Intergovernmental Relations Within the United Kingdom

Baroness Drake Excerpts

Thursday 18th January 2024 Lords Chamber

[Baroness Drake (Lab)]

My Lords, the noble Earl, Lord Kinnoull, in his excellent speech, set out the history of the evolution of how the UK’s government bodies interact. He concluded with the observation, with which I agree, that it demonstrates a lack of focus on devolved matters over too many years and, even with a better structure, the challenge remains of how to use it to the advantage of our union.

Constitutions matter, but they need constant attention and occasional repair if their vitality and adaptability are to be sustained. The new intergovernmental relationship regime is a vital structural component of our union, but it will deliver only if it is accompanied by the right behaviours, culture and respect embedded within it.

The Constitution Committee observed in its 2022 report Respect and Co-operation that the shared governance of the United Kingdom requires more “respect and partnership” for the union to flourish, and that

“it must enjoy popular support in each nation, based on … common benefits accruing to all”.

The report also said:

“There has … been evidence at times of a unilateral approach to strengthening the Union, which has been insufficiently sensitive to its pluralism”


and:

“Prime Ministers have a critical role to play in making the new intergovernmental structures a success”.


Rather than simply asserting their reach, they should seek

“strong relationships between the four administrations”

and demonstrate a sensitivity to, and an understanding and consideration of, the interests of the people and their devolved Governments.

Similarly, Whitehall’s continuing traditional centrist approach to government is further confirmed by the asymmetrical levels of engagement by departments in intergovernmental meetings, evidenced in the noble Earl’s speech. His perceptive observation of negative symbolism in the responsibility for intergovernmental relations resting with the Department for Levelling Up, Housing and Communities, but not captured in its title, adds to the risk of the department’s broader responsibilities undermining the sharpness this vital area deserves.

Since the introduction of devolution in the late 1990s, politics in the UK has become significantly more pluralistic and less consensual. It is unfortunate that greater progress on reforming intergovernmental structures was not achieved before the challenges of Brexit and Covid-19 demonstrated their inherent weaknesses and contributed so much to the decline in trust. Even the best governance structures may not resolve fundamental differences between Administrations, but challenges have been building up over decades, leading to a discernible atmosphere of distrust and uncertainty in popular debate. I noted the comments made by the noble Baroness, Lady Fraser, about the Government’s disagreements with the SNP, but that does not exempt the Government from their responsibility to the citizens of Scotland and Wales in the union.

The success of the new intergovernmental arrangements will depend on how the Government and devolved Administrations operate them, and whether they are committed to achieving shared objectives, rather than simply managing—or choosing to accentuate—their differences. Take, for example, the UK Internal Market Act, passed without the legislative consent of the Scottish Parliament and the Senedd. The agreement reached, however, between the UK Government and devolved Administrations in response—to disapply the market access principles where the four Administrations agreed that divergence between the different parts of the UK was acceptable—was welcome. But then, sadly, we hear from the noble Baroness, Lady Andrews, that the opportunity that the common frameworks presented was never fully seized.

The Sewel convention is a fundamental part of the UK’s devolution arrangements. It provides that the UK Parliament does not normally legislate on devolved matters without the consent of the devolved legislatures. While the legislative consent procedure generally worked well from 1999, implementing Brexit placed it under great strain. At least nine Acts arising out of Brexit and impacting on devolved matters passed without consent.

We have seen the increasing use of secondary legislation by the Government to pursue policy, a concern captured in the excellent report, Democracy Denied?, by the Delegated Powers Committee. The convention does not apply to secondary legislation impacting devolved matters.

For the Sewel convention to operate well, good faith is required between the UK Government and the devolved Administrations. It is undermined if the Government refuse to seek—or choose to act without taking—all reasonable steps to ensure consent. I agree that it is also undermined if devolved Administrations recommend the refusal of consent to their legislatures for purely political purposes. I ask the Minister: what steps are being taken by the Government to demonstrate their commitment to the convention, recognising the loss of trust flowing from the exceptional circumstances of the last few years?

Finally, the question asked by the noble Earl, Lord Kinnoull, as to whether English devolved administrations will be an equivalent part of the devolved structures within the United Kingdom, is so important. The place of the governance of England in the union should not be overlooked. Greater decentralisation could address concerns about the governance of England, which is highly centralised, with greater regional economic inequalities compared with almost all other western European countries.

A new process of English devolution began in 2014, involving bespoke deals with local authorities; 10 areas have mayoral devolution, and every part of England could have a devolution deal if it wanted one. However, what is not clear is the extent to which the current processes will actually deliver improved governance and, more importantly, improve intergovernmental relations. It is, as the noble Earl put it, an “oh so important question”.

Inequalities of Region and Place

Baroness Drake Excerpts

Thursday 14th October 2021 Lords Chamber

[Baroness Drake (Lab)]

My Lords, I compliment my noble friend Lord Stansgate on his maiden speech. The Prime Minister has blamed previous Governments of all hues for lacking the guts to tackle regional inequalities, but politics cannot outrun economics indefinitely. The UK’s regional and subregional economic inequalities are major, increasing and far greater than exist in most other democratic advanced economies. Their origins go back to before the Second World War and are deep-rooted, entrenched and complex. They accelerated in the 1980s as the country transitioned into a service and knowledge-based economy.

In 2020, the Industrial Strategy Council published a research paper, UK Regional Productivity Differences: An Evidence Review, which confirmed the complexity of the challenge. In the forward, Andy Haldane, its chair, observed that

“reversing the cycle of stagnation is possible provided policy measures are large-scale, well-directed and long-lived.”

He added that

“none of these conditions has been satisfied”

but hoped that the report could

“help the Government in designing and implementing a policy response equal to that challenge.”

Reflecting on those criteria, “large-scale” means the inequalities cannot be fixed in five years, or even 10 years, or with insufficient funding or competitive bidding against criteria not necessarily reflective of geographical need. As the National Infrastructure Commission observes,

“Competing against other councils for multiple pots of cash creates a focus on the short term”


and “continuing uncertainty”. For many decades our productivity performance has been modest, and the major reason is the geographic problem. Geography is central to the solution, but in the UK we have so evidently not sufficiently addressed it. By comparison, Germany has been transferring about €70 billion a year for 30 consecutive years to level up the country internally.

Policies and resources need to be well directed. Increasingly informed commentary acknowledges that a new governance model is needed that is not just centralised on Westminster and Whitehall. The UK has one of the most centralised decision-making systems among OECD countries, but that brings inefficiencies when the UK is so economically imbalanced, resulting in national decisions made without a full understanding of their impact achieving different levels of success or impact, depending on geography. There needs to be greater decentralisation of decision-making and revenue collection, harnessing the understanding of need held by representatives, employers, universities and other key partners in different geographies.

Decentralising decision-making has to be backed by strong governance to ensure that it achieves what is necessary, and that will include building robust institutions, capacity and fiscal discipline in those geographies. Informed observers are also pressing the need to build a knowledge base of data, equivalent to that existing in many advanced economies, on the flow of public expenditure into regions, the quality and quantity of linked data and regional and sub-regional issues more generally. That could be utilised to make good policies, understand what works, measure evidence of success and define the need of a geography more objectively, mitigating the growing perception that the definition of need is becoming more political. I acknowledge the pioneering work the ONS is doing on its integrated data service.

Policies and strategic outcomes need to be long-lived, but that requires a broad consensus. Lack of policy continuity in the past and constant changes to institutions have contributed to regional inequalities persisting. The Government have announced a lot of funding initiatives, but it is unclear how they all co-ordinate. It is difficult to follow what flow of public expenditure will go to where, and for what. The Government have not provided the White Paper, the strategic plan, into which all those initiatives fit. We do not know the targets, the key milestones or the intended metrics for measuring success. We also do not have clarity on the governance model within which their plans will sit.

Finally, the decentralising of decision-making is extremely important, but it should be done in a way that does not prevent central government from discharging their role in directing and redistributing resources across the UK on the basis of need or common interest. We saw the importance of that central social role so clearly during the pandemic, and in response to large economic shocks such as in 2008.

Inclusive Society

Baroness Drake Excerpts

Wednesday 14th April 2021 Grand Committee

[Baroness Drake (Lab) [V]]

My Lords, advances in technology have allowed millions to work from home, and businesses to adapt to the pandemic, to a far greater extent than would have been possible 20 years ago. However, while much of the nation pivoted their work and lives online, for a large proportion this was not possible. Certain sectors and geographies suffered much more than others, the young paid a high price and the pandemic heightened disparities in well-being.

The World Bank describes inclusion as

“the process of improving the terms on which individuals and groups take part in society”.

To me, that must embrace digital inclusion and a renewed social contract. In the current industrial revolution, the digital divide exacerbated by the pandemic is life-defining. Addressing it is integral to a more equitable basis for employment and economic growth. The barriers, such as acquiring digital skills, building infrastructure, securing connectivity and accessibility to services, all need to be overcome.

The Lloyds UK Consumer Digital Index reveals that two-thirds of jobs need digital skills of some kind and 52% of the UK workforce are not yet fully digitally enabled. We have a way to go. The index exposes the regional disparities that exist. As businesses recognise that resilience includes cybersecure working from home, anecdotal evidence reveals employers considering making dedicated access to home broadband a condition of employment, and not just for higher-skilled workers. The digital divide has exposed children to unequal access to virtual schooling.

We witnessed the state deploy measures unimaginable 15 months ago and saw the compelling evidence for mutual insurance, an effective welfare system and collective economic security. To make our socioeconomic system more inclusive, resilient and sustainable, a renewed social contract is needed. The pandemic is a wake-up call for purpose in business as societal inequalities and risks have been thrown into sharp relief. To quote Blueprint for Better Business,

“business will need to refresh its credentials as a genuine contributor to society in order to underpin its licence to operate and re-establish trust”.

Prior to the pandemic, household financial resilience was declining, not just among those with the lowest incomes. Each year millions of working-age people suffered an income shock because of ill-health, job loss, the death of a partner or other life events. Employment benefits, state benefits, private insurance, savings, affordable credit and fewer pre-existing debts strengthen financial resilience, but all those factors are weakening, shifting greater responsibility on to the individual, who may be ill prepared to bear it.

One in six people was self-employed, one in 12 had contracts with reduced protection, and 73% of people in regular jobs faced significant fluctuations in monthly earnings. More were in employment, yes, but there was a long-term decline, in both coverage and value, in employer provision of occupational benefits such as sick pay, redundancy pay and death benefits. Means-tested benefits had fallen in real terms; 11.5 million adults had less than £100 in savings; and 65% had no form of life or protection insurance. On home ownership, adults in their 30s and 40s are now three times more likely to rent than 20 years ago.

Declining household financial resilience, so exposed in the last year, is an unrecognised consequence of socioeconomic and public policy changes which need to be addressed. My noble friend Lady Lister argued the case most powerfully and I hope the Government will reflect, recognising what has happened in the last year, on the need for a radical change in the social contract.

[The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)]

I call the next speaker: the noble Lord, Lord Whitty. Are we Whittyless? You are muted, Lord Whitty—not only muted but invisible. We may return to the noble Lord, Lord Whitty, in due course. Let us move on to the noble Baroness, Lady Grey-Thompson.