Power to the Regions! Pop the Westminster bubble! Strangle the Whitehall beast! Yes friends, localism is all the rage. Devolution is the word on everyone’s lips. By crying ‘all power to the councils!’ we’ll seem a little less London-centric. By promising to give billions and billions to local governments maybe we can pretend to have a radical agenda, rather than the timid programme we actually propose.
We’re told devolving power will make government more efficient. That it’ll cut down on waste and improve the delivery of services. Devolution will mark the end of big-state centralisation. Suddenly, prosperity for all will blossom.
Is this it? Rather than a legally enforced living wage or the end of the franchised railways, we get devolution. Instead of a genuinely radical programme, tackling unemployment, low pay, inequality and a myriad of other problems, we are given to sell on the doorstep ‘Your council will have more money’. Let’s be serious, this can’t be a pillar of a Labour manifesto.
To highlight the problems with this new fad for localism, let’s start with Scotland, it being the centre of attention for quite a lot of things recently. If our cousins up north decide to stay with us, Labour is promising further powers for the Scottish Parliament to raise tax, namely, the power to vary the income tax set at Westminster by 15p to each pound, as opposed to the 10p per pound that it can vary at the moment. There are three main problems here. The first, and probably most important, is the worry over tax competition within the UK. Yes, the Scottish Parliament will not be able to change the ratio between different bands of tax, but different levels of taxation, especially of income tax, could mean a severe de-balancing of our economy. We would have, in effect, a tax war between the two nations, as each one tries to outdo the other by lowering tax. We’ve seen this on an international level in Europe, as countries like Ireland lower their corporation tax to bring in revenue from tax dodging companies. This brings me on two the second problem of devolved tax, evasion. How can Revenue Scotland, responsible for collecting tax in Scotland, ever be able to compete against tax evaders when even HMRC can’t stop them? Revenue Scotland has fewer resources and less authority than it’s British counterpart. Such a small agency would be easily outmanoeuvred by the tax-dodging giants and their accountancy firms. Only a beefed-up HMRC, along with cooperation with it’s European counterparts, can ensure that all tax is paid. The final problem with devolved tax is far more moral. Taxation is supposed to be progressive and universal. The second principle has been true since the French Revolution. No one deserves to be exempt from the laws of tax. So why then are we allowing tax to be different according to geography? Why should someone living just above or just under the border have to pay a smaller or larger sum to the state purely based on where they live? Obviously this sort of situation exists between nation states, and there is very little we can do about that. Difference in taxation between regions, however, spits in the eye of universal tax, just like the flat tax degrades the idea of progressive taxation.
This isn’t just shown north of Berwick. Let’s take a look at council tax. Why is it that an average resident (band D) in Westminster pays only a few pounds more in council tax as the very poorest (band A) residents of Newham? This is completely against the principle of redistributive taxation. This trend is seen all over the country. Tory councils tax their often richer residents less, providing fewer services for, and ignoring, their less advantaged inhabitants. Meanwhile Labour councils in poorer areas, in an effort to ensure higher standards of living through well-funded public services must raise their rates. Add to this the fact that Labour councils are worst hit under cuts to local government grants and we see that poorer areas must pay more for their council services. Moreover, these areas are the councils that often need these services more. Richer people are paying less council tax, is that how a modern state raises money? I haven’t even mentioned the fact that council tax, much like a mansion tax, is not progressive, not taking into account the rate-payer’s income.
Clearly all tax must be the same across the country. Is it maybe time to start looking at an alternative to the council tax? We do make £26bn off it every year, so anything that would replace it would need to be far-reaching and able to generate enough revenue. Why not a nation-wide property tax, whose rates were not just calculated by the value of the property, but also on the payer’s income? The value of the property could be calculated by how much the owner bought it for or for how much it is being rented for. This would mean that high rates of tax would only fall on those with the means to pay them, circumventing the ‘grannies in mansions’ problem.
Tax cannot be devolved, so what can?
Areas of policy that vary from region to region are ripe for devolution. A prime example is policing. The response to crime needed is different in every part of the country, and there is no need for a large national strategy for local policing. Local government will know how to deal with crime in their area far better than Whitehall. Housing is another perfect devolvable power. Building need, both in terms of quantity of housing and type of housing, varies from area to area. Again, local government is in the best position to build what is necessary (although any new garden cities, which we may need, would be a project on such a scale that only central government could provide). Similarly with local transport. There is absolutely no reason why local government cannot be in complete control of their buses, trams and light rail. However, inter-city lines, which criss-cross the entire nation, should be the responsibility of the Department of Transport.
However, when talking about education and health, we must accept that central planning is needed alongside local control. Especially with talk of integrating health and social care, and with the needs of an ageing population with more chronic illnesses, there is a real need for central government to provide a national strategy for fighting long-term and far-reaching problems such as obesity. The responsibility of individual trusts or hospitals should be the delivery of whole person care, ensuring that patients are treated as humans. Central government should take care of the statistics, trends and numbers and local healthcare should take care of the people. Much the same applies to education: local authorities should focus on teaching, and let the Department of Education worry about targets. To let either parties take control of both aspects, either through excessive localism or excessive centralisation, would mean a lack of resources and knowledge for whoever had the monumental task of administration. Teachers, doctors and nurses know how to work with patients and pupils and Whitehall is in a better position to draw up national policy.
Then we reach the big issues: inequality, poverty, environmental catastrophe. Can local government tackle these? Clearly not. Even national governments may be too small to deal with them. We must retain enough power in high concentrations to fight these problems, along with working together internationally to eradicate them globally. Could local government bring in something like the minimum wage? No, it doesn’t have the reach and authority. Can it bring 2.3 million children out of poverty, like national government did from 1997 to 2010? No, it doesn’t have the resources or the scope. Can local government ensure that public services are right for the community and of a certain, expected quality? Of course, it’s in the best position to do so.
We can’t keep on crying ‘devolution’ for the sake of it. It’s not a healthy way to decide how to share power through the country. Giving money to Local Enterprise Partnerships, which are purely voluntary and under no obligation of accountability to the public, is a sloppy waste of public money. Throwing money at ‘the Regions’ is not going to balance the economy away from London.
Why can’t we seriously look at what the local does best and what the central does best and assign powers accordingly? Why do we have to run scared at any mention of central control? Stripping national government of authority and resources, either through de-regulation, privatisation or devolution can only end in large international vested interests walking all over our democratic sovereignty, one of the worst cases being tax fraud.
Devolution won’t make us look radical, nor will it make up for the absence of certain policies, nor will it appease the Scots. It’s a knee-jerk reaction to accusations of being ‘big-state’. It will simply strip any progressive government of the tools of social justice. So what will it be? Localism or progress?