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Putting English Devolution in Context: What Is It For?

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Putting English Devolution in Context: What Is It For? Written evidence from Dr Luke Cooper1 (EDE 37) Public Administration and Constitutional Affairs Committee The Evolution of Devolution: English Devolution Putting English devolution in context: what is it for? 1. This evidence statement draws on work undertaken at the London School of Economics as part of the LSE Local Brexit project2 and on-going follow-on research into the impact of UK regional inequalities on the British political landscape.3 Our evidence largely focuses on enquiry questions 1, 2, 4 and 8. Our assessment of the existing Combined Authority structure may also assist the Committee in developing answers to question 5. The Brexit referendum and UK regional inequalities 2. Both the 2016 Brexit vote and the 2019 General Election have brought considerable attention to the geographical diversity of the contemporary United Kingdom. Both the Brexit and Remain votes were wide, diverse coalitions, and the debate on their nature has been subject to tremendous political, as well as scholarly, contestation. But within this context, there is broadly agreement that regional inequalities in England were an important factor in the Remain/Leave divide. The Brexit vote has been described as a ‘revenge of the places that don’t matter’ due to how economically struggling towns and small cities, which have struggled to find a place for themselves in the post-industrial economy,4 rallied to the anti-EU cause.5 While Remain-voting inner city areas often have higher levels of deprivation,6 territorial - as opposed to interpersonal - inequality was an important predictor of the Brexit vote. Importantly, regardless of the Remain/Leave divide, there is now a political consensus on the need to ‘level up’. Moreover, amongst both the victors in the 2019 General Election (Conservative, SNP) and the losers (Labour) there is broad agreement on the tremendous political salience and importance of issues concerning economic inequality, identity, self-government and constitutionality, even if there are substantial differences on how exactly they should be addressed. 1 Produced by Dr. Luke Cooper (LSE Ideas) with input from Dr. Jose Javier Olivas (UNED, LSE IDEAs) and Ms. Christabel Cooper (data analyst and councillor). 2 Details of the LSE Local Brexit project can be found here https://www.lse.ac.uk/international- development/conflict-and-civil-society/current-projects/debating-brexit-at-a-local-level. The project also utilised data put together by the LSE Centre for Economic Performance. 3 Luke Cooper and Christabel Cooper, ‘“Get Brexit Done”: The New Political Divides of England and Wales at the 2019 Election’, The Political Quarterly, no. iFirst (2020), https://onlinelibrary.wiley.com/doi/abs/10.1111/1467- 923X.12918. 4 Italo Colantone and Piero Stanig, ‘Global Competition and Brexit’, American Political Science Review 112, no. 2 (May 2018): 201–18. 5 Andrés Rodríguez-Pose, ‘The Revenge of the Places That Don’t Matter (and What to Do about It)’, Cambridge Journal of Regions, Economy and Society 11, no. 1 (10 March 2018): 189–209. 6 Cooper and Cooper, ‘“Get Brexit Done”’. 1 3. Our qualitative research in Mansfield, Pendle, Ceredigion, Southampton and Barnet, each in different ways ‘proto-typical’ Leave/Remain areas, revealed both the political/geographical diversity of England and Wales and the importance of local identities to how citizens feel and engage with national political issues.7 The idea of living in a ‘left behind area’ or town is often internalised by local citizens. Our interviews in Mansfield and Pendle also contained a number of references to the North/South divide. We found that there is a certain sense of pessimism, insecurity and disconnect with political elites which were considered ‘out of touch’. In our discussion panels it was clearly expressed that while cities are doing well, ‘towns are left behind’, and that it was probably necessary to achieve a higher degree of political decentralisation so that policy- making would take into consideration local realities. Given the political significance of the fallout from Brexit it seems impossible to separate these issues from the question of English devolution. They pose important questions on how to make democracy at the local level more accountable to the demands of individual citizens. One way of thinking about this is the distinction between formal democracy, substantive democracy and the role of identity as the basis for a political unit (e.g. the existence of a London identity and community is an important justification for the GLA/Mayor).8 Devolution and ‘levelling up’: three key issues of relevance to the enquiry 4. The foregoing raise three broad themes for English devolution we will attempt to address: a. How is/should English devolution address/ing the regional inequality issue? b. Is English devolution changing the visibility of local government? Can it be expected to? c. What can English devolution reasonably be expected to achieve regarding regional inequality and what issues will it confront in doing so? Devolution and the danger of ‘levelling down’: fiscal devolution and local government cuts 5. The UK state is often recognised as highly centralised in relation to how it raises and distributes fiscal resources compared to other OECD countries. Due, however, to Scottish and Welsh devolution, the UK state is peculiarly now a UK-English state - a quality that 7 Jose. Olivas Osuna J., Max Kiefel, and Kira Gartzou-Katsouyanni, ‘Place Matters: Analyzing the Roots of Political Distrust and Brexit Narratives at a Local Level’, Governance, Forthcoming. 8 A simple way of thinking about democracy is the distinction between formal representation and substantive empowerment (formal and substantive democracy). Formal democracy refers to the institutions that provide citizens with political representation. Substantive democracy refers to a broader range of issues that concern the extent citizens are able to have ‘control’ over the forces that affect their life chances and wellbeing. Cutting across these two distinctions is the issue of belonging, identity, inclusion and symbolism. Alexis de Tocqueville called this the ‘habits of the heart’. In the nineteenth century American context, he saw this as defined by participation in local politics, religious conviction and family life. But regardless of what we think the ‘habits of the heart’ should be, we can, in all likelihood, agree, that they will have an effect on how citizens think about government and the quality of their political representation. On this see: Mary Kaldor, ‘The Habits of the Heart Substantive Democracy Afterthe European Elections’, Online resource, OpenDemocracy, (27 May 2014), https://www.opendemocracy.net/. 2 has been particularly clear during the 2020 Coronavirus pandemic with the UK government determining the rules for England-only. There are two key fiscal effects of this for how local government is funded. On the one hand, the funding formula is broadly redistributive and therefore mitigates against the effects of regional inequalities. On the other hand, local governments in deprived areas that benefit from redistributive funding are vulnerable to cuts and austerity. As a result, the cuts of over 50 per cent to the Department for Local Government and Communities budget between 2010 and 2016 was not evenly shared across local government. It hit those more dependent on the central government grant, which led to wide geographical differences in the scale of impact.9 6. There are two major dangers this poses to the levelling up agenda. a. Treating unequal regions ‘equally’. Since 2013 the UK government has allowed local councils to keep up to 50 per cent of business rates. In the context of the government’s delayed ‘Fair Funding Review’ some have pushed for councils to have 100 per cent control of their business rates. There is a very high danger that these reforms simply concentrate taxation revenue in already affluent parts of the country.10 They could also lead to a ‘race to the bottom’ in business rates, which rather than leading to a net increase in UK economic growth, creates ‘zero sum’- like conditions as areas effectively ‘snatch’ revenue from elsewhere. Rather than levelling up economic growth, this would create more geographical unevenness. b. Shift from discretionary to mandatory spending. With many local councils facing such high cuts they have unsurprisingly shifted away from discretionary to mandatory (the 1100 local statutory duties) areas of spending. This means the burden of cuts has fallen disproportionately on areas of local government activity which supports the social and physical infrastructure, e.g. private sector business growth and economic development, planning and developmental services, transport and highways.11 Problematically, these are precisely areas of local governments expenditure that can boost local economic opportunities and output, and are vital to the construction of ‘place centred’ plans for development (below). England and the ‘devolution deals’: the bias towards big cities 9 Mia Gray and Anna Barford, ‘The Depths of the Cuts: The Uneven Geography of Local Government Austerity’, Cambridge Journal of Regions, Economy and Society 11, no. 3 (29 October 2018): 541–63, doi:10.1093/cjres/rsy019. 10 Daniel Bailey, ‘Economic Renewal through Devolution? Tax Reform and the Uneven Geographies of the Economic Dividend’, Competition & Change 21, no. 1 (1 February 2017): 10–26, doi:10.1177/1024529416678069. 11 Mia Gray and Anna Barford, ‘The Depths of the Cuts: The Uneven Geography
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