The British economy and hence the politics of Britain are London-centric. Of this there is no doubt. Gross Value Added figures, which show the value of goods and services produced by the different regions of the UK highlight this perfectly. The Gross Value Added figure for London is in excess of £37,000 per head of the population. The only other region which gets above £20,000 is the South East.
The gap between London, the South East and the other regions of the UK in terms of economic power and hence influence, is widening by the day. Government after government have used the trickle-down economic argument for saying a strong London means a strong UK. Time after time, this argument fails. A radical change is needed if this process is to be arrested – or even slowed. The UK needs ALL its regions to be buoyant, efficient and net contributors to its economy.
he last Labour government introduced Regional Development Agencies which were beginning to show signs of bucking the London-centric trend before they were scrapped by this coalition government. In their place, Local Enterprise Partnerships and City Regions have been introduced. Labour, if they return to power in 2015 have said they would build upon these by devolving up to £4bn to city-regions. This may have some effect, but this approach, as with the RDA’s and the current coalition arrangements miss the point. None of these have any democratic mandate and are dependent on the whims of central government. Also, the City-Regions are not big enough to influence the overall economic strategy of each region.
Our country is one of the most centralised countries in the developed world and the Liberal Democrats should be at the forefront of the argument for changing this. Too many economic decisions are made by considering the effects it has on London. The possibility of a Parliament for England has been mooted particularly if the Scot’s vote ‘Yes’ in the referendum. How would this be any different to the status quo? Wherever the parliament is based, the central problem would still be there – its decision making would be heavily influenced by needs of London because of the sheer size of its economy.
No, to begin to address the regional balance we need to be brave and radically re-think our model of governance. Our model of government is little changed from 100 years ago when the influence of London was nowhere near as great and the economy as a whole was much more balance by region. We need devolution for the regions. By devolution I do not mean the talking shops that were proposed and rightly voted down under the last Labour government. I mean assemblies with proper powers which allow it to set its own economic and transport strategy, its own tax-raising powers – obviously in negotiation with and in cooperation with other regions. This way, my own region Yorkshire for example can make decisions on its future based on the needs of Yorkshire and the skills we currently have or want to develop, rather than the current London-centric model.
These assemblies need to be democratically accountable. I would not expect these to be an extra layer of governance, but possibly instead of some of the layers of local governance we already have and allow a reduction in the number of national MPs because of the devolution of decision making to the regions. Some of the most successful economies in the world have a much more federal structure – economies like the USA, Germany, Canada to name just three.
I am sure many people reading this will see many holes in my initial arguments and some will totally disagree, but we have to address the regional imbalance in our economy and the democratic deficit at the heart of it. The Liberal Democrats can and should be at the forefront of this.
* Wayne Chadburn is a member of the Liberal Democrats and Penistone Town Council
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29 Comments
Part of this argument seem a bit odd. One region produces more value more efficiently than others, and we somehow conclude that that is a bad thing? Even unfair on the other regions? It doesn’t work for me!
I’m rather confused by this, the conclusion is roughly right but all of the supporting arguments are complete nonsense.
The factual inaccuracies are too many to pick out in one go. But I’ll just start with the idea that the UK governance is the same as 100 years ago. It shows a compete lack of understanding of history. There was less centralisation 100 years ago.
You can always find someone able to roll out the figures of how we ran a quarter of the world with half the civil service or some such cliché.
Lets advocate more devolution of power but to win that argument it will require accuracy with the facts.
The mechanics of how real devolution to the regions might be accomplished is up for study and debate, but the undisputed take-away from this excellent article is this:
“I am sure many people reading this will see many holes in my initial arguments and some will totally disagree, but we have to address the regional imbalance in our economy and the democratic deficit at the heart of it.”
I can see that devolution of democratic powers allows local people to have more power over government spending but I am not sure that this has much to do with where businesses set up or become established.
New technology businesses are setting up around Cambridge because of the skills of those at Cambridge University and the snowball effect.
Motor racing technology busineses set up in Northants and Oxfordshire because of the Silverstone track and then the snowball effect.
Clearing banks set-up in London because they needed to be within walking distance of each other to clear cheques. Similarly Lloyds brokers needed to be near the Lloyds underwriter.
No devolution would have any bearing on the business reasons for companies to establish where they do.
Yorkshire would be advised to promote its own competitive advantages for business (tourism would be one). But having a devolved Yorkshire government might be seen as a disadvantage if the decentralised government was less cost efficient and had to load more taxes on business.
It is up to local areas ro ensure that their localities do not get in the way of their competitive advantages.
” The Gross Value Added figure for London is in excess of £37,000 per head of the population.”
What does the Gross Value Added figure mean.
Does it include the earnings of companies that are headquartered in London, but earn most of their earnings in the regions. Where are all those profits allocated to?
Does the North East, North West and Yorkshire, have the value of ‘ THEIR’ offshore oil and gas production and the associated Petroleum Revenue Tax added to their economic output. We are constantly reminded that when it comes to Scotland it is ‘THEIR’ Scottish Oil and Gas,
When it is England is it just British earnings to again be ascribed to London.
Any attempt to regionalise England, in order to remove its dominant influence, because of some bizarre idea that Scotland, Wales and Northern Ireland should have equal weight, will not get off the starting blocks, especially in light of the deliberate policy of all three Westminster parties putting into law, the most dishonest , deceitful and undemocratic devolution settlement that could have been designed, clearly aimed at emasculating England.
To be honest you would just not be trusted on any proposal for dealing with the governance of England problem, simply because you have shown where your loyalties reside.
If the union is to continue, then the only solution is a fully federal system with a parliament for England in somewhere like York. London should be politically separated from England, which culturally and socially it already is to those in the regions, , and for it to be given the same sort of status as Washington DC in a fully federal system.
The key to levelling the playing field for England is to remove the governance of England from Westminster completely. Otherwise whatever cobbled together scam they come up with, decisions by Westminster based (British) politicians will always give priority to London ,Scotland, Wales and Northern Ireland at the expense of England, that is a fact that is embedded in the very bones of the body politic, and the evidence for the betrayal of England, can be found in Hansard going back decades.
How about a travelling parliament? Meeting in say York one month, Derby another, Pembroke, Portsmouth, Inverness, ….?
Presumably if London and the SE can set their own taxes they will be able to reduce them and stop paying subsidies to the rest of the UK ? Seems an odd thing for a lIberal to want.
This is an idea whose time has come. When the Scottish Yes campaign has been narrowly defeated despite moral victory, the Tories and Labour will sneakily pull all their devo-max promises back off the table. Then the SNP will loudly cry foul, and vow to carry on their Home Rule campaign until they can win at the second attempt. Then people like Farage, the English Democrats and the Tory Right will jump up, and shout that it is high time we heard from the English for a change, and that we should demand an English Parliament.
An English Parliament would be a dreadful idea. It would further act to secure the dominance of London and the resulting penury of the rest of the UK, irrespective of where it was located. (Europe isn’t run from Strasbourg, or even Brussels: it’s run from Berlin, of course!). An English Parliament would totally overlap with and thus usurp the functions of the Westminster Parliament. Our leading politicians would abandon seats as MPs as Westminster in favour of seats as M(Eng)Ps. In a decade or two, an English Parliament could well be the catalyst for the break-up of the UK into four nations.
Fortunately the English Parliament has one flaw, the same flaw as that which sunk John Prescott’s attempt to begin devolution to the English Regions in the North-East. It would mean a whole new extra layer of politicians to be paid for by the taxpayer. The unpopularity of that idea was why Prescott lost his referendum, and if the English Democrats and their friends get their way, that is probably why they also will lose their referendum.
It follows that if we are to create Regional Assemblies, then we must ensure that they take over most of the functions of one tier of local government, and replace that tier. We need just a single layer of unitary local authorities below that. If we retain only that single layer of unitary authorities with professional staff and with (cheaply) publicly-funded Councillors, then we can successfully argue that we are not creating new costs. That is the only way we will ever be able to “sell” the idea to the voters.
Will such a system work? A big drawback could be that, if the smallest electoral ward or division in a unitary authority covers tens of thousands of electors, then genuine localism would be lost, and all Councillors would have to become semi-professionals. That is a real concern.
So to help place the final piece in the jigsaw, I’d like to boast of my own membership of Britain’s most successful form of local council – the Parish Council. While our Borough Council endlessly bicker and play party political games, it is the unpaid unpolitical volunteers on Parish Councils who actually get things done, at the village level. Everywhere should have a Parish Council. (And for those who, unlike me, don’t live in a prosperous village, such a Council should be supported by professional assistance from the unitary body).
Regional Assembly, Unitary Council, Parish or Neighbourhood Council. That’s a structure to share the benefits of devolution equally throughout the UK, and to reverse the destructive suction of all wealth towards our central “black hole” of London!
To be honest, this could all be achieved relatively easily with the English Devolution on Demand policy which we’ve now adopted, provided a few tweaks to it were made.
At the moment any group of principal authorities comprising 1 million or more inhabitants would be able to ask for devolution under the law, with the exception of Cornwall which would get it automatically with just over 500,000 inhabitants.
But if the threshold were lowered to 500,000 then devolution on demand would slot a lot more naturally into England’s cultural, local and political make-up. Obviously, the massive city regions of Greater Birmingham and Solihull, Merseyside and Greater Manchester could easily demand devolved assemblies anyway. But other places, particularly almost all the historic counties, could also demand devolved assemblies which would effectively replace county councils and which could then reorganise local government beneath them.
In my own Surrey, for example, Surrey county council would become Surrey Assembly and I expect the borough councils would then be reorganised to form large unitary authorities with the same numbers of councillors as they have now. The massive decentralisation of power from Westminster would be achieved without creating another layer of government on top of existing local government – which I think would provide the best of both worlds.
Thanks to those who have commented on my piece so far. Clearly I haven’t made a good enough (or accurate) argument for most of thos e who have commented so far. I’d like to clarify a few things raised in comments so far. Firstly I’m not criticising London for being the most powerful economic region in the UK – the argument I’m trying (possibly badly) to make is that decision making in Westiminster is more London-Centric than it has ever been – and this is becoming more pronounced. As for governance being the same as 100 years ago – maybe my choice of words could be improved, but the commenter makes my point for me – we had a parliamentary system 100 years ago like we have today – very (not exactly I grant you) similar to that now, but as the commentor says, decision making has become more centralised and this, in my opinion, is not good for democracy or the other regions who, because of the way things are currently structured, tend to rely on the crumbs from London’s table – again not a criticism of the London economy.
Regional democracy will allow areas of the country to set their own economic priorities and plans and hence have more say in what works best for their economy. Transport is a perfect example of where the current system doesn’t work – London receives over £2700 per head nearly four times the amount the next highest region (the South East) receives. My own region, Yorkshire receives just £200 whilst the North East gets just £5,
The current system is expanding regional inequalities not arresting them. My piece is just opening the argument for a possible other way forward. Not one that adds yet more layers of bureaucracy – the model suggested by Mr Allen in his comment is more along the lines I would contest could work. This can’t be done the way Labour are proposing – the city regions are too small to be viable.
As I say, I believe the Lib Dems should be at the forefront of this argument. The case for devolution for the regions (in particular the North – though I would prefer to see the three Northern regions as separate entities) is well made in the report from the Hannah Mitchell Foundation and I recommend people read this at http://www.hannahmitchell.org.uk/2014/08/23/for-the-north-and-a-federal-britain/
>”Regional democracy will allow areas of the country to set their own economic priorities and plans and hence have more say in what works best for their economy. Transport is a perfect example of where the current system doesn’t work – London receives over £2700 per head nearly four times the amount the next highest region (the South East) receives. My own region, Yorkshire receives just £200 whilst the North East gets just £5,”
How? The only way Yorkshire can receive more than £200 per head is for the money to come from elsewhere ie. London, or are you saying that Yorkshire generates sufficient economic activity that if the revenues weren’t diverted to London (or elsewhere) it could be used to cover increased local transport expenditure?
The massive centralisation of British political systems and governance took place during the first world war as a means of mobilising the entire country towards the single objective of pursuing the war. Once the war ended, however, there was no surviving liberal, decentralising force in government to restore the previous system that worked in peacetime.
So, it would perhaps be wrong to say the UK’s system has been stuck for 100 years. A true pedant would say that it has been stuck like this for 97 years, since the Lloyd George ministry towards the end of the first world war. It is perhaps telling that the failure of any government since to reverse this coincides with a near-century of decline and a repeated failure of Britain to ‘win the peace’, while still remaining able to win, or at least survive, wars from time to time.
Decentralisation is the important step that needs to be taken to build a government that can deliver for the localised needs of the people. Not some English Parliament that just replicates all the overcentralised unitary power of Westminster at an 85% scale, but real regional centres of power and influence that can deliver for each region’s unique needs. We’re already halfway there, having recognised that London’s needs are not the same as the rest of England’s – the reason why it has an Assembly to itself. The next step can be taken any time now.
Roland,
In all economies, wealth naturally grows at the economic centre at the expense of the periphery. In a functioning democracy, the periphery has some power to protest, and as a result, mechanisms such as the Barnett local funding formula are put in place to reduce the disparities. (Europe does not have good enough mechanisms, which is why the German centre is not doing enough to help the Spanish and Greek periphery).
Scotland gains funding via the Barnett formula, and gains more control over the way its funding is spent via the Scottish Parliament. These two mechanisms are not mutually exclusive, they are self-reinforcing. Scotland thereby gets a moderately good deal, though not a brilliant deal. London still retains most of its accumulation of wealth, as is clear from its fast-growing house prices.
Regional democracy should give the regional assemblies enough clout to demand – as the Scots are doing – that wealth and economic activity are more equitably distributed. You are right to say that control over Yorkshire’s own tax receipts and expenditure is not enough on its own. Regional fund transfer is essential too.
George Potter suggests an alternative devolutionary model which would make Counties and their equivalents the top regional tier, not larger Regional Assemblies based on several counties amalgamated together. It would be useful to analyse in detail how these two models might best work. My suspicion is that the Counties model might work rather better in terms of local administration, but wouldn’t achieve the same clout in terms of building up regional strength as a counterweight to the overmighty centre.
@George Potter
No, the ‘on demand’ policy adopted by the party is a complete mess. It won’t work. The last time serious devolution was on the table was in 1906-14, when the Liberal Government did grant home rule to Ireland – postponed alas by WW1 with the consequences we all know – and envisaged similar measure for Scotland and Wales. This had been in their manifesto.
My view is that we should put a proper regional government proposal on the table that includes devolving power from Westminster to the regions (with the consequent reduction in the number of MPs), abolishing all regional quangos and integrating their functions into regional government and establishing single tier local government where it doesn’t currently exist and ensuring that everyone has a parish or town council. Not only would this not cost more, but far more importantly it would introduce democracy where none currently exists in the myriad of quangos, joint authorities and trusts.
This should be in our manifesto and implemented without delay by a Lib Dem government.
“The last Labour government introduced Regional Development Agencies which were beginning to show signs of bucking the London-centric trend before they were scrapped by this coalition government.”
What signs were these? Can the author point to any. I thought all the data pointed the other way: that they were vastly expensive per job created and had actually presided over a further falling behind in GVA per capita relative to London.
Secondly, while I am in favour in principle of devolution – distributed power seems to work quite well with the German Laender for instance – the reality in Wales for instance has been abysmal. We need to analyse what has gone wrong there to see whether any development of regional government would actually achieve what is intended rather than merely asserting that it must necessarily happen. It is not just having the powers that matters, it is the quality of decision making that follow on from that.
There also needs to be a fundamental review from basic principles as to what is “fair” in terms of distribution of funding between regions in terms of net balance of taxation and spending, because devolved government for England would lay bare the inter-regional transfers that now take place but are currently all but hidden from view.
I’d agree with much that is said here, but perhaps one caveat? How much of the so-called London dominance is the result of a load of foreign money piling in? I don’t know – perhaps is zero.
My suspicion – and that’s all it is, I claim no evidence – is that if foreign money was taken out then the differences would be much less pronounced. Whether the flood of foreign money into London is a good thing I will leave to the value judgement of others.
As a separate point, I do think that there is some overegging of the argument. London is not the only hot-spot in the UK.
Very good ideas here – but will not be acted upon by any dominant party when in government. Not in a meaningful way – look how this government has had to be dragged into giving Scotland more powers whatever the independence vote. The English Regions have no real powers left after the seizure of education etc by central government. Can we imagine the Regions making [being allowed to make] a strong case for economic independence as the SNP is doing? That is what is needed in order to build strong local economies over a long time period. Economies need certainties in order to grow.
The major media strands are fixated by central government and will work against local powers because those would make their agenda more difficult to promote and swing elections – as they conspire to do for more extreme parties when it suits them. The only way LD ideas could gain traction for regional government etc was by building our own electoral vote [as we were doing until recently] so we had a strong voice to be listened to. And who now reports positively on our good ideas which were for decades so good they were stolen by other parties?
Tony Rowan-Wicks – ‘Can we imagine the Regions making [being allowed to make] a strong case for economic independence as the SNP is doing?’
Actually my answer to that would be yes. Perhaps not in all regions, and the quality of the case might not always be consistent. But yes. I think that there are, ‘hot-spots,’ outside of London that could make such a case. Now, as someone else has rightly said, we should not get starry-eyed about localism and devolution. Things can go wrong – think house prices/house building. And fragmentation is not always a good thing. But I think the answer to your question is yes.
The best way to do this is, of course, another matter.
RC
I think you are right on the evidence on the RDAs In terms of Wales though I think Devolution in England to smaller blocks (Regions whatever) would be helpful for Wales. A lot of the excuses that a failing Welsh administration uses is that it is not due to bad policy that they under perform. If there were English regions who faced similar challenges but applied different policies then this would expose the situation and remove the excuses of bad politicians.
Wayne Chadburn
I think what would have been a better approach to your article, as I think most people here will agree with the idea of devoution is how to implement it. I dislike the idea of a Yorkshire unit as I don’t think it will be large enough and will exclude some areas that naturally sit within the economic grouping, it would need to have at least the Humber side area. Though I would advise keeping separate from the North West region (though encouraging Cooperation).
Also how do we stop it becoming a magnet of power sucking up power from councils and individuals? Perhaps have a mechanism of strictly limited length of time stitting (such as a more extreme French or Texan model) with certain councillors sitting in the assembly. If we were to progress down this path we would need to have a properly constructed Federal approach to stop turf wars and to prevent the up-suck effect that political institutions engage in. We could even impose restrictions on Westminster sitting to ensure it focuses on its remaining remit and is focused upon doing that well rather than stomping other people turf.
It is not an easy job and will be regarded as dull and “process” by most people so don’t be surprised if it is hard to enthuse anyone. If well executed it could bring benefits so it would be worth it.
Just a point I think London would fail fast on its own other regions would for a start not sell it water, the UK is stronger as a whole I see no reason someone in London gets £2700 per head and NE £5 per head where would London get its people power raw materials get real London needs support or they fail
Tony
“Very good ideas here – but will not be acted upon by any dominant party when in government. Not in a meaningful way”
That is why you have to arricve with the plann fully formed ready to go, but properly thought through and appropriately “red teamed.” Implement early before governemnts get used to the power and start to want more. Giving away power is easier to do at the start fast like ripping off a plaster, later the craving for more power creaps in .
Allan
Noone is suggesting implementing protectionist mini-states, I’m confused by why would would bother to argue against them. London thrives by being open.
As a side note another power that a region could be given is an ability to grant local work visas.
An interesting discussion – but one which in many ways still doesn’t address the full need for devolution and kind of supports my view that true devolution isn’t really understood by England.
Firstly, what’s the best level of devolution? For example, you have (in England) an education system which is set nationally. If you devolve power to regional assemblies, then where will this go? Ah, people say, it will stay at Westminster, for that is the main Parliament where it can be decided nationally. But it still results in having education voted on by Scottish, Welsh and Northern Ireland MPs, who may well know little and care less about GCSE results. Likewise, you have a seperate legal structure from Scotland and NI – but I presume regional assemblies will not have the power to change laws in the way it’s possible in Scotland. What you would have is effectively a glorified council, with little tax-raising powers, and laws still being voted on by MPs who don’t have an interest in them.
What the Scottish Independence debate has done in Scotland is move the discussion on. Here, we’re potentially looking at devolving more powers to Holyrood, and – in some cases – considering going further. What England really needs is a system where its own representatives can vote on policies which affect it – and that means an English parliament and probably a restructuring below it.
It also needs to ensure that the constituent parts of a federation are equal. That’s why, in the USA, both California and South Dakota elect 2 Senators, despite the fact that their populations are vastly different. Reform of the regions without a wider reform of the rest of the UK parliament won’t address this – in fact, it could actually make the problem worse. It means that, despite the population differences, the weight of views given to Scotland, Wales and NI have to be equal to that of England, otherwise the simple domination by England (and, by extension, London) will just continue.
Keith,
I would devolve Education.
Your US comparison ignore the house of representatives which is weighted to population, a much closer aproximation to the commons, the senate shoudl really be protecting states rights, but over time the focus has been on usual politicking.
Psi – it’s the Senate which debates and discusses constitutional issues and federal appointments, so ensuring that each state has equal representation in that.
Wayne Chadburn
The gap between London, the South East and the other regions of the UK in terms of economic power and hence influence, is widening by the day.
The power that you are talking about is not in the hands of the people of London and the South-East. It is in the hands of the business elite, and what remains of the Civil Service elite, after privatisation, which is based in London. Most people in London and the South East feel as disconnected from it as you do. Governments since 1979 have though the answer to most problems is privatisation, on the grounds this means competition and that “drives up quality”. As a result, control of so many things now has passed into the hands of big companies, often not even based in this country.
To put this as some sort of geographical thing is to miss the point. Devolution of what remains of government power after privatisation won’t do much so long as real power lies in the hands of the businesses of the City of London, which are no more under the control of the people of London and the South East than they are under the control of the people of any other part of the UK.
The reality is that this is a class thing, not a geography thing. Liberals have this habit of being afraid to talk about class for fear they might get mistaken for socialists, so they substitute geography instead. It is a bad habit, all it does is run away from the real issue.
Note, this running away from the real issue by pretending the problem is something else, something which it is easy to whip up sentimental emotions about, lies at the heart of the appeal of UKIP and the SNP. It is why what they want, also, will not achieve what their supporters think or hope it will. I would say UKIP are the most cynical about this, as those than fund them know what they are doing.
What was agreed on Yorkshire devolution at the York Conference? Does the party support a directly elected assembly for Yorkshire? If so how do we make that happen?
@David Allen 26th Aug ’14 – 11:36pm
“In all economies, wealth naturally grows at the economic centre at the expense of the periphery.”
Yes this was probably also true prior to 1830 when trade was largely constrained by the speed of the horse. Hence why we have market towns, shire towns and regional centre’s, each slightly more wealthy than the tier below on which they depended. Therefore I think any ‘solution’ based upon simple devolution to the regions and to urban centres is largely doomed to fail. Perhaps what is necessary is borrow from the Aborigines and have the control of a region overseen from elsewhere, hence control of the the London boroughs gets devolved to the regions. Such arrangements could also be applied to the regions…
Roland
“any ‘solution’ based upon simple devolution to the regions and to urban centres is largely doomed to fail.”
That depends on your view of how wealth is actually created. If you consider how much more wealth is created in Palo Alto or New York as opposed to Washington you will see proximity to power is not a requirement.
The cluster effect is vital however. London benefits from extensive transport links and a high concentration of research. Other areas of the country would benefit more from faster (and much more regular) commuter links between places. If we are to build HS2 I don’t understand why the 2nd leg (Lon – Brum) is the bit being fought over. If we are going to build it build the northern legs first.
Devolution alone won’t sole all the barriers to clustering, significant infrastructure will also be needed, but devolution will provide focus of the coordination of facilities to help clustering effects.
In the 19th century major northern cities, Belfast and Glasgow all were large enough to benefit from clustering, as the world has moved on so the clusters need to be bigger, hence the need to group cities. Despair at some kind of perpetual decline is not necessary.