Done well, devolution could leave our terrible politicians with nowhere to hide
Constitutional reform is in the air and,but for the cost-of-living crisis, would be commanding far more attention. Yesterday saw the publication of the report by Gordon Brown’s Commission on the UK’s Future, which sets out a vision of “a New Britain founded on a new relationship between our government, our communities, and the people.”
Brown’s proposals deserve careful consideration because they address some major problems with the institutions of central government. The UK is one of the most centralised states in the developed world. We pay more for less, and see an ever-encroaching state consume more of our economic output and take on ever more responsibilities. It’s how we’ve ended up with taxation at a 70-year high while the performance of public services continues to slide.
Does the Brown report address these problems? There are certainly positive ideas. Chief among them is the plan to move civil servants out of London. Shifting government out of the capital would ease the burden on taxpayers by freeing up expensive office space and reducing London weighting, and may even help to address regional inequality.
A focus on devolution could also reap benefits, with power and decision making more localised, helping to link tax and spend decisions more closely in the minds of voters. Residents notice when bin collections switch from weekly to fortnightly, despite yet another hike in council tax. But when taxes go into a trillion-pound pot, it becomes more difficult to track. If fiscal decisions are made locally, taxpayers may find it easier to scrutinise, with local politicians finding fewer places to hide. What’s more, the evidence tends to show that more decentralised tax systems help generate higher rates of economic growth.
That’s the best case scenario. The worst case scenario is one in which these reforms lead to yet more layers of expensive, opaquely-managed bureaucracy with new and cunning levies and charges to prop up an increasingly bloated state. That’s the last thing that this country needs, given the already heavy burden of government. Our research found that in 2022/23, total managed expenditure is projected to rise to £1.2tn, or £41,831 annually per household. Less cost of living crisis, more “cost of government crisis.”
The same could be said for the proposed reforms of the House of Lords. Nobody is happy with the current situation. There are too many peers, with a daily allowance which some don’t justify. But to create yet another class of professional politicians, another set of elections, and a further wage and staff bill is not the taxpayer-friendly proposal that it may sound.
And conspicuously absent from the paper is a serious policy platform to ease the cost of living crisis. Given the paper’s title includes “rebuilding our economy”, this is concerning. The paper mentions devolution, “an economic growth or prosperity plan for every town and city” and tweaks to the UK Infrastructure Bank and British Business Bank. But given what caused this mess, i.e. a government that spends too much and taxes too highly, this simply isn’t enough.
A succession of damaging tax rises has placed a millstone around the necks of working taxpayers. Politicians from all parties need to demonstrate how they will help ease that weight ahead of the next election. They must ensure that their proposals won’t simply lead to yet another layer of wasteful bureaucracy, with taxpayers picking up the tab.