Simon Parker is Director of the New Local Government Network.
In 1873, Joseph Chamberlain’s Liberals swept to power in Birmingham and embarked upon an era-defining programme of municipal reform. The council bought the local gas company and used its profits to reduce taxes and renovate the city, clearing slums and building infrastructure. The rugged laissez faire of the early 19th century was replaced by a new municipal gospel of civic activism.
Chamberlain’s period as mayor of Birmingham was not as novel as we tend to think today: gas and water municipalism was already well-established in other parts of the country. But his unique energy and his ability to tell a clear philosophical story about his actions nonetheless made Chamberlain a totemic figure. His reforms laid the groundwork for future generations of municipal socialists and inspired city leaders down the ages.
His was a politics which infuriated the dry free marketeers of his day, but which now finds a surprising echo in the policies of our new Prime Minister as she seeks an economic model for the post-Brexit world.
Theresa May’s campaign launch speech – not coincidentally given to an audience in Birmingham – included an incongruous name check for a man who was never actually a Tory. It was infused with Chamberlain’s sense that state power needs to be put at the service of commerce and growth, and that commercial interests in turn have a moral duty to contribute to the public realm.
But Birmingham is symbolic for another reason. This was a city which voted to leave the European Union, part of a region where economic growth has fallen starkly behind the national average. It is the sort of place that Theresa May must have meant when she argued that we have to improve the productivity of all of our regional cities through infrastructure investment and a new industrial policy. It is the sort of city which must be restored to its former glory if the British economy is to thrive post-Brexit.
So what might a neo-Chamberlainite policy look like? Birmingham’s mayor thought that the city was the natural level for securing social justice: big enough to transcend social and community boundaries, small enough to create a sense of community. This remains the case in both social and economic terms. Towns and cities have a critical role to play in improving productivity by putting the right infrastructure in place, promoting human capital and creating a good environment for business innovation.
May should continue George Osborne’s policy of handing power to Chamberlain’s contemporary equivalents, and increase the amount of money that the Government allocates to capital investment to stimulate regional economies. In a new report that NLGN releases today, we argue that the new Department of Brexit should ensure that many European powers go straight to local government, bypassing our already over-centralised national parliament.
Cities need more control over their local finances, but current plans to devolve some control over business rates actually create an incentive for councils to encourage the development of low productivity business which consume a lot of floor space. May should consider devolving an element of corporation tax, which would be a better way to incentivise the creation of higher value businesses.
May must also recognise that public service reform is critical to better productivity. As Chamberlain well knew, squalor and ignorance do not breed self-help, so we need a new effort to raise levels of skills in the workforce and encourage employers to utilise those skills, creating higher value, higher paid work. This needs to be combined with a clear industrial policy focused on promoting innovation within British regional economies.
Ultimately, the only way to make such an ambitious agenda for regional economic reform work against the backdrop of an all-consuming process of Brexit may be to create a new secretary of state for growth and devolution. This would provide real focus on the business of reforming England’s regional economies. If May cannot find the right MP to take on the task, she could do worse than find a way to elevate some of her party’s local government leaders to senior ministerial briefs. Shire Tories in particular are often instinctive Chamberlainers.
Chamberlain’s was a muscular, Christian politics of creating the conditions in which the poor could help themselves. His was a mayoralty that brought vast improvements to the fabric of Birmingham, a thorough modernisation of a city still struggling to cope with the consequences of its industrial boom. His famous promise was the city would be ‘parked, paved, assized, marketed, gas and watered and improved’. Listen for echoes of it next time Theresa May speaks.