Read a companion piece, "Can devolved regions go global?", here
Leaders in our towns and cities have always been strong ambassadors, helping to attract investment to their regions. Often their reach has gone global—just look at Sadiq Khan’s popularity.
As the world gets smaller one might think it is easier to get around and do the deals needed to attract this investment, but in truth it’s much more complex and involved, and it certainly doesn’t happen overnight.
The rush for foreign investment in land and property can be a slight distraction for our city’s leaders, and it does not always benefit the local community. Ask Londoners if they want to stop rich property speculators buying up tower blocks as long term investments with no intention of living in them themselves, or even allowing others to live in them. If you do, you will struggle to make the case that this adds any value to an already overheated property market.
So, how do we make devolution work? It isn’t just about powers and money; though foreign investors often find it odd that the mayor or leader of a city has to ask permission to get very basic decisions made.
Where devolution works well we see leaders with ambition and a clear vision for their region. We see solid, well-developed partnerships with universities, particularly in research and development. We also see that university’s alumni spread across the world, with former students leading in their own fields abroad. Their deep connections not only to the university but to the city itself are beneficial.
We see good working relationships across the public sector including central government agencies and departments and we see a relationship of trust and respect with business and finance too.
Britain’s decision to leave the European Union took many by surprise, though you would have seen it coming after spending just a few hours on the doorsteps of Oldham—my constituency. I believe all of us in politics have a responsibility to make the best possible settlement for the British people. We should not hope it fails just because that would prove that Brexit was the wrong move.
There is no question that existing policies on devolution are not working and that has been recognized by successive governments. The EU referendum result reinforces the imperative to press for a meaningful devolution which will drive economic growth in our regions—not just in a few large cities.
There are three key issues which City regions need to resolve if they to punch at, or above, their weight internationally. First, they must be given the power increase their GDPs. At present they are all, with the exception of Bristol, below the European average in this respect. Secondly, their policies need to ensure that their university graduates and skilled young people do not drift to London. Finally, they must have the scope to generate more local income and so be less dependent on central government funding.
The dominance of London within the UK economy is greater than the dominance of capitals within our competitors’ economies. This poses a problem, but it could in part be addressed if the English regions were not disadvantaged compared to regions in other countries which benefit from greater fiscal devolution. We need to level the playing field. That also applies domestically. We cannot have an unequal devolution, where only a few major city regions and metro mayors benefit. We will run the risk of entrenching inequality if we do this.
I would argue strongly that regions should be able to raise their own income, both revenue and capital, and that they should have increased control of government expenditure—specifically when it comes to housing and the money being wasted through Housing Benefit being pumped into unfit properties.
Looking at Europe, where we see countries with regions which are specialising in different industrial and economic areas, there are lessons to be learned for our own nascent regions. What is the USP of these regions? The niche? Where do they have expertise, with inward investment following those skills?
We are also a lot less diverse in our City region leadership than our main competitors and this hampers our ability to inspire groups within our communities.
Finally, we have to have a government that believes in devolution. The current government has gone very lukewarm, and the new man in the Treasury, Philip Hammond, and his Prime Minister are clearly seeking to centralise powers. There is no obvious drive coming from No 10. If this continues we will see devolution which is in effect for the existing core cities—meaningless for authorities like Oldham on the periphery. Unless there is clear evidence to show that a public service is best run from Whitehall, the power to run it—as well as democratic accountability for its delivery—should be devolved as close to the ground as possible.
With the support of Legal & General, Prospect hosted a private roundtable discussion at the 2016 Labour Party Conference examining how, within the context of devolution, cities can develop in a manner that best contributes to a region's economic objectives. The discussion was chaired by Andy Davis, Finance Editor, Prospect. Speakers included: Bill Hughes, Head of Real Assets, Legal & General; Helen Goodman MP, Member of the Treasury Committee; Sir Richard Leese, Leader, Manchester City Council; Jim McMahon MP, Shadow Minister for Local Government and Devolution; Catherine West MP, APPG on Reform, Decentralisation and Devolution; Paul Plummer, CEO, Rail Delivery Group; and Joe Anderson, Mayor of Liverpool.
For speaker and partnership opportunities, please contact david.tl@prospect-magazine.co.uk.
Leaders in our towns and cities have always been strong ambassadors, helping to attract investment to their regions. Often their reach has gone global—just look at Sadiq Khan’s popularity.
As the world gets smaller one might think it is easier to get around and do the deals needed to attract this investment, but in truth it’s much more complex and involved, and it certainly doesn’t happen overnight.
The rush for foreign investment in land and property can be a slight distraction for our city’s leaders, and it does not always benefit the local community. Ask Londoners if they want to stop rich property speculators buying up tower blocks as long term investments with no intention of living in them themselves, or even allowing others to live in them. If you do, you will struggle to make the case that this adds any value to an already overheated property market.
So, how do we make devolution work? It isn’t just about powers and money; though foreign investors often find it odd that the mayor or leader of a city has to ask permission to get very basic decisions made.
Where devolution works well we see leaders with ambition and a clear vision for their region. We see solid, well-developed partnerships with universities, particularly in research and development. We also see that university’s alumni spread across the world, with former students leading in their own fields abroad. Their deep connections not only to the university but to the city itself are beneficial.
We see good working relationships across the public sector including central government agencies and departments and we see a relationship of trust and respect with business and finance too.
Britain’s decision to leave the European Union took many by surprise, though you would have seen it coming after spending just a few hours on the doorsteps of Oldham—my constituency. I believe all of us in politics have a responsibility to make the best possible settlement for the British people. We should not hope it fails just because that would prove that Brexit was the wrong move.
There is no question that existing policies on devolution are not working and that has been recognized by successive governments. The EU referendum result reinforces the imperative to press for a meaningful devolution which will drive economic growth in our regions—not just in a few large cities.
There are three key issues which City regions need to resolve if they to punch at, or above, their weight internationally. First, they must be given the power increase their GDPs. At present they are all, with the exception of Bristol, below the European average in this respect. Secondly, their policies need to ensure that their university graduates and skilled young people do not drift to London. Finally, they must have the scope to generate more local income and so be less dependent on central government funding.
The dominance of London within the UK economy is greater than the dominance of capitals within our competitors’ economies. This poses a problem, but it could in part be addressed if the English regions were not disadvantaged compared to regions in other countries which benefit from greater fiscal devolution. We need to level the playing field. That also applies domestically. We cannot have an unequal devolution, where only a few major city regions and metro mayors benefit. We will run the risk of entrenching inequality if we do this.
I would argue strongly that regions should be able to raise their own income, both revenue and capital, and that they should have increased control of government expenditure—specifically when it comes to housing and the money being wasted through Housing Benefit being pumped into unfit properties.
Looking at Europe, where we see countries with regions which are specialising in different industrial and economic areas, there are lessons to be learned for our own nascent regions. What is the USP of these regions? The niche? Where do they have expertise, with inward investment following those skills?
We are also a lot less diverse in our City region leadership than our main competitors and this hampers our ability to inspire groups within our communities.
Finally, we have to have a government that believes in devolution. The current government has gone very lukewarm, and the new man in the Treasury, Philip Hammond, and his Prime Minister are clearly seeking to centralise powers. There is no obvious drive coming from No 10. If this continues we will see devolution which is in effect for the existing core cities—meaningless for authorities like Oldham on the periphery. Unless there is clear evidence to show that a public service is best run from Whitehall, the power to run it—as well as democratic accountability for its delivery—should be devolved as close to the ground as possible.
With the support of Legal & General, Prospect hosted a private roundtable discussion at the 2016 Labour Party Conference examining how, within the context of devolution, cities can develop in a manner that best contributes to a region's economic objectives. The discussion was chaired by Andy Davis, Finance Editor, Prospect. Speakers included: Bill Hughes, Head of Real Assets, Legal & General; Helen Goodman MP, Member of the Treasury Committee; Sir Richard Leese, Leader, Manchester City Council; Jim McMahon MP, Shadow Minister for Local Government and Devolution; Catherine West MP, APPG on Reform, Decentralisation and Devolution; Paul Plummer, CEO, Rail Delivery Group; and Joe Anderson, Mayor of Liverpool.
For speaker and partnership opportunities, please contact david.tl@prospect-magazine.co.uk.
