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Devolution in the north of England: towards a labour movement agenda

We need our democratic institutions to have the resources and powers to stand up to business interests, writes Unison North West organiser PETER URWIN

SALFORD City Council has recently launched an ambitious programme in pursuit of a fairer, greener and healthier city.  

The Salford Way will use the tools currently available to the council to pursue real improvements for the people of Salford.  

But much more could be done in areas like Salford that have principled socialist leadership, if subnational institutions had more resources and power to deliver on their democratic mandate.  

In the north of England, we need the “progressive federalism” agenda to address three key issues. 

First, we need a secure fiscal foundation for subnational institutions in the north.  

While proposals for the devolution of tax-raising powers — a tourist tax, for example — have some merit, we must be very wary of those calling for total fiscal devolution.  

We should keep in mind that the ultra-Thatcherite Institute for Economic Affairs has called for fiscal devolution as a means to end “handouts” to poorer areas and reduce overall public expenditure.  

The north has suffered the consequences of national economic policies that have brought us deindustrialisation in the 1980s and austerity in the 2010s.

The resultant high levels of social need cannot be easily met by our eroded and neglected economic base.  

What we need is not fiscal independence, but a secure, regular, needs-based transfer payment from the Westminster government.  

The Barnett formula is the basis for the Scottish government being able to decide to make more progressive choices than those made in England, most recently a proposed 4 per cent pay increase in the NHS.  

In contrast, local councils in the north of England have borne the brunt of spending cuts.  

We need fair funding for our subnational institutions in the north.  

The argument that London should leave us alone and let us look after ourselves might be attractive to some.  

It is the sentiment behind the creation of the Northern Independence Party (NIP) — which is getting some attention in the run up to the Hartlepool by-election.  

But in truth, fiscal independence is the route to a permanently under-resourced public sphere, and to dependence on capital for our income.  

The NIP’s mixture of social media humour and muscular northernness would be better employed behind a demand for a fair funding deal for the north.

Second, we need our subnational institutions to have the power to intervene in markets and make demands of capital.    

Regional economic policy in the UK has typically involved deregulation as an assumed route to economic growth.  

From enterprise zones to free ports, the rationale has been that investment can be attracted to less economically prosperous areas through tax breaks, subsidies and relaxing rules.  

The Northern Big Bang report by the Centre for Policy Studies and the Conservative MP Jake Berry is the latest iteration of this idea.  

But deregulatory regional policy has failed. It produces a bonanza for investors and little or no long-term benefit for our communities.

Instead, we need our democratically accountable subnational institutions to be able to respond to our wishes to have good secure jobs, and a clean and safe environment.  

They need the power to intervene and to regulate, not to deregulate. As North of Tyne Mayor Jamie Driscoll has argued, devolution should be about strengthening economic democracy.    

Third, we need subnational institutions to be accountable for the delivery of public services and free to choose to deliver them directly — in the public sector.     

In education, for example, many service providers are no longer properly accountable to the public through council structures.  

We need the devolution agenda to mean that academies, free schools and further education colleges are brought back under democratic control and can be part of a planned system of universal education provision.   

The recent decision by Andy Burnham in Greater Manchester to proceed with a franchising model for the city-region’s buses is an important development.  

It was the product of an effective grassroots campaign by the Better Buses for Greater Manchester group and the willingness of the metro mayor to stand up to the financial interests and the legal threats of the bus companies.   

It is very welcome that Greater Manchester is doing what it can within the law as it stands, but the combined authority is not permitted to operate bus services itself.  

Meaningful devolution should surely give subnational institutions the power to provide services directly within the public sector, subject only to the democratic consent of the public they serve.  

The outline of a distinct labour movement agenda on devolution could be found in these three demands: fair and secure funding, the power to regulate the economy and the power to directly deliver public services.  

A focus on these issues can help us avoid getting bogged down in issues of identity and structure.  

We should reject efforts to appeal to the north of England through either the crude adoption of British or English symbolism, or the prospect of an independent Northumbrian utopia.  

We should be clear that our vision and purpose for devolution is very different from that of others.  

There is widespread agreement that the UK state is currently too centralised, but there is very little scope here for cross-party consensus or a shared agenda with right-wing think tanks.   

The “cause of devolution” is not the same as the labour movement’s cause. But our engagement in this debate is important as it is a chance to shape strong, well-resourced and democratically accountable subnational institutions.

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