By Founder Matt Gillow
We are, it is almost universally agreed upon, in the midst of a period which will shape the direction of the United Kingdom for decades to come. Ideas are not just floated about as much as they are prescribed as law by their apostles. What must be the next steps: soft Brexit, hard Brexit, shake-it-all about Brexit. A new ‘radically centrist’ political party. Continued austerity. A real, hard crack at red-in-tooth-and-claw Socialism.
I’d like to make the case for Liberalism – Conservative Liberalism and localist Liberalism. I would recommend David Laws’ chapter on localism in the Orange Book: Reclaiming Liberalism, as required reading. In it, he makes the case for the real devolution of powers to local administrations. Indeed, there are several major issues which a modern Britain faces which localism would, more than any other policy, take a good swing at.
It is evident, by the latest two great democratic exercises in the UK, that we are immensely divided. The country was split almost evenly on the EU referendum, and similarly in the 2017 General Election. Our public services continue to cry out for genuine, wholesale reform, and not just the odd bit of extra funding here and there. A large state, the most centralised in the developed world, seems distant and archaic. Our education system sucks out creativity and innovation from teachers and pupils alike. Poorer regions of the country lose out in a rigid, one-size-fits-all central bureaucracy. Localism is radical, but essential.
A second piece of recommended reading is the Institute of Economic Affairs’ Breakthrough Prize winner. Two Cambridge graduates make the strong case for devolution of fiscal and financial powers to local administrations. Several think-tanks, notably the Taxpayers’ Alliance, agree: giving tax and spend powers to unitary councils (bar a portion of income tax, and VAT, within centrally set barometers to prevent a race to the bottom) introduces competition to government’s strongest arm. Imagine... local elections and referendums provide an opportunity for residents to have a genuine say over how much they want to be taxed, and how much should be spent on public services. Local people, who have knowledge and experience in their local area, would be able to have a say in the running of hospitals, schools, parks and shopping centres, with a view to greater freedom and efficiency. We encourage grassroots politics and strengthen democracy by bringing it closer to people. We give greater freedom for administrations to experiment, progress, and emulate what works in other regions. We free up central government to deal with defence, law and order, and international affairs. We cut unnecessary waste in transfers of funds.
When it comes to Scandinavia, most look at the figures and assume that the secret to their success is high tax, high spend. It gives small state advocates an absolute headache trying to correct this, and Socialists (wrongly) something to smile about. The key to the success of the Nordic model is their system of subsidiarity – rather, the disproportionately high level of local spending compared to spending from central government. It gives, more than anything, their public services far more flexibility than our centrally, inefficiently controlled National Health Service. It allows for proper scrutiny of private companies commissioned to do public sector work. It certainly encourages, as much as anything, a sense of community.
One of the biggest issues with our economy, and indeed one of the greatest barriers to unleashing its potential, is the disparity between London and the North. By giving local administrations fiscal powers, you give them the chance to encourage investment through controlling corporation tax, and through their control of public services. It is absolutely essential , in the 21st century, to say to the world that Britain is ‘not JUST London.’ Individuals will relocate depending on how much tax, or how much spending, they personally want – though naturally limits on levels of taxation must be set in order to prevent the poorest being unfairly disadvantaged – government would need to understand that not everybody has the potential to just get up and move.
Of course, there are other steps that need to be taken. Giving teachers greater freedom, a genuine review into the NHS, and a greater push for transparency in government, amongst many others – but localism is undoubtedly the most comprehensive, and the most urgent.
Sources and Further Reading:
- Paul Marshall and David Laws (eds.), The Orange Book: Reclaiming Liberalism (Profile, 2004)
- Mark Feldner and Mathew Bonnon, 'Fiscal Liberalisation: Winning entry of the IEA Breakthrough Prize', IEA (6th April 2017)
- Madeline Grant, 'Scandinavia is no socialist Valhalla', IEA (29th June 2017)
- 'Why devolution? – the narrative', Local Government Association
- 'Devolution: the basics', Devolution Matters (updated February 2016)
- Tony Travers, 'Why the UK must embrace tax devolution', The Fabian Society (4 August 2016)
Image: highlights6 @Flickr