Future of the UK Constitution and Devolution

Yvonne Fovargue Excerpts

Wednesday 8th March 2023 Westminster Hall

[Bim Afolami]

This is how that could work. First, alongside what I was saying about local leaders, a standardised system of local government—whether people live in unitary authorities or a mayoralty, and whether they live in England, Scotland or Northern Ireland—would by necessity spread representation all over the United Kingdom. That is how we build in a lot of regional balance. Secondly, we could change the system by ensuring that, in the weight of the total number, there was always at least a significant minority—if not at least 50%—represented in that sort of way, rather than this being just about appointments. Ultimately, lifetime appointments cannot be made on a regional basis; even if we tried to, people are free to move around. However, if by necessity, in an ex officio capacity, the Mayor of Newcastle had a right while they were Mayor to speak in the second Chamber, it would have that regional balance.

This matters because not only would it improve democratic accountability and increase economic growth, as well as helping investors understand who to go to, but it would help to spread good practice and ideas. Constitutions matter because of what they practically do to the governance of the country. We currently have ad hoc relationships that depend on the political colour of the Government and, for example, of mayoralties, and whether particular individuals are perceived to be effective. To some degree, that is always the case. However, where we find good practice happening, we need to highlight it and have a vehicle for it to be aired in a public forum. Parliament, if nothing else, is a vehicle for the public airing of issues and debate. Linking local governance with the review of the second Chamber in that way would be effective.

I will add a bit more detail about why, economically, it makes a big difference if we get more standardised control of how our local government works, and how it links in with central Government. I like data—it is important. If we look at the data for most of the 20th century, inequality in GDP terms between the regions of the United Kingdom was quite low by European standards. However, by 2010, we had started to perform quite badly in comparison with our European partners, and we have continued to perform badly in that vein. I happen to think that that is more about the strength of London than it is about the weakness of certain parts of the country, but we can have a debate about that.

The consequence of that high degree of regional inequality has been twofold. First, it has caused political problems. In certain parts of the country, people feel left behind and that, economically, they have not been given a fair shake. There are calls to reform the Green Book and the Treasury. There are all sorts of political shenanigans and things that Opposition Members will appreciate, as we do on this side of the House. Secondly, that regional inequality has contributed significantly to our national productivity problem, which is well documented. It is out of the scope of this debate to go into that in detail, but if there are big portions of the country performing economically poorly—even if London and the south-east are doing well—the country’s economy overall is not going to improve as much as it needs to.

How does effective devolution help the national productivity problem? Some people might argue that it is about tax, education or skills policy passed in Westminster. Effective devolution, standardised and regularised in the way that I am describing, will help. There are two broad reasons economists give for productivity and regional inequality. The first is poor transport infrastructure in huge swathes of our country. The second is poor policy on innovation clusters, particularly in areas of high skill and around universities. Compared with the UK, other countries are just doing better in those two areas, although the economic debate is broad. If we had more effective power for local leaders, more of a voice to spread good practice, a clearer understanding of who was responsible for what and when, and a more effective fiscal package for each of those local areas, I submit that we would perform better in both those areas.

It is impossible for any centre of government in Whitehall and Westminster to focus appropriately on every single need of every single part of the country, because we make broader national and international policy. We cannot deal effectively with everywhere; that is the role of local leaders. Helping them do that better, whether that means transport infrastructure, skills or innovation clusters around top universities and areas of learning, is what we need to do, and to do that effectively we need to talk about money. It is easy for me to talk about powers and how things should be better and more effective. We have to talk about not just the money available for local authorities and leaders to spend, but what they are accountable for raising. I will be candid with the House. One of the difficulties politically that I and many party colleagues have felt at times is that certain local leaders seek to blame Westminster for all that goes wrong, yet take the credit for everything that goes right. I know it will be a shock that any politician would think of doing something like that.

In this country, we are incredibly centralised fiscally. About 12% of taxes are spent and raised locally, the lowest proportion in the G7 by some stretch. The next is Italy at about 17%, then Germany at about 30%, Canada at about 50% and the United States at somewhere between 40% and 50%, depending on how it is calculated. We are an outlier. I do not want to stray beyond the subject of the debate into Treasury policy, as we have the Budget for that—I know the Minister will be itching to weigh in on the Treasury, and will hold himself back—but when we think about raising more revenue, we should do that as closely as possible to people in the places where that money is spent.

We should politically enable local areas to raise more money, because people would know what they were responsible for and how they were responsible for it in a more standardised way. By raising more money locally, they would be responsible and accountable for it, and there would be a higher degree of trust that the money would be spent well. If that money is not spent well, local people will vote for somebody else. That is how democracy works.

I finish by saying that yes, we need the powers to be regularised. Yes, local leaders across the whole United Kingdom need to be linked in much more closely with Westminster. I have not touched on the powers of the devolved Parliaments, because I am not convinced that a huge shift in power required at devolved level is necessary. When we think of England, we should ensure that what we do mirrors existing models. The hon. Member for Aberdeen North (Kirsty Blackman) described how local government in Scotland interacts with Holyrood. That is the sort of model we could bring in more broadly, on a UK-wide basis, but the money really matters.

Enabling local areas and local leaders to raise and spend more of their own money, whether through property taxes, local income tax or a reformed version of business rates, rather than always relying on Westminster to raise all the money and dole it out, would be an effective way to build our democratic Union, as well as helping our understanding of how we are governed and our economy.

[Yvonne Fovargue (in the Chair)]

I shall move to wind-ups from the Opposition spokespeople at about 3.30 pm.

--- Later in debate ---

[Robin Millar (Aberconwy) (Con)]

It is a pleasure to serve under your chairmanship, Ms Fovargue. In the next six or seven minutes, I hope to set out a contra-view of the Union. I compliment my hon. Friend the Member for Hitchin and Harpenden (Bim Afolami) on bringing forward the debate. Colleagues will know that this is a subject close to my heart to which I have given considerable thought; they may think differently at the end of my speech, but I hope they will find it interesting none the less.

Let us take the old joke of a visitor coming to a rural area and asking for directions. The farmer, or whoever it is leaning on the gate, says, “Well, if I were you I would not start from here.” Sometimes, when we approach a subject such as this, there is that sense of that if we disregard where we are at and start from some idealistic blank page, or some other framework that does not exist in reality—if we believe hard enough and screw our eyes up tight enough—we can imagine that it is that way and start from there and a bright new dawn awaits us. I just do not think that is where we are at.

I am afraid that when I hear words such as “regularising”, I immediately think of words such as “cookie cutter”, “wait your turn” and “stand in place”, because that big stamp that is coming along will get you as well and turn you into something—into a moveable piece that fits with the rest of the puzzle created somewhere else. I find instinctively that that does not fit with me. Members will not hear a defence of the status quo from me. This is not an exercise in party political point scoring—which Members have avoided so far, and I commend them for that—but about exploring what the Union means, what its future holds and what role devolution might have to play in that.

I hold an organic view of a Union that has started and developed inevitably from things such as our location in the world; the temperate climate we enjoy, our maritime nature and identity have all contributed to the nation that we are. We cannot and should not ignore that, and we would not wish to. The system of law we have is, again, an important part of our identity. Identity—there we are. How has our reputation, for good or ill, developed around the world? The values we hold, the Judeo-Christian principles that have been at the heart of so much of who we are as a nation—these things have shaped us. Inevitably, that has dictated and shaped the relationships we have formed around the globe.

When Bill Gates came here a couple of years ago, I had the opportunity to ask him why he came to the UK Government. He said, very simply, “Because of your network of relationships around the globe.” He recognised that history and the depth of contact and relationships we have across the globe and the influence that came with them. From that, then, comes the economy. We are the fifth or perhaps the sixth-largest economy in the world, and part of that is because of that network of relationships. Part of that, too, is driven by the internal relationships we have forged and the transport links, which have already been mentioned, across all parts of our United Kingdom.

We then need to think about the future. In understanding ourselves as a Union, what are we moving towards? That is an absolutely salient and current question. I again commend my hon. Friend for bringing forward exactly the question that we face now: what are we, now we are post-Brexit Britain? If we are no longer on a trajectory into a federalist, liberal, social democracy within the EU, where are we heading? Some would say we are going back to the days of empire and colonial oppression —that kind of thing. I do not think it is, but what are we heading to? That is the Union I think of, and it is absolutely correct to think about what the future holds.

Time does not allow me to develop my points in the way I would wish, but I want to make a couple of key points. I contrast the covenant that holds us together with the contract that is presented in the form of devolution. The covenants that hold us together are those relationships built on shared dreams, shared ventures, shared losses and shared institutions that we have built on the values we hold together. All those things speak to me of covenants, and a vested interest in what every other part of the Union is thinking, feeling, experiencing and hoping.

I contrast that with what we did by devolution. Let me be clear that I fully support the democratic establishment of devolved Assemblies and Parliaments across the UK—there is no disagreement from me on what has been established democratically. The biggest damage that has been done to our Union was not in the creation of those institutions, but in convincing us that the relationship is now not covenantal but contractual—that it is a transactional relationship that says, “You now do these bits. You now make the decisions on these policy areas, and we will give you some money for it.”

Trying to turn that covenant into a contract and a series of transactions does not work, just as it would not for my own marriage: “Right, Robin, on a Monday, you do the bins, and on a Wednesday, I will wash the dishes.” It is the same for our Union. Phrases like “regularising” and the focus on a technocratic design chill me a bit, because they do not capture the essence of who I think we are.

When we start to look at how the contract operates on points such as accountability, we start to find flaws. I support subsidiarity—decisions should be made as close to the local point of impact as possible—but we must not imagine that what we have done is perfect or should be replicable. There are deep problems, which I do not have time to develop today.

Let me finish with one analogy. We are all familiar with new housing estates. Very often, there is a green space in the middle of them. When the houses go up, and the green space is marked out, brown lines cutting across that green space, faint at first, start to appear very quickly. There is actually a phrase for them—they are called desire lines. Those desire lines do not reflect the footpaths that are in place.

I am sure hon. Members know what I am talking about. Residents have decided that the shortest way from A to B is to walk across the green. That is absolutely a metaphor for what we need to learn and how we need to think about the mistakes we have made and the lessons we need to learn about our institutions and how we think about our Union. There is a temptation to say, “We can create a beautiful place. We can put down straight lines, and maybe even curved lines, that reflect what people want,” but we would soon find that people’s actual desires —their organic response to their environment; the thrust of where their ambitions, hopes, dreams, relationships and ties take them—cuts across that place, and creates desire lines, not always where we designed for them.

I urge caution in imagining that technocratic cleverness could take us to a better Union. I urge the proper consideration of the organic model we have, which has grown the covenant that holds us together, and of the bright future ahead.

[Yvonne Fovargue (in the Chair)]

I remind hon. Members that they should bob if they wish to be called in the debate. I call Samantha Dixon.