disposal is tax - it gets to decide how to spend some business and property taxes - both pots of money currently denied to the mayor of London.

Ever since the Brexit vote, in which most Londoners voted to remain in the European Union, Sadiq Khan has been using that disconnect with the rest of the UK and concern over London's economic future as leverage to push for more powers for the capital in areas such as fiscal devolution and skills.

The kinds of powers that being a "city state" can deliver.

Image caption,
First mayor Olaf Scholz says he has more power to make sure more affordable homes are built

Mr Khan had a meeting with the chancellor Phillip Hammond on 15 November, ahead of the Autumn Statement, in which he set out the case for more devolved powers for London.

He specifically asked for more powers in relation to skills, housing and transport, and in the longer term to increase London's share of the central taxes raised in the capital.

The London mayor's counterpart in Hamburg is first mayor Olaf Scholtz, whose office in the Rathaus building looks more Palace of Westminster than London's City Hall.

Mr Scholz said cities like London could do more for their citizens if they had the power he has.

For example, if Hamburg decides housing is a vital part of the city's economic strategy and it wants to build more affordable housing in the city, "we can do it without asking others," he said.

"If we think there is a new strategy necessary in the case of vocational training we can do so. If we think we think we have to build new universities we can do so," he continued.

More affordable housing for London was one of Mr Khan's election promises and is an area he is hoping Wednesday's Autumn Statement might help him with.

But Hamburg's mayor does not need any more powers for this . He can and has already forced developers to ensure that a third of homes built on state-owned land are social housing, a third affordable and a third privately sold.

In terms of skills, Hamburg also has powers to support key industries that are not devolved to cities in the UK.

In Hamburg aviation is big business, employing 40,000 people. The local authority spends some of its funds on universities to help train the population in skills required by firms such as Airbus and Lufthansa Technik, as well as the hundreds of small and medium sized businesses that feed into them.

Image caption,
Londoner Brian Melican, who lives in Hamburg, says there are pitfalls to devolution

Uwe Gröning, who runs Innovint - a company that builds aircraft interiors such as galley trays and child safety seats - said giving local politicians the power to influence the city's skill base had been good for businesses in Hamburg, and it could do the same for London's big industries.

He said: "A centre for aviation training never would have been established with the national government, but with the regional government, Hamburg said 'yes, we need it, we do it'. That's the difference - London has to establish those powers."

There are pitfalls though to London getting too much local power, according to Brian Melican, who is originally from Wallington, south London, but has lived in Hamburg for eight years.

The journalist, who writes about regional government and industry, said as a city state Hamburg placed too much emphasis on supporting specific industries and ignored others, and London might do the same given the chance.

"If you make the wrong decision, or you become too focused on one particular piece of infrastructure, or one set of skills, you run the risk obviously of ignoring areas of the economy or society that might become more important in the coming years," he said.

"An example here in Hamburg is the harbour. Hamburg [is] very invested in the harbour - [but] it would have been more sensible to pool resources with surrounding regions and open a deep sea harbour, which those two states have now done on their own, leaving us with this rather limited river harbour."

Mr Melican also cited the determination to fund a philharmonic orchestra, which was nine years late and left the city with a 700m euros bill, forcing the closure of city museums.

"So yes, there's a clear danger that if a small state or a city state gets its teeth into something that turns out to be far bigger than it can chew, it's left with the bill. Central government is not going to just step in," he added.

Mr Khan says more power "isn't about having a bigger share of the pie" but "deciding how that share is spent" and claims that when London thrives the whole country benefits.

More of the tax spending powers that Hamburg possesses are what London's City Hall is really after though. With all the talk of regional devolution from central government, that is becoming more of a possibility.

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