Labour for Devolution reaction to the Budget 2021

With the pandemic slowly starting to move into the rear-view mirror, yesterday’s Budget was a real opportunity for the Conservatives – after a decade in power – to explain how they intend to overcome Britain’s gross geographic imbalances.

We can see now what the Tory plan for ‘levelling up’ is – and it’s clear that plan is grossly inadequate.

Moving part of the Treasury to Darlington is no substitute for a comprehensive plan for every part of the UK to make its own economic decisions rather than one Westminster politician deciding for everyone. Relocating an office is not the same as relocating power.

From the Special Areas Act of 1934 to the Industrial Strategy White Paper in 2017, Westminster policy-makers have long responded to our regional economic weakness with top-down attempts to shuffle growth around the country.

This has never worked and it will never work, but the government’s announcement of eight new freeports is more of the same.

Far from being a new solution, the UK had freeports until 2012 when the last five were allowed to lapse because they generated no tangible benefits. Nevertheless, the Coalition government then introduced 24 “enterprise zones” which offered businesses much the same incentives.

These have been proven to, at best, create new jobs that are overwhelmingly lower-skilled, or merely move jobs from elsewhere in the country, as companies chase the tax breaks on offer.

The Towns Fund and the Levelling Up Fund are the latest corrupt tools to bung money to Tory constituencies. Rishi Sunak’s well-off seat has been prioritised for cash, while some of the most deprived communities in the country have been left off the list.

Weirder still is that the Levelling Up Fund is a just fund to help certain places bid for another fund.

Places have no option but to beg for Westminster’s piecemeal money. Rather than a comprehensive funding settlement for all, this is how the government prefers to dole out money to communities. It enables Sunak and Johnson to get credit for local largesse, while retaining all the power for themselves.

These random pots offer minuscule amounts of money, especially considering the day-to-day spending cuts that the Chancellor hid in the Budget’s small print are yet again likely to fall heavily on local government.

The Conservatives frequently claim to be against red tape. That apparently doesn’t apply to local government, which is forced to spend its dwindling resources on jumping through hoops for a shot at centrally-administered funds.

The Conservatives also now claim to be against raising taxes on ‘ordinary people’ and cutting spending in a recession. This too apparently doesn’t apply to local government which will have to raise the most regressive tax there is and cut spending in this recession as it has every year for a decade.

Without increases to local government funding, we will see:

  • council tax increases that hit poorer households hardest;
  • yet more cuts to local services such as social care;
  • councils going bankrupt.

Policy needs to overcome the constraints to inclusive prosperity in each region and this can only be done by empowering those regions to take control of policy-making and decide what works for them. There was zero attempt in the Budget to do this.

The Tories’ plan for ‘levelling up’ is a PR plan. It contains too few resources, too few powers, too little trust in places to shape their own futures.

Why no English parliament?

Many have suggested that the answer to our unbalanced country is an English Parliament. The far-right English Democrats have made this their flagship policy. However, this is not the answer to Britain’s issues, for the following reasons:

  1. England (as one bloc) is too large for a balanced and fair Union to survive

Within our United Kingdom, England contains most of the population and contributes most of the GDP. Imagine an all-England Parliament, captured by parties like the English Democrats. What would happen if that group chose to unilaterally deny funds to the Union government? The reaction would tear the United Kingdom apart.

An English Parliament would drown out the other devolved assemblies, and make our Union more dysfunctional

2. We need to tackle regional inequality within England

Overemplhasis on London has left millions in our regions cut off from power and opportunity. With an English Parliament, this problem would become dramatically worse. This will only worsen the North-South divide. The poorest parts of England turned away from Labour at the last election. We have to give them the power and money needed to turn around a decade of austerity.

London would dominate an autonomous England, worsening regional inequality further

3. An all-England Parliament would only encourage separatism

The climate emergency, corporate tax evasion, workers’ rights, fair treatment of refugees – none of these can be addressed if we split ourselves up into ever smaller and smaller blocs. Yet an all-England Parliament would give separatists the platform they desire. How long would the United Kingdom survive? How would our progressive politics thrive? We need to reduce the differences between each part of our Union not highlight those divisions furthe.

4. Regional (and civic) identities deserve celebration within the Union

By only granting autonomy to England as a whole, our regional and civic identities would be drowned out. The North-South divide is far more vicious than that between (for example) that along the Anglo-Scottish border, either side of which sit communities long since forgotten by Westminster and the City of London. Millions of people are proud to be from Yorkshire, or the West Country, or their city or town, in addition to being British. Rewarding those identities with real power is the antidote to separatism and economic decline.