A Labour Perspective on Devolution & The Northern Powerhouse:
The North is home to 10.7 million people, 25% live in the Manchester Area and 21% in West Yorkshire Combined Authority. Over the last 10 years The North has performed below the UK ‘s average for contributed GVA. (13.3% compared to 24.5% London)
However, the economy of the three Northern Regions – North West, North East and Yorkshire & Humber is worth £ 289bn. (twice the size of Scotlands :-) & would rank 10th largest in the EU).
The IPPR “Yet the North of England continues to underperform “ Underperfomance and lagging productive growth has resulted in labour productivity at £26.88 per hour compared to a national average of £30.05.
Has the Region failed to properly ‘invest in success’? Ah yes, fear of success ....
Transport – North £166 ph invested compared to £332 ph average across the UK.
Connectivity - Separation restricts the build up of economic scale and weight that allows competion in a global economy.
Skills – Qualification levels are lower in the North acting as a drag on economic growth. It is estimated that over 50% of future new jobs in The North will require a qualification of at least Level 3, with only 5% of jobs requiring no qualifications.
The idea of a ‘Northern Powerhouse’ was first mooted by George Osborne in June 2014.
With regard to Osborne’s Infrastructure Pipeline 2015 :
18 Offshore projects = investment £17bn
27 North East projects = investment £5bn
33 Yorkshire & Humber projects = £7bn.
Out of a possible ‘pipeline’ £381bn covering 564 projects it is clear to see why our ‘Region’ should feel short changed.
What's Left of Labour’s Devolution Agenda?
During Labour’s Govt. they tended to address socio-economic challenges through a national framework. The LP’s manifesto 2015 included proposals to devolve powers, not only economic, but social into a 'New English Deal’ for local communities. With Jeremy Corbyn elected as leader from a platform on National Economic reform, and ‘new politics’ what does this mean for Labour’s fledgling Devolution agenda?
Corbyn claims that the Govt.'s drastic ‘austerity’ measures are a political choice and not an economic necessity.
The Govt.'s spending review is due in November and the practical implications of Labour’s anti-austerity will come under pressure.
Will the LP commit to challenge ‘fiscal orthodoxy’ and develop new policies to meet the future of financial sustainability for local authorites.
Corbyn’s Northern Future identifies the geographics of inequality though the solutions are almost all national: a new national investment bank, a national education service, etc etc but other than to relocate Govt. Depts. outside of London there is little detail of how local communities will benefit economically. Separate strategies driven independently from the centre rather than empowerment for The North by devolving and aligning the full range of levers locally to promote growth remains a risk to reducing local accountability.
Is the ‘state’ a substitute for private enterprize? Or is private enterprize a subsistute for the 'state'? (housebuilding, transport, education & academies) Will the dots join up to a devolution agenda of a decentralised statecraft?
What about local democracy?
With Corbyn’s focus on ‘a new politics’ it is likely that Labour will adopt new policies that seek to invigorate local democracy alongside democratic accountability. Corbyn has stated direct opposition to elected Mayors as a condition of Devolution, with all members of the democratic elected authority to have a strong democratic role, including accountability. It is hoped that the process for a constitutional convention will engage more actively with civil society, local authorities, business and the public. Electoral reform and reform of Westminster institutions are expected to be included.
As the Tory Govt. pushes ahead with its ‘Northern Powerhouse’ agenda, Labour’s approach to devolution and local governance needs to come into focus.
With a series of Govt. backed 'Devo –Deals' (Diva-Deals) expected this Autumn, the central versus local argument continues.
Old Labour Lines
Labour's pledge “To deliver the biggest devolution of economic power and funding to England's city and county regions for generations. ... too many parts of our Country are being left behind by the Tories... this means backing the cities, towns and regions ... the engines of growth ... not just urban areas but also rural areas. .. local areas will be in the driving seat on key decisions affecting their local economies with new powers over back to work schemes, to drive house building, to integrate, invest in and plan transport infrastructure. And we will also let city and county regions keep all the additional business rate revenue generated by growth.”
“Labours radical plans go much further than anything David Cameron and George Osborne are offering. The Tories scrapped the Regional Development Agencies, cut funding more deeply in the more deprived areas and have totally failed to rebalance the economy.”
So, as George Osborne makes pleas with China & Abu Dhabi to invest in Manchester & the Northern Powerhouse, with a £3bn Manchester project to deliver more than 10,000 homes. “UKTI has helped many northern business enter the Chinese market... the best is yet to come.” (Blue Bananas ;-))
They are inflaming cultural intolerance with proposals to refuse housing & other public services to people without proof of UK citizen status : http://www.theguardian.com/uk-news/2015/oct/11/immigration-checks-discri...
Meanwhile, the Construction Industry report that a 200,000 worker shortage threatens the Northern Powerhouse plans with an ageing and poorly trained workforce ..... the energy and utilities sector estimate 50% of their workforce are set to leave the industry by 2023 ... meaning 200,000 new recruits are needed to plug the gap.
In 2010 the Govt. scrapped Regional Development Agencies. This was a mistake. A piecemeal approach to correct this is marginalising many regions & communities.
Recently they gave 38 LEP’s (Local Enterprize Partnerships) an opportunity to bid for a growth fund worth £2bn in 2015/16. The LP believe this funding pot was too small to drive real change with no real attempt to build long term growth.
Crucially this required LEP’s & Combined Authorities to bid into a national process on an ad hoc basis – the exact opposite of ‘devolution’ as it denies local areas empowerment – to change and drive forward economic growth – it gives central Govt the final say on each and every project. These ‘deals’ have failed to embed economic leadership and strategic decision making at a sub-national level with most places opting for an ad-hoc arrangement that has no basis for binding decision making.
This Govts. stated aim of a Northern Powerhouse lacks real commitment and long term plans.
It was Lord Adonis that Labour commissioned to take Labour’s Agenda on devolution forward. Points raised were clarity on criteria, cornering country as well as City regions, a stronger focus on institutional change, the real capacity to change economic decision making and local leadership.
An approach rooted in civic democratic engagement with a united focus to deliver economic growth, including Employment Support, Transport & Housing, Skills, Business Support and in devolving taxation, for all regions that have a coterminous Combined Authority and LEP that can provide a strong strategic growth plan whilst also recognising that many local decisions need to be taken by local authority planning and neighbourhood regeneration.
An approach that Incentivises proper co-operation and strategic decision-making across a viable functional economic geography to strengthen collective decision making, accountability and the pooling & integration of resources.
The Labour Party has long time recognised the potential of The North. The last Labour Govt.'s Regional Development Agencies were charged with this task, and the ‘Northern Way’ transport compact (founded by three Northern Agencies) preceded the Northern Powerhouse by more than a decade; Northern Prosperity is National Prosperity.
Problems clearly remain, the lack of well-paid, good quality work, growth and prosperity built on higher wages, stronger productivity on a bedrock of solid foundations. Unlike the South East where high levels of inequality in pay and housing is growing only a divided community.
A progressive Northern Powerhouse must reach the pockets of all people living and working in the North, as well as a good quality of life, otherwise a trickle down economic model that has failed too many will be replicated."
Source: Labour 2015