Ed Cox is the Director of IPPR North
The Prime Minister’s announcement that there will be constitutional change for the rest of the UK as well as Scotland is welcome even if the timetable and process might be cause for concern. The so-called vow made by the Westminster party leaders earlier in the week to maintain the Barnett formula in the event of a ‘No’ vote laid bare the widening gap between what is now on the table in Scotland compared with any devolutionary measures being promised in England. And so it is right that the Prime Minister should open up this debate.
Barnett gives Scotland an extra 19 per cent public spending per head – some £1600. IPPR North analysis shows that in terms of spending on economic affairs Scotland has consistently spent nearly double that of any English region outside London and this has been a large part of the reason for its relative economic success. But the promises of fiscal devolution are perhaps more significant in the long-term: greater control over welfare and taxation means that the benefits of economic growth will be retained by the Scottish government and will provide Scotland with the kind of fiscal freedom seen in most other developed nations but currently denied to English cities and regions.
There is a risk though that discussions about English-votes-on English-laws and the whys and wherefores of an English Parliament will drown out a debate about decentralisation within England. Important as they are, such matters do not address the fact that there’s barely any difference in trying to govern a population of 62 million from London as a country of 57 million – English devolution has to go to lower tiers. Addressing the ‘English question’ and delivering devolution in England are two sides of the same coin.
Much is made of the rejection of a regional assembly in the North East ten years ago and the more recent rejection of ‘city mayors’ by a number of English cities. As subsequent evaluation has shown, a key part of this rejection was the sense that there was very little by way of new powers on the table and as a result both offers looked like bureaucratic tinkering. The Scottish debate has made it very clear, if there is real power at stake, people take a passionate interest. This has been true of London mayoral contests too. A new wave of city and county combined authorities would provide a very useful basis for significant new devolved powers.
At present, none of the main political parties offer much more than what is currently on offer to English cities: tightly negotiated City Deals and a slightly bigger unringfenced pot for economic development. Where there is variation, the Chancellor has promised a big slug of Northern infrastructure investment, Lord Adonis is proposing more business rate devolution and the LibDems a commission on central-local funding. But there seems little understanding in any party of the need for genuine local fiscal freedom rather than just more cash.
Many fear fiscal devolution within England. This is understandable. But in the same way as the Barnett block grant will need to be offset with any extra tax revenues raised and spent in Scotland, so any fiscal devolution in England will need to be balanced with the national tax take so that English citizens aren’t taxed from every angle. And there will need to be a more transparent formula for equalisation too.
Last week IPPR North published a detailed plan for English devolution: a decentralisation decade. Given the Prime Minister’s call for a much more rapid timetable it perhaps now looks a little slow-paced, but content is just as important as speed. English cities and counties deserve just as much freedom as Scotland if they are to drive economic growth, transform public services and, most critically, address the democratic tensions that the Scottish referendum has made so plain.