Scotland: Independence

Lord Haskins Excerpts

Tuesday 24th June 2014 Lords Chamber

[Lord Haskins (CB)]

As a Protestant Irish nationalist from the county of Parnell, I feel that I am straying into a family feud that has some quite bitter feelings about it. I share the view expressed by the noble Lord, Lord Strathclyde, that it is a pity that perhaps only one Member of this House will state the nationalist case. If I were in Scotland, despite my nationalist background, I would have to vote no.

I want to talk today about the implications for England, in the north of which I have lived for 50 years, of what will happen. Whatever the result on 18 September, things will never be the same again and the constitutional consequences for England will be profound. More and more devolution to the Celtic nations means more and more problems for England, leaving England with the most centralised system of government in any major democracy, a point that Scottish nationalists are not slow to point out.

Economic and political power outside London has been drastically eroded over the past 70 years. One hundred years ago, the vast majority—70% to 80%—of the top 100 companies had their headquarters outside London. Today the figure is less than 10%. Until the Second World War, health, education and a host of other public services were the responsibility of local government. Today, local government empties the bins and carries out a narrow range of administrative duties under the close scrutiny of Whitehall, though Ministers are still quick to blame local authorities when things go wrong. Because the role of local government has been so severely diminished, the quality of local political leadership has declined. It is a perfect Catch-22. Oh, for the days of Joe Chamberlain and his like.

The big companies have followed the trend and migrated en masse to London. In so doing, they have lost their sense of civic pride and local community engagement, which was such a feature of Victorian Britain. Who can forget the remarkable achievements on behalf of their local communities of the Cadburys in Birmingham, the Rowntrees in York, Rank in Hull, the Lever brothers in the north-west and the banks in East Anglia, Bristol, Edinburgh and elsewhere? I remember the sad day when Cadbury relocated from Birmingham to Berkeley Square. Clearly the game was up. The municipal buildings built around the country by the Victorians are a magnificent manifestation of partnership and commitment between local government and business. The railway network was created by the efforts of local business entrepreneurs, not central government. Britain’s local structure of government was the envy of the world. Today it is a shadow of its proud past.

Why did this happen? In part, it was a sign of progress on two fronts. RA Butler’s Education Act 1944 established national standards but, while the national Government established strategy, it was left to local authorities to deliver. Over time, Whitehall has steadily eroded localism so that today it is scarcely an exaggeration to say that, relying on the regulatory powers of Ofsted, Michael Gove has 23,000 head teachers reporting to him. Nye Bevan’s NHS structures were even more centralist. When Herbert Morrison, a former leader of the GLC and a great champion of local government, argued that the day-to-day administration of the NHS should remain the responsibility of local government, he was overruled by Mr Bevan who famously asserted that Whitehall needed to hear the rattle of every bedpan that fell on the hospital floor. To be fair, Bevan and Butler wanted to establish consistent, higher standards across the country, but in so doing they undermined an equally important requirement: accountability. The NHS is unmanageably large and short on accountability, as is the school organisational structure.

Ironically, but for different reasons, the Conservatives and Labour both pursued this greater centralisation, Labour because it believed that the state knows best and the Conservatives because they believed that the town halls were a hotbed of Trotskyites. It is so different elsewhere in the big democracies. The US, Germany, Australia, Canada and Spain all operate quasi-federal systems of government, and big corporations do not flock to Washington, Berlin, Canberra, Ottawa or Madrid. Boeing is in Seattle, McDonald’s is in Chicago, Siemens and BMW are in Munich and Airbus is in Toulouse and Hamburg.

In the English regions outside London, it is my guess that 80% or 90% of decisions affecting the local economy are taken elsewhere, either in London by Whitehall and businesses located there or internationally. The centralised so-called controls of the banks are a far cry from the local bank manager who knew his customers and the local economic conditions.

The quality of administration in Whitehall is poor. When I worked in the Cabinet Office a few years ago, I was struck by the contrast between the effectiveness of the civil servants in Edinburgh and London. In Edinburgh everyone knew each other, discussions were open and decisions were arrived at expeditiously. In London people worked in dysfunctional silos, and had poor interdepartmental communications and woefully slow decision-making processes. People paid lip service to collaboration.

So, post-18 September, things will have to change. However, do the politicians have an appetite for change in the light of a number of failed attempts at local government reform? The Heath Government changed the boundaries but little else. Then Major changed the boundaries again, but little else. The Blair Government went for nine regions and, although the economic structures, the regional development agencies, were not bad—I declare an interest as a long-time board member of Yorkshire Forward—the plan to create democratically elected assemblies never got off the ground. The present Government scrapped the RDAs and replaced them with local enterprise partnerships, more modest in size and ambition. I chair the Humber LEP.

Irrespective of past failures, reform must once more be on the agenda post-18 September, and here is what I would do. First, there are far too many local authorities in England—400 of them. They should be reduced to 80 or 90, as was suggested by Redcliffe-Maud in the 60s. I would gradually increase their responsibility for delivering public services, including health and education, but only when they had proved their competence. Secondly, there are too many LEPs—39 of them. I suggest that economic development boundaries should be drawn around large cities, with a few quasi-rural exceptions such as Cumbria, Devon and Cornwall. This would result in fewer than 20 LEPs with an average population of nearly 3 million people. Thirdly, I would treat the south-east as a special case. About 20 million people live east of a line from Peterborough to Portsmouth. They are, for the most part, heavily under the influence of London. Their local government arrangements should reflect that dependency.

It is much more difficult to reverse the centralisation and globalisation of big business, but if the big Whitehall departments were to be devolved to the regions—BIS to Birmingham, the NHS to Leeds, Education to Manchester, Defence to Bristol, DEFRA to York, DWP to Newcastle—might not the big companies, keen to be close to where the power is, follow suit? Of course, none of this is likely to happen. Today’s politicians and business leaders lack the vision and risk-taking inclinations of their Victorian forebears. Besides, they love the metropolitan life of London. Still, perhaps the Chancellor of the Exchequer, after his great speech yesterday, will prove me wrong. The status quo is not an option after 18 September and, if we do not take action soon, we are storing up grave political and economic problems for England in future.