Regional redistribution from the wealthy South-East to Britain’s poorer cities, towns and villages is a sensitive issue for Liberal Democrats. When Britain left the EU and English regions and the devolved nations lost their share of EU regional funding (part of the balancing gains to the UK that the Leave campaign successfully ignored) the imbalance of investment and funding between the wealthy south-east and the rest of the UK tipped further. Boris Johnson breezily promised to ‘level up’ the country, raising expectations that were shattered when he failed to follow through. Andy Burnham may be more serious about reviving our poorer regions, and we as Liberal Democrats will have to respond carefully.
I have had a number of difficult arguments with colleagues in the party about this over the years. Liberal Democrats are above all local champions, standing up for neglected communities within the areas they represent. When I and others have argued for larger regional transfers MPs and councillors have reminded us of the pockets of poverty in north and east London, Kent, Somerset and beyond. Our parliamentary party spreads broadly across southern England, but sadly has few champions yet for Lancashire, Yorkshire or the North-East. We’ve already heard some champions of London – not in our own party – protesting that ‘taking money from London’ would be a betrayal of Londoners’ interests. It’s hard for some of our own to resist similar responses.
OECD figures have long shown the imbalance between the richest and poorest regions in the UK to be sharper than in almost all other member states. The Thatcherite economic revolution closed many of the country’s industries, with deregulation leading to losses of regional financial institutions and companies. The Treasury has insisted on investing to reinforce success rather than reverse decline or trigger new hubs for growth – thus for example spending generously on rail schemes around London while resisting investment elsewhere. Our over-complicated and centralised tax system has meant that local government has lacked financial resources and has been squeezed by successive governments as an easy target for central cuts.
I’ve lived between Yorkshire and London for nearly 50 years, so have seen the gap widen. Saltaire is on the edge of Bradford: one of Britain’s richest cities a century ago, now one of its poorest, with a high level of unemployment especially among young people. More years than not I have paid more council tax on our house in Saltaire than our similar-size house in London – although the value of the latter has risen far beyond its Yorkshire counterpart. I now count the four-by-fours and Porsches parked in our street as I walk to Wandsworth Common station; a local Conservative leaflet has told me that 50% of the borough’s children go to private schools.
Bradford, in contrast, is the largest city in Britain without a main line station. Its Council is struggling to avoid bankruptcy. Its public services have shrunk to a point where most public toilets have been closed. The former council estates around the city centre, where houses that were sold off are now rented out as ‘houses in multiple occupation’ by absentee landlords, scarcely ever see representatives of public or governmental services, from police to health workers. Work and training opportunities are scarce; I recall 400 applications for the ten places in a local social housing association’s apprenticeship scheme. The last major local companies have been taken over by distant private equity. Wards have up to15,000 voters, so even hard-working councillors find it difficult to keep in touch. Round the edge of Bradford prosperous areas have their own town councils; but these are rare in city areas.
Our party is now developing a strategy for campaigning across the north. Good Liberal Democrat campaigning methods will as always take us some way forward. In Idle, one of Bradford’s industrial villages (where the Hockney family come from – Paul Hockney, David’s brother, was a Liberal Councillor) our amazingly hard-working local team have held all three seats in a delayed election caused by the sad death of Jeanette Sunderland during the Spring campaign. We can win pockets of strength like that, but we need a broader strategy to win seats across the region.
We need to be careful therefore how we respond to Andy Burnham’s setting out of his stall on devolution and economic revival. In principle he is right both about the problem and about the direction needed to mitigate it. We should focus on the design and the detail, not attack the underlying theme. Giving uncontrolled powers to mayors is not full devolution. Dribbles of money from the centre will never rebalance Britain; reform of our over-complicated tax system should be one of the worked-out proposals we should be putting forward. Better service delivery won’t be enough; we need to revive local democracy as well as local communities.
Economic recovery in the north is key to returning to prosperity, and rebuilding self-confidence and social engagement in left-behind communities is key to sustaining a liberal country. Much of the vote for Reform and worse comes from despair and hopelessness. If we are to expand beyond our current strongholds, we have to find a way to give these communities hope again.
* William Wallace is LibDem peer, a former vice-chair of the Federal Policy Committee and convenor of the party's 1997 manifesto team.
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8 Comments
I completely agree, we must constructively engage with the debate around devolution that has excitingly been re-opened. Institutional changes, such as moving No. 10 to Manchester, does not actually tackle the route of the problem which is ultimately to do with the lack of investment historically as mentioned.
Our party should suggest either renewing the council tax as it is based on 1991 property values. This structure places a disproportionate burden on lower-income households and less prosperous regions.
We could implement a proportional property tax – a flat-rate levy with a simple percentage of the home’s current market value with automated valuation models to update property values annually.
We should back re-industrialisation based on growing industries, such as green technology, and value strategic infrastructure investment, but pair it with employee ownership and co-operative models rather than state ownership. We should also have guaranteed local skills funding tied to actual employer demand in the area.
The Wandsworth four-by-fours and Porsches sitting on rapidly appreciating land while Bradford’s land values stagnates is exactly why the Liberal Democrats must be bolder in calling for a land value tax (LVT).
The New Economics Foundation’s proposal to replace business rates with a two-tier land-and-property tax would let councils keep the property (occupier) share locally like council tax, while land value revenue, concentrated overwhelmingly in London, gets redistributed nationally by need. This modelling suggests around 75% of areas outside London would see overall reductions in business tax burden.
Titus Salt made Bradford in his day. Now you say Bradford now has all foriegn owned companies. Is it possible that if our councillors throughout the country/north hear of companies being taken over by overseas companies we should fight to make them remain in UK hands?
Nigel Hunter:
There a difficult argument to make about foreign takeovers. Local companies are much more likely to provide local (or regional) economic leadership. US-headquartered firms see Bradford operations as a branch operation. Private equity takeovers focus on squeezing more profit out of their acquisitions rather than investing in the communities around them. The private-equity takeover of Morrisons, the Bradford-based supermarket chain, has disrupted its regional supply chain and so hit a lot of local firms whose relationships with Morrisons the previous owner had cherished.
William Wallace That is why I think Private equity should be tightly controlled when it comes to allowing them to buy companies . it disrupts the entire chain. Better to fight to keep our businesses and build up the support system that could expand in other directions. of expansion. WH Smith sold its shops off and they were rebranded. Now the USA private equity company are selling them off after making profit from them. UK should have 1st option on buying them back to expand, with good management.
@ Nigel
“Private equity must be tightly controlled..”
I wouldn’t disagree but is this Liberalism?
Peter Martin: It’s not economic liberalism, but it is social liberalism.
“Regional redistribution from the wealthy South-East to Britain’s poorer cities, towns and villages is a sensitive issue for Liberal Democrats. ”
is it ? London made a net transfer of £43.6bn in 22/23 and the SE £15.8bn. Every other region and nation was in deficit. I have not heard LDs complaining about that
William Wallace rightly identifies the deep structural inequalities that have left too many communities behind and recognises that devolution is part of the answer. But devolution should not be viewed as the destination—it must be the path towards a genuine constitutional federal settlement.
A federal United Kingdom would provide clear constitutional protection for devolved powers, ending the culture of central government dispensing funding in unpredictable dribs and drabs. It would give regions, nations and local authorities the confidence and certainty to plan for the long term, innovate in public service delivery and shape economic development around local strengths.
At the same time, federalism cannot mean every area is left to fend for itself. Every successful federation combines meaningful local autonomy with a fair system of fiscal equalisation. Wealthier parts of the country contribute to ensuring every citizen, wherever they live, can expect decent public services and opportunities. Redistribution is not a weakness of federalism but one of its defining strengths.
The challenge is therefore to replace Britain’s over-centralised model with one that devolves power, responsibility and revenue-raising, while retaining a transparent national mechanism for sharing resources fairly. That would empower local government to innovate rather than simply administer centrally determined programmes, while ensuring that no community is condemned to decline because of its geography. That is the constitutional prize Liberal Democrats should be aiming for.