Labour Party constitutional reform proposals

This week Keir Starmer launched a report for consultation entitled  ‘A New Britain: Renewing our Democracy and Rebuilding our Economy’.  It is admirably full of attitude survey results, international comparisons, and north-south contrasts.

The report has a solid narrative and an overall theme, and in this sense can be said to have a certain amount of clarity of purpose.

The emphasis is on what some might call ‘the real economy’ – industry and commerce, and small businesses, and social deprivation resulting from declining economic activity, especially outside London and the SE.

The ‘problem’ which the report focuses on addressing is a serious collapse in trust in the UK political and administrative system; which gets worse the further people are from London. It blames this not only on accelerated regional economic decline, but also on a corrupt and over-centralised governance system, where development and infrastructure proposals from areas distant from London, sit for decades at the bottom of the pile in Whitehall.  These conclusions have seemingly emerged in part from Labour mayors, and other government decentralisation processes around the UK over the last decade, where Labour leads. Rising Scottish and Welsh nationalism are also blamed in part on fiscal over-centralisation and mutual disdain with London.

The proposed remedies reflect the definition of the problem; greater participation of regions and nations in central decision-making (including a new second chamber of regions/nations to replace the House of Lords), moving central government civil servants out of London, and limited devolution of transport, employment support, and economic development spending decisions. One has to assume that the absence of basic detail behind the remedies means that they are still being worked through, (under cover of the report being ‘for consultation’; all the relevant consultees having already been consulted, it seems).

Criticisms of the report have so far focused on the absence of reform in electoral systems, scepticism about Starmer’s ability as future PM to overcome reform resistance, and a questioning of motives … of a Labour Party trying to regain UK electability by recovering ground from the SNP in Scotland.

These criticisms rather miss the point. Two indicative examples.

The report glosses over the fact that the reason why the last wave of ‘decentralisation’ (eg. bringing Andy Burnham to the limelight) made little difference is because it has merely meant local ‘involvement’ in Whitehall spending decisions. The fiscal power remained in the Treasury and line ministries. No change to that is proposed. He who pays the piper is still going to call the tune. The report is happy to compare the UK with other less centralised countries in the EU and OECD, but neglects to mention that in those countries sub-national government has its own income – taxes or fixed-formula grants. In the UK, 80%+ of local government income comes, micromanaged, from central government.

The historic Labour argument for keeping this system (even objecting to a reduction from 80% to 50%) has been that it enables major transfer income from rich to poor areas, to develop the latter.  By contrast the primary aim of the whole report is to argue that this system has failed in that objective.

Centralisation is also blamed for corruption. But corruption arises not from centralisation per se, but from a lack of accountability, transparency and from shockingly permissive procurement rules; at national and sub-national level. No reforms to those factors are proposed.

The report might make for a coherent narrative with popular themes for a general election, but as a programme to  improve the lives of people across the UK, persistently over the longer term, it is so full of holes the UK public is likely to be disappointed again. Perhaps Starmer’s underlying problem here is that the ideology of much of Labour, and many of its funders, necessitates centralisation and top-down, opaque government. Control freakery and decentralisation are unhappy partners.

 

* Paul Reynolds works with multilateral organisations as an independent adviser on international relations, economics, and senior governance. He is a member of the Lib Dem Federal International Relations Committee and an Executive member of Liberal International (British Group).

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13 Comments

  • Laurence Cox 7th Dec '22 - 11:58am

    It is good to see the Labour Party creeping towards constitutional reform, even though they are still far from embracing the most important reform, that of the election of MPs. Without a change to PR for the Commons, everything else is so much window-dressing, and it is up to the Liberal Democrats to demand it. That means it must be in our next GE manifesto and our Party leadership must be left in do doubt that it is a ‘red line’ for any C&S agreement in the event of no party having an overall majority. We were let down by Nick Clegg the last time that the Party had the opportunity to bring about this change; the Party must make it clear to the Parliamentary leadership that a second failure would be unacceptable.

  • Laurence Cox is spot on. The Labour announcement on constitutional reform could have come straight out of the Blair/Campbell playbook.

  • Paul makes the essential point that “He who pays the piper is still going to call the tune”. LibDems should support moves towards decentalisation of power to local authority level but with it must come meaningful decentralisation of tax raising powers and funding.

  • Helen Dudden 7th Dec '22 - 7:21pm

    I feel that are we going to have more of the same?

    The House of Lords is not fit for purpose. We will all be aware of the very recent deployment with regards to the fast tracking. I agree, that as much as possible must be collected to be added to the Public Purse. If it was gained illegally, it should be returned

  • Andrew Tampion 8th Dec '22 - 6:55am

    Joe Bourke is right to point out that money talks. I believe that at the moment about 80% of Local Government finance comes from Central Government. As long as that remains the case devolving power is merely window dressing.
    A Land Value Tax combined with a reduction of Income Tax would help. Reforms to business rates would also be useful. But since there is a vast disparity between the funds that different authorities could raise from these sources this would not in itself solve the problem because poor areas would still need support.
    This is why a genuine levelling up policy is vital. One example is changing the fomula for funding public schemes like railways should be Party policy. The current scheme favours rich areas like London and the South East.

  • Rif Winfield 8th Dec '22 - 8:03am

    I know I am only echoing the point that Laurence and others have made, but the lack of any mention of electoral reform is ominous. In spite of the fact that the overwhelming majority of Labour members have supported its introduction at their party conferences, it is clear that the Labour hierarchy now see no reason to bring it in, convinced that Labour is now on track to win the next General Election outright, without having to make what they believe would be concessions to smaller parties. We need to reinforce the message that voting reform is about justice for the electorate, not for political parties.
    And while the need to replace the House of Lords by an upper chamber totally elected by the nations and regions is fully in line with our own thinking, we should ask exactly how the elections to that new body would be conducted, what voting system would be used, and in what way would the mandate for he new body differ from that of the Commons.

  • Paul Reynolds 8th Dec '22 - 11:47am

    Thanks for the well-informed comments. There is an implicit political point in the article (as opposed to a public policy point) which is that the media have picked up the replacement (‘abolition’) of the House of Lords policy as the headline message. This has led to the reforms in the ‘Gordon Brown Report’ being labelled as constitutional reform proposals. In turn this has led to media and parliamentarians asking ‘what other constitutional reforms will Labour propose?’, and criticising the whole report on the basis that voters do not demand ‘constitutional reform’ on the doorstep, (and thus Starmer is wasting his time on this). Others have asked why electoral reform is missing, among constitutional reforms. However, it is economics and declining incomes, especially in the regions, which is the central subject of the report …. and indeed the major concern of voters. This is the point often missed. Decentralisation and parliamentary reform are positioned in the report as a necessary-but-insuffcient set of reforms in this context. Thus, effective criticisms and political responses until GE2024 are best focused on whether the reform proposals will address the economic problems that are described. Political parties would be wise to avoid responding to the wrong thing. Otherwise they may leave an open goal for the Labour Party. Liberal Democrats take note !

  • Peter Hirst 8th Dec '22 - 1:46pm

    Though I have not read it, a reported lack of Westminster electoral reform and proposals for more deliberative democracy are significant. Offering something and denying the real openers seem like the usual Labour pledges. We need commitments for at least the former in legislative proposals within 100 days for it to be acceptable for any sort of arrangement post the next GE.

  • Nonconformistradical 8th Dec '22 - 4:05pm

    https://www.theguardian.com/politics/2022/dec/08/win-as-one-campaign-target-tories-seats-tactical-voting

    “A major campaign will target more than 60 seats to oust Conservatives by tactical voting, in order to build a Commons majority among progressive parties.

    Campaigners behind the drive are warning that Labour’s current poll lead is on “weak foundations” and the party must have a strategy for power sharing.

    The Win As One campaign from the thinktank Compass will campaign for candidates in 62 seats dubbed a “progressive tragedy” – where the combined progressive vote outnumbered rightwing parties but delivered a Conservative victory.

    The group will also prioritise candidates who are backing electoral reform and proportional representation. Labour conference in September overwhelmingly backed a motion calling on the party to embrace a proportional electoral system, though there is no guarantee the proposal will be in the party manifesto.”

  • Nick Hopkinson 9th Dec '22 - 11:10am

    Good Article from Paul and comments from Laurence Cox and others. The Labour proposals offer relatively little – its governance aspects will hardly help resolve our economic crisis (as Paul suggests).

  • Dan Falchikov 12th Dec '22 - 6:55pm

    The overcentralisation of the UK is one of the reasons for North/South inequality and needs to be addressed (particularly the role of the Treasury). However, any moves to allow local government to raise more revenue locally will be opposed by local politicians (including Lib Dems) who will shout ‘unfairness’ and ‘Tory cuts’. Look no further than Kingston council fore which the Lib Dems locally never cease to remind people gets no central government funding and raises 100% locally. There Lib Dem councillors are calling for a ‘fair funding settlement’ which means they get more handouts from Whitehall. Which is is?

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