Lord Shipley, Lord Tyler and Lord Wallace of Saltaire – written evidence (FGU0018)

House of Lords Constitution Committee Inquiry into the Future Governance of the UK

1. Liberals believe that government decisions should be taken as close to the people and communities it affects as possible. We also believe that an open and democratic society is one in which all citizens are encouraged to participate in public life. Liberal governments in the nineteenth century attempted to introduce home rule for Ireland, to be followed by similar proposals for and , but were blocked by Unionists who denied that sovereign powers could be divided. The Labour Government’s devolution settlement, after 1997, reflected the proposals agreed between Liberal Democrat and Labour negotiators in the Cook-MacLennan Pact.

2. We are concerned not only by current threats to the integrity of the UK, but also by popular disillusionment and disengagement from politics, most of all in England. The Liberal Democrats are therefore currently consulting party members on their preferred structures for a more federal England within a continuing UK, led by a working group which will present its conclusions to the next party conference. This submission therefore focuses primarily on question 3 of the Call for Evidence, though referring also to issues raised in qus. I, 2, 5 and 6. If Scotland and/or were to secede from the Union, the political case for reinforcing the ability of England’s regions to resist the dominance of would be increased rather than diminished.

3. We agree that the structure of the UK as currently constituted is coming under increasing strain. We also note, and regret, that the progressive centralization of taxation, administrative functions and powers within England over the past several decades has contributed to England’s excessive levels of regional inequality. Devolution to the UK’s other three nations has left England with the most centralised structure of governance in any developed democracy – in sharp contrast, for example, to the United States, Germany or even France. The UK has wider disparities in income per head, life expectancy and other factors between England’s south-east, including London, and its ‘left behind’ regions and communities than any other advanced democratic state. This disparity has partly resulted from our over-centralised political structures.

4. The creation of a Parliament for England would do very little to reduce the sense of remote government for the large majority of the 56 million citizens of England. Nor, we fear, would further institutionalising the imbalance between England and the three devolved nations stabilise the Union. An English Parliament would dwarf those of the devolved nations. Devolution within England is therefore an essential part of maintaining the Union.

5. The current structure of government within England is the outcome of piecemeal changes over decades, intended to reduce the costs of local administration at the expense of reducing local autonomy and participation. London has greater devolved powers than any other region in the country. Metropolitan mayors are struggling to expand their powers and to gain a hearing in Whitehall and Westminster. Police and Crime Commissioners are unloved, and have contributed to a rising turnover of Chief Constables. Metropolitan Combined Authorities are being imposed on city regions, on a model that does not fit predominantly rural areas with towns. Continuing reorganization is further reducing the number of elected councillors and increasing the size of ‘local’ wards.

6. The financial resources available to local government in England are heavily dependent on transfers from central government. These have been sharply reduced since 2010, justified as part of the government’s austerity measures. The proportion of public expenditure controlled and disbursed by ‘sub-national’ authorities averages 40% across OECD member states; in Germany it is 50%. In the UK it is 25%. The UK 2070 Commission (sponsored by several English universities and others, chaired by Lord Kerslake) estimates that subnational elements of national government in the UK collect 3% of tax revenues, compared with 33% across the OECD – which means that transfers from central government are vitally important. The Barnett Formula, though increasingly challenged by critics as no longer appropriate, provides a formula for the scale of transfers to the devolved administrations. There is no comparable mechanism within England. Transfers are increasingly tied to specific programmes and purposes, and under the current government have often been subject to competitive application. The criteria for awards are partly opaque, open to ministerial bias in favour of target parliamentary seats, and subject to inadequate parliamentary or public scrutiny.

7. The coalition government in 2010 mistakenly dismantled regional elements of governance within England: regional development agencies, and regional centres of government. The current government has responded to evidence of popular alienation from London-centred government by proposing instead to move sections of central government departments out of London to other parts of the country. Moving limited numbers of officials without bringing policy-making, administration or accountability closer to the citizens they affect will however make very little difference to popular alienation. Regional devolution would move more officials out of London, while bringing them into much closer contact with the diverse communities their administrative decisions affect.

8. London in effect now has a regional government, though with limited financial autonomy, functions and powers, together with a number of subordinate local authorities. Outside London the current government is pursuing a pattern of metropolitan authorities, with elected mayors and secondary local authorities, and with single-tier local government in other areas. We favour extending the London model across England, with regional governments and local authorities both benefitting from a substantial devolution of power, functions and resources from Whitehall and Westminster. No other region within England has the political visibility to make effective representations to national government. The experience of metropolitan mayors so far has not demonstrated that they command the attention or respect of ministers and officials in Whitehall. We do not support a uniform system of directly elected regional mayors rather than accountable administrations (as in the devolved administrations); the city mayor model, which copies US practice, does not sit easily within the UK’s parliamentary tradition.

9. We do not share the government’s view that the units of sub-national government should as far as possible be of similar size in terms of population and metropolitan centrality. One size does not fit all; some areas, such as Cornwall or North Yorkshire (the subject of a contested current reorganization), do not have a metropolitan focus. Geography and community, or sense of historical identity, also matter, as the recent report from the All-Party Group on Devolution has argued. We recognise that these factors differ from region to region, and that the South-East of England presents challenges in terms of any form of devolution; this is included in our current internal party consultation. There is an active all-party campaign for ‘One Yorkshire’, supported by almost all existing local authorities in the region – which the government has determinedly resisted. There is evidence of support for a regional focus in the North-East and North- West, but much less elsewhere. We also recognise that effective sub-national government, in the USA, Canada, Germany, Spain, Italy and elsewhere is structured around units of diverse size and economic strength, reflecting different geographical, historical and cultural factors. Nor do we assume that all devolved administrations must have equivalent powers and functions; this is not the case with the existing devolved administrations, nor is it in some other multi-level democratic states.

10. Much of the policy discussion on restructuring local government within England in recent decades has focussed on the costs of democratic government and different layers of administration. We believe strongly in the value of democratic government, as close to those with whom it deals as possible. Popular disillusionment with England’s over-centralised system of government creates other costs to our national wellbeing and stability. The sharp reduction in the number of elected local councillors across England over the past fifty years has contributed to the decline in political party activity and membership, particularly of the Conservative Party, which has reduced from several million in the 1960s to a few hundred thousand today, with funding now flowing much more from the centre than from local members. Local, and potentially regional, representation expands democratic participation and brings politics closer to ordinary citizens. Centralised government in England has made MPs the focus of local lobbying on local issues, rather than focussing on national issues and the scrutiny of national government. We recall that in the 2004 Referendum on devolution for the North-East, Dominic Cummings used for the first time the persuasive argument that money could better be spent on the NHS – though neither after that referendum nor after the 2016 EU Referendum was there a significant increase in NHS funding. We argue that democracy itself has a value, which the current governance of England does not sufficiently reflect.

11. The UK is now facing a situation of acute constitutional uncertainty and potential change. The future relationship between England and the three devolved nations is in question. The future relationship between central, regional and local government within England is also likely to come under question. Political rhetoric about ‘levelling up’ and ‘building back better’ risks raising expectations that will be disappointed. Central government has invested more in London and the South-East through successive governments led by different parties. Without effective political structures to counterbalance the concentration of power and finances in London, the shift in policy and spending priorities needed to deliver the levelling-up agenda appears extremely challenging. The Treasury’s just- published Build Back Better Command Paper declares that ‘we want every region and nation of the UK to have at least one globally competitive city’, but fails to note the correlation between decentralised states and multiple poles of econm0omic strength. The Industrial Strategy Council, in its final report, has underlined the importance of local initiative in economic regeneration.

12. While we strongly support the transfer of wider revenue-raising powers for English regional and local authorities, the scale of the UK’s geographical inequalities is making the distribution, and redistribution, of financial resources among the different nations and regions of the UK one of the central issues of national politics. The importance or irrelevance of transfers from England is one of the contested issues in arguments over independence for Scotland. The government has declared its commitment to long-term investment in the poorer regions and localities of England. But the implementation of the promises made remains in the hands of national ministers, most of whom represent constituencies in the most prosperous parts of southern England. We want to move towards a visible political process of agreeing the redistribution of resources among different regions, backed up by regionally-responsible authorities capable, as the mayor of London is already, of making their voices heard in Whitehall. We note that bargaining over the redistribution of funds from richer to poorer regions is one of the processes round which German federal politics revolves. We envisage that a revised second chamber would be constituted so as to represent the different national and regional voices in the UK debate.

13. Liberal Democrats support the creation of a constitutional convention to formulate proposals on the devolution of power and resources within England, and would welcome a Citizen’s Assembly as a means of encouraging a wider debate. We see this as an important part of a constitutional reform programme which would go beyond the scope of this enquiry. A significant devolution of functions, powers and resources from Westminster and Whitehall to regional administrations, as well as to local authorities, would shrink the number of ministers and officials in London. It would allow for a smaller national Parliament: an objective that a recent Conservative prime minister proposed, but without proportionately reducing the number of ministers within the Commons. It would widen the pattern of political recruitment, as politicians learned their skills and made their reputations outside the ‘Westminster bubble.’ It would provide a political counter-balance to the dominance of London in the country’s public life, economy and culture. We hope that it would also contribute to re-establishing trust in representative government and public institutions.

14. We recognise that wider issue of executive dominance, limited government and the principles of constitutional democracy lie behind the issues raised in this enquiry. There is also a fundamental question of what we understand by sovereignty. Nineteenth-century Liberals argued, as had those who wrote the US constitution, that executive sovereignty must be constrained, and that it can and should be shared among different levels of government. A.V.Dicey, one of the most frequently-cited authorities on the British constitution, argued to the contrary that sovereignty was absolute and indivisible, and rested in the Westminster Parliament and the government which derived its legitimacy from its majority within it. The passion with which he argued this reflected his opposition to Irish home rule, which would have necessitated the constitutional devolution of powers from Westminster. Our current government describes itself as ‘the people’s government’, empowered by the 2016 Referendum and the 2019 election to assert executive power without institutionalised checks and limits in what Lord Hailsham once described as an ‘elective dictatorship’. From this interpretation of executive sovereignty, local authorities and devolved administrations are merely agents of the sovereign power, not autonomous actors in a multi-layer process of democratic representation and administration. Some form of new constitutional settlement will therefore be needed to protect whatever may be offered to England’s regions and local authorities in a more substantial, and more democratic, devolution of power and resources.

Lord Shipley. Chair Liberal Democrat working group on a Federal England.

Lord Tyler, Liberal Democrat spokesman on constitutional and political reform, .

Lord Wallace of Saltaire, Liberal Democrat Cabinet Office spokesman, House of Lords. 27/04/2021