Anyone in favour of moving power out of Whitehall and making the UK less dependent on London’s economy will find something to interest them in the report about constitutional change published by Labour today.
Recommendations include giving local authorities greater financial security and tax-raising powers, “empowering Mayors” and a relationship between central and local and regional government defined by “as much autonomy as possible, as much cooperation as necessary”. But what might it all amount to? And where, in the event of a future Labour government, would London fit in?
The document, Blairishly entitled A New Britain: Renewing our Democracy and Rebuilding our Economy and compiled by a commission headed by Gordon Brown, is 150 pages long and mentions London nearly 100 times. Yet it tiptoes around fraught and crucial questions about London’s relationship with the rest of the country and how that might be altered without doing more harm than good.
Regrettably, even when making the case that “the south” as well as “the north” loses out from “an unbalanced economy” it recycles some of the old northern grievance tropes that of late have become all to familiar from Conservative and some Labour politicians alike, and certain news organisations and think tanks too. It is no surprise to find IPPR North prominent in the acknowledgements section.
London and the South East “enjoy double the average UK infrastructure spend per head” the report declares, frustratingly ignoring key factors such as higher land prices and labour costs in London and, in relation to transport, deploying that misleading old favourite the “per head” calculation when a “per passenger journey” one would produce a very different answer – certainly in relation to the capital, which, by the way, has Tube trains that have been running since 1973.
Halfway through, the report plays the Crossrail “it’s not fair” card, claiming the Elizabeth Line’s near £20 billion price tag dwarfs rail investment “in the North” – another populist favourite which cooly ignores the fact that half the funding for that project was directly raised within London and that much of the national government input will have come from taxes raised in London in the first place.
Some of the report’s other recommendations have a familiar, crowd-pleasing quality that sidesteps lessons from post-war and more recent history. Recommendation 11 says 50,000 civil service jobs – far more than the 20,000 the Tories aspire to – and more public body headquarters should be should be moved out of London, recalling Harold Wilson’s 1964 pledge to end the “drift to the south” by doing much the same thing.
The drift was not halted, of course, and, as Rishi Sunak’s Darlington “Treasury campus” might come to demonstrate, the main effect of relocating central government departments (which remain responsible for implementing highly centralised central government policies) can be to drain the local private sector of personnel rather than help with “levelling up” and, perversely, benefit businesses based in London as civil servants who don’t want to migrate seek jobs with London-based companies instead.
There is at least some recognition that not everyone in London is filthy rich. On wages, the commission report at one point blithely states that “wages in London are 30% higher than anywhere else in the country”, concealing the capital’s nation-leading poverty rates and the shocking fact that, as Trust for London has shown, more than half of poor London households contain people in work, but elsewhere it at least acknowledges that London’s high housing costs mean that disposable incomes here and in the wider south are “roughly the same” as in the north east.
The general principles on devolution of powers to localities and city regions are much more agreeable – had recommendation 3, for a “constitutional requirement that the political, administrative and financial autonomy of local government should be respected by central government”, been in place in 2020 the local authority known as Transport for London might have been spared the damaging and petty Whitehall micro-management imposed by Boris Johnson’s government.
However, there are missing links when it comes to how to rid the UK of its over-centralised governance and over-dependence on London’s economy and how to shape a nation in which power is more devolved and broad regional economic inequalities reduced.
The report criticises the Treasury’s “green book”, City of London investment strategies and national government R&D investment priorities, saying they all unfairly favour London, the South East and the “golden triangle” (London, Oxford and Cambridge), and even points out why this might be – because investing in London and the wider south east is a proven safer bet for generating the desired returns.
It has less to say about the proceeds of those approaches helping fund the rest of the UK or the concomitant counter-productive risks of trying to help other regions at London’s expense. It isn’t popular to say that London’s economic strength is vital to the whole nation, but, like it or not, it is the truth. As things stand, weakening London will weaken everywhere else too. That is the stubborn, self-perpetuating circle any “levelling up” agenda, including Labour’s alternative one, has to square.
We must concede that the backdrop politics to the report are delicate: Conservative “north London” jibes at Keir Starmer are as tired as they are cheap, but rebuilding the former “red wall” is critical to Labour’s chances of overturning the still-large Tory majority in 2024. To steal what Roy Jenkins said about Tony Blair’s task leading up to the general election of 1997, Starmer, miles ahead in the polls but with a long way still to go, must carry his Ming vase across a highly polished floor to victory.
Being seen to be nice about London could help his opponents make him slip, as surely as hinting too directly at seeking closer ties with Europe. Perhaps Starmer’s Labour does understand the economic importance of London but has thought it canny not to say so. You can bet the Treasury understands it, though – the Treasury Gordon Brown used to be in charge of.
Image from report cover.
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