May must build on Osborne’s devolution agenda if she is to realise her economic ambitionsby Andrew Carter / May 9, 2017 / Leave a comment
When former Chancellor George Osborne pushed for substantial devolution of powers and funding from Westminster to England’s major cities two years ago, many in his own party were sceptical.
Few would have argued with the then Chancellor’s stated aims of addressing imbalance in the UK’s economy and its overly centralised political system. But creating strong mayoral roles in traditional Labour strongholds across the North and Midlands seemed an odd move politically, especially when you consider that the Conservatives only had—indeed, have—a slender majority at Westminster.
However, it was precisely this need to revive Tory fortunes in Labour heartlands which Osborne had in mind when he set out his devolution agenda. It was to a large extent designed to cement Conservative dominance across England and wrest control from Labour in major cities.
Two years on, even Osborne (who has exited the political stage) must be surprised at how successfully this vision has been realised following the first metro mayor elections last week. As expected, the Conservatives won in Cambridgeshire & Peterborough and the West of England (which includes the Tory-led councils of Bath & North East Somerset and South Gloucestershire as well as Bristol). But back in May 2015, few would have predicted that the Tories would also win in the West Midlands and Tees Valley—places where Labour had 10 and 13 point leads respectively at the 2015 general election, but where concerns about Jeremy Corbyn’s leadership, support for Brexit and strong campaigns by Conservatives have put paid to Labour hopes.
The question now is whether Theresa May will build on this success by going further in reversing decades of over-centralisation in the British political system—or whether the new mayors will represent the culmination of the devolution agenda championed by Osborne.
Certainly, there has been much less focus on devolution from May’s government than there was from the previous administration. This is to an extent understandable, given the immediate political pressures resulting from the Brexit vote, which of course catapulted May in to No 10 in the first place. Her government hasn’t had much time to think.
Nonetheless, that May is yet to offer any indication that she will seek to extend devolution deals to other big cities, or that she will consider handing down more powers in future to places which already have mayors, is troubling. If she returns to No 10 on 9th June with a bigger majority (as seems likely), she may be tempted to put distance between her policy agenda and that of the Cameron/Osborne era—and no policy bears the hallmark of her predecessors more clearly than devolution.
To let the progress made on devolution stall because of its association with Osborne would be a mistake. May must capitalise on the opportunities offered by devolution (and the developments made on this agenda so far) if she is to realise her economic and political ambitions.
Take, for example, her pledges to “build an economy that works for everyone,” and to “drive growth up and down the country”—promises which reflect concerns about Britain’s so-called “left behind,” whose votes commentators believe underpinned the Brexit result. The new metro mayors taking office this week will oversee a combined 9.5m people, many of whom in places which have been called “left behind.” As such, the mayors will have a crucial role to play in turning May’s rhetoric into reality. The prime minister must make clear their importance within Britain’s political landscape, and work closely with them to make the most of the opportunities they have to galvanise economic growth in their city regions.
However, as long as other major urban areas such as Leeds, Sheffield and Newcastle lack similar political structures and decision-making powers, the potential for devolution to transform the economies of places outside the south east will remain only that. If handed a significant new mandate as PM, May should proactively engage with local leaders in these places, to overcome the obstacles which have prevented them from securing devolution agreements thus far.
Finally, May should put cities and devolution at the heart of her industrial strategy, by taking a “place-based approach” to boosting growth up and down the country. Economic activity in the UK is not evenly distributed—it is clustered in Britain’s cities, which account for just 9 per cent of land but 60 per cent of national output. The government should focus on enhancing the characteristics that make some cities productive and prosperous, and tackling the problems that make other cities less so. Devolution won’t be the sole answer to these issues—but it can play a big part in driving investment, job creation and wage growth across the country.
Osborne’s devolution revolution has already enabled the Conservatives to extend their electoral dominance to places which previously seemed beyond their reach. Now May must seize the opportunities devolution presents to entrench this dominance, and to create an “economy that works for everyone.”