Chris Matheson on Devolution

Today’s globalised capitalism, based on the needs of Wall Street and the City of London, prioritises capital ahead of production. Wealth and investment is no longer confined by national boundaries, and over the forty years since Thatcher ushered it in to the UK, it has allowed globalised corporations to move skilled jobs abroad, or to import cheaper labour to the UK, in order to drive down wage costs and drive up returns to shareholders. So once proud and prosperous manufacturing towns saw their factories and steel mills replaced by call centres, which were themselves then replaced by warehouses and pizza shops. Exploitation became global but the effects were very local. This globalised exploitation cannot be met with a local response – it has to be global too.


Yet the mantra was always that governments can’t intervene, as though the free market was truly sacrosanct. Democratically elected governments were the only block to globalised corporations doing what they wanted with impunity, so the capitalists forged a new orthodoxy, telling the government to butt out. Michael Hesletine’s pledge as Tory Environment Secretary to “intervene before breakfast, dinner and tea” – or was it “lunch and dinner” ? - may have been startling at the time but it was still stamped upon.


New Labour’s response was to focus not on defending existing jobs, but on reskilling and the use of the tax and benefits system to minimise financial distress; an option quickly removed by the Tories and LibDems after 2010.


So with national governments unwilling to act against the globalised market fundamentalists, much of the response to globalisation has been to focus on the local: devolution of some powers over spending decisions followed by devolution of limited government resources. Which all too often means devolution of Tory austerity and with it the removal of responsibility for central government to take further action to support local and regional growth. Too many on the left have seen devolution as the answer to Tory austerity and the squeeze of globalism, when regional and sub-regional government without the necessary resources will simply exacerbate the problem and increase people’s sense of the futility of politics, as another layer of government is denied the resources to make radical improvements in people’s lives.


The problem has been further exacerbated as much of the devolution has been centred around the large urban areas with their figurehead directly elected mayors. Smaller towns and more rural areas are squeezed out by the big cities which are sucking in investment and political attention, so squeezing out the towns. Town centres diminish as wages stagnate. So a further divide is not just between town and country, but between city and town, as a mish-mash of different local government arrangements is used to deliver different forms of devolution, to address a national problem of under-investment often not caused by domestic power structures at all but by Conservative austerity and global capitalism sucking wealth out of the UK.


It has been a hugely successful tactic of the Conservatives to deny local and regional government the resources to deliver successfully the services people need to halt the national decline, and then to blame those local councils and mayors when services fail. So school and children’s services budgets have been slashed, and we have lost 21,000 police officers nationally, but an increase in knife crime is apparently all down to Sadiq Khan.


As Labour found after 1997, its big plans for regional government, so desperately desired outside London during the Thatcher-Major years, dissolved to nothing after two years of the Labour government when folk had a government they felt really cared for all of the UK. So rebalancing of power must come with a genuine end to austerity, with real resources to councils and mayors and whatever structure is in place; but crucially it must also come with a national government strategy committed to actively defending the UK against pillaging global corporations value- stripping the UK; committed to redistribution; and specifically sharing growth fairly across the UK, rebalancing the UK economy to towns as well as cities and to rural as well as urban, so that no region gets left behind. Devolution on its own is no solution at all.


Plans to allow councils to keep all their business rates must be resisted: richer Tory areas will simply get richer, and their business rates income will be used to depress council tax rates, so giving them artificial political credit for a low council tax they do not deserve. Fairness in redistribution must remain the bedrock of a socialist government programme.


The answer to the threat of globalised capitalism cannot be simply devolution of Tory austerity, nor even more money for regions under a Labour government: a government that is prepared to stand and fight for the people who elected it is a government on the side of the people and against de-skilling and exploitation. Communities may fight for the minimum-wage, zero-hour scraps provided by an Amazon warehouse on a former manufacturing site, but the government must enforce proper employment and union rights and make companies like Amazon pay their proper share of tax on UK operations. An active government, willing to overturn the orthodoxy of 40 years of neo-liberalism and get tough with the globalised exploiters would be a good start in defending the communities left behind, and restore people’s faith that politics can work for them again .