Category Archives: Papers

Longer pieces that discuss ideas and events that the Foundation is interested in. These are part of an ongoing process, not the final policy of the Foundation.

One Nation – Many Rivers

One Nation – Many Rivers:

Towards an England of the regions – a view from the left

Paul Salveson

This is a shortened version of a longer paper. For the full version go to: http://www.paulsalveson.org.uk/2014/08/31/one-nation-many-rivers-the-full-works/

It’s time for a new radical English politics which can build on the best of its  democratic, socialist, liberal and co-operative traditions – but can also learn from other parts of Britain and the world. As the Scottish referendum approaches, it’s clear that not just Scotland, but England (and also Wales) are becoming different places, with a worrying growth of right-wing English nationalism – led by UKIP with the EDL lurking in the background. There needs to be a strong alternative which doesn’t cow-tow to the populist right but asserts a broad and inclusive radical politics. Within England, there are many traditions – often regionally based – that make up a distinctly English radicalism. Hence ‘one nation – many rivers’, reflecting the great diversity of this nation. The vision outlined here is of an England of the regions, as part of a democratised UK, which could live with either an independent or more devolved Scotland. A new England should arise, with a re-balanced and equal relationship with all of its neighbours.

Our radical heritage

We need to rediscover our radical political heritage. It goes back a long way – to 1381 and the Peasants’ Revolt, and more recently to Tom Paine, the radicals of the early 19th century and the Chartists of the late 1830s and 1840s. This British radicalism has been founded on ideas of popular democracy and human rights, rather than state control or ownership. The co-operative movement grew out of northern Chartism, a truly home-grown working class solution not only to short-term ‘consumer’ issues, but offering a ‘new moral world’ based on co-operative communities.  The radical Liberalism which flourished in the 1880s in parts of the North as well as Wales, Cornwall and much of the Midlands, was another very important part of the patchwork of political radicalism in the UK that, at least in part, flowed into the Independent Labour Party, or continued within Liberalism.

It was communitarian in spirit. The state could not be trusted to usher in the new utopia: working people would do it themselves, through their own institutions. For many on the left, well into the 20th century, the aim was ‘the co-operative commonwealth’ not a monolithic socialist state.

Today, we need to construct a new radical coalition which has to go well beyond Labour, whilst recognising that it might be the largest partner in any such coalition. But a genuine coalition, or better still alliance, isn’t about allocating ‘power’ based on size. It’s about recognising the strengths each partner brings to the table and treating everyone as equals. It’s also about creating a new way of doing politics, learning from groups as diverse as Podemos in Spain and Syriza in Greece.

There are some rich seams of early radical history that we can mine to identify some values which remain relevant. The period between the 1890s and 1900s saw a flowering of radical alternatives, such as the Clarion cycling clubs and choirs, the Labour Church and the Socialist Sunday School movement. Hundreds of socialist clubs blossomed in the Northern industrial towns promoting a distinct socialist culture. Many of these have relevance in creating a 21st century politics which – to use Edward Carpenter’s words – forms part of a values-led  ‘Larger Socialism’. The values of the early English socialists were based around democracy, equality, co-operation and good fellowship. And they had a sense of humour.  It never completely died.

Jon Cruddas and ‘Lansbury’s List’

This radical tradition continues within Labour through thinkers like Jon Cruddas, whose George Lansbury lecture at the LSE last Autumn offered some important insights that could inform a new politics. Lansbury was a key figure in the Labour Party prior to the Second World War and was a much-loved figure in London working class politics, leading the Poplar housing struggles. Based on Lansbury’s own ideas, published in the mid—30s, Cruddas suggests five key themes:

  • a ‘national popular’ patriotic socialism
  • A transformative agenda that rejects a shallow and transactional labour politics
  • A socialism hinged on gaining power to give it away- a trust in people and a radical democratic bent
  • A feminism driven by a specific understanding of human equality.
  • An ethic anchored within a conception of the human condition and its creative possibilities, duties and obligations and sense of fellowship”.

These five points form a part of what could become a new radical politics, but need to be informed by an environmental awareness and internationalism, both of which have deep roots in the English socialist tradition. And we could – and should – learn a lot from other movements in different parts of the world.

The idea of ‘patriotism’ needs handling with care. In recent years it has become the monopoly of the right. Yet it wasn’t always so, and ‘patriotism’ in the 1830s and 1840s was very much part of the Chartists’ political toolbox. It is not the same thing as chauvinism or xenophobia – at one end it is buttressed by ‘civic pride’ at the local level, whilst at the opposite end by internationalism and friendship between nations. Labour and radical Liberalism share a common heritage in opposing imperialism and jingoism. A modern patriotism should be about pride in our democratic heritage and love of our country and its inhabitants – but sharply self-critical of our colonial past and not pandering to UKIP-style jingoism, reflected in its current anti-Scots and anti-European rhetoric.

This links to Lansbury’s third point, about ‘a socialism which gives power away’. England remains enormously centralised and the left needs to work with allies to promote a decentralised England – an England of the regions, with real power devolved to regional assemblies elected by PR and set up to encourage active participation. As it stands, England is hugely unbalanced, with an over-heated London and the South-east and a struggling North, with similar but perhaps not quite as acute problems in the Midlands, South-West and East of England. It’s hardly ‘patriotic’ to defend this huge structural inequality. We need an inclusive and forward-looking ‘regional patriotism’ alongside – and informing – an English patriotism.  This has to be sensitive to the importance of re-balancing the nation and encouraging strength through diversity and decentralisation.

Changing the way we do politics is one of the most urgent issues facing Labour and the left. The recent Guardian/ICM poll showed how angry – not bored, angry – people were with politics and politicians. And they have every right to be.  Labour far too often comes across as narrow-minded, tribal and intolerant. Labour needs to much more effective in working in alliances, both locally and nationally. Not for short-term expediency, but because it can often bring better outcomes.  My own local authority has a substantial group of Green and independent councillors who are not short of good ideas on both environmental and community politics. Yet many party members treat them like lepers because they are not part of the Labour ‘tribe’. That attitude has got to change so that building alliances becomes the natural way of doing things, not the grudging exception. Part of that must involve long overdue political reform through proportional representation.

There’s also the way we do politics in the community. Far too often our model remains the transactional approach of ‘we’ll sort it for you’, rather than encouraging united community action – which very often we’re scared of, unless we can control it. The fact is that we’re increasingly not able to sort it out for people and the old paternalist approach towards politics is all but defunct. We need to encourage new forms of community organising and create neighbourhood institutions to give people real power over their communities and lives.

We need to move away from the redundant Labourist idea that all public services should, invariably, be delivered by the state – be it local or national – and look at ways in which people can be given direct power through co-operatives and worker ownership, supported and facilitated by the state. We need a new settlement between what a democratic state should provide directly and what others should be encouraged to offer which rejects the neo-liberal ‘shrunken state’ of recent years but isn’t a return to the discredited Labour-statist model either.

Whilst we need to decentralise power from the national level to the regions, it should not end there. Local government has been allowed to wither to the degree that many senior local government professionals are questioning whether it can survive in its present form. We need to re-think local government and build a new civic politics which involves re-balancing what the local state does and what is provided by community enterprise – with the local authority’s support. We need to go much more local. The stakes are very high: if we do not empower communities at the neighbourhood level, we can’t expect democracy to flourish on a wider scale. The US radical activist Gar Alperovitz has argued: “Is it possible to have Democracy with a Big D in the system as a whole if you do not have real democracy with a small d at the level where people live, work and raise their families in their local communities? If the answer is no, then a necessary if not sufficient condition of rebuilding democracy in general is to get to work locally.”  Labour and its allies should embrace a ‘neighbourhood politics’ where it is people themselves, through co-operative organisations, who deliver most of the services to the community.

Radical regionalism: Towards an ‘England of the regions’

The issues of local, regional and national democracy are intimately related. Within the British Isles we should build a vision for a Federal Britain based on largely autonomous – or independent -governments for Scotland, Wales and Northern Ireland. Should the Irish Republic have some status within this? I would argue it should, if there was a desire within the Republic to form a link. We need to draw a line under centuries of oppression and contempt and build a new relationship with Ireland.  In years to come the prospect of a united Ireland may not be beyond the bounds of possibility and forming part of a Federal Britain might make it more rather than less possible, politically. How do we structure a new relationship? England, if it was just left to an ‘English Parliament’, would dominate all the rest, as it has always done. Within England we need an ‘England of the regions’ based on large, well-resourced, regions – the North, Midlands, East of England, South-West, London and South-east. London does of course already have its own regional government. Most ‘domestic’ powers should eventually be devolved, over a period of 5-10 years, leaving a limited number of core functions such as defence and foreign policy at the centre. Within this structure there should be no reason why the English regions should not form a loose federation to discuss issues of common ‘English’ concern, though the main federal parliament should cover the British Isles as a whole.

Clearly there would be a risk of new regional bodies becoming just as bureaucratic and remote as the centralised institutions they replace. That’s why it would be important to ensure the regional assemblies are genuinely new forms of governance, learning from experience elsewhere across the world and ensuring they are fully representative of the communities they represent.

Neighbourhood democracy

Within the English radical tradition there are plenty of positive examples of thinkers who see politics as going beyond the conventional formula of being allowed to vote every five years, who were committed to real, grassroots democracy. William Morris is someone we pay lip service but who is seldom read. Writing in Commonweal in 1889 he said: “…it will be necessary for the unit of administration to be small enough for every citizen to feel himself (sic) to be responsible for its details and be interested in them; individual men cannot shuffle off the business of life onto the shoulders of an abstraction called the State but must deal with each other.”

We need to re-visit the work of Michael Young, who was a veritable ‘ideas machine’ in the 1940s and 1950s yet whose work has been almost forgotten in mainstream politics. He had much valuable things to say on local democracy, consumer rights and community politics. In the Labour Party pamphlet Small Man – Big World he makes a powerful case for ‘neighbourhood democracy’ arguing for neighbourhood councils in urban areas, working in partnership with existing, larger, local authorities. He suggests they could “build and run community centres where old and young could dance and sing, act and paint…they could open new playing fields, children’s playgrounds, swimming pools…they could establish restaurants, local museums and galleries.” He goes on to suggest that the local authority could delegate some existing functions, including responsibility for managing local schools, health centres and housing estates. As he points out, “Local government at all levels should flourish more than ever before in the new democracy.”

Nothing has happened in the last 66 years to weaken anything suggested by Young. The idea of neighbourhood councils is now more than ever appropriate. But could they be constituted in ways which ensure higher levels of participation, structuring them as a community co-operative? The original local co-operative societies of the mid to late  19th century ran libraries, laundries, restaurants and produced furniture, flour and a range of other goods and services.

A co-operative nation

‘Lansbury’s List’ does not directly include economic activity, which is a surprising omission. But if we look at it from a socialist and democratic perspective, the old certainties of the past are no longer tenable. Socialism should not be reducible to state ownership, and attempts to do that have led to disaster.  We have a rich tradition within English radicalism which has promoted ideas of industrial democracy, from the early co-operators like William King of Brighton and Manchester’s John Doherty, to Edward Carpenter, whoseTowards Industrial Freedom represents a very different approach to workplace democracy, and industrial production, to what became the accepted norm. The Bolton worker-philosopher Allen Clarke’s Effects of the Factory System, published in 1899, offers a critique of industrial capitalism and a Tolstoyan manifesto for small-scale production which is perhaps more relevant now than ever.

It’s ironic that the obvious way forward for a socialist economic policy has been staring us in the face for decades and we’ve done precious little about it. The co-operative movement, rooted in North of England working class radicalism in the 19th century, is in good shape for all the recent problems with the Co-operative Group and offers a viable economic model for a wide range of services and sectors. And without wresting some control over economic activity from the huge trans-nationals, ‘One Nation’ will be a meaningless abstraction. ‘The nation’ no longer belongs to us, be it train operations, energy supplies, manufacturing industries or football teams – and we need to find ways of getting it back, through co-operative ownership.

A radical economic policy needs to dovetail with plans for regionalisation with democratically accountable regional development agencies supporting research and development and providing grants and loans to start-up social enterprises, in collaboration with their local government partners. Small clusters of business based on shared resources should be developed at neighbourhood level,  in creative partnerships between local social entrepreneurs, councils and a reformed regional banking system.

Ethics and equality

Lansbury was one of the many Labour men in the early years of socialism who were strong advocates of feminism. He was part of an honourable tradition that included Morris, Edward Carpenter, Keir Hardie. There were outstanding women socialists, particularly in the ILP tradition – Hannah Mitchell, Selina Cooper, Isabella Ford, and Caroline Martyn to name only a few. Not many would say that the battle has been won, either within society as a whole or within the Labour Party and other parties of the left and centre-left. And obviously it is not just about women’s equality, it’s about class, ethnicity, sexual orientation, age and other factors which make each of us different. If we’re serious about a new form of democratic government, and a dynamic economy, a new radical politics must be much more emphatic about embracing diversity. The proposed new regional assemblies represent an opportunity to find new forms of representation which encourage young people, women, people from non-white ethnic backgrounds and other minority groups to play an active role. We’ve got to stop accommodating to right-wing anti-immigration rhetoric and recognise that immigration brings huge economic and cultural benefits.

Lansbury talked of  ‘an ethic anchored within a conception of the human condition and its creative possibilities, duties and obligations and sense of fellowship’. Sounds strange to modern ears, but a socialist in the 1890s would have recognised exactly what Lansbury meant. William Morris was the great prophet of ‘fellowship’ and his motto “Fellowship is Life –  Lack of Fellowship is Death” became the rallying call of the Clarion movement and inspired several generations of socialists.

Getting off the sofa and joining in

We live in a cynical world where the privatisation of individual existence has gone a long way. But people do yearn for community and this gets expressed in a million different ways. We are a nation of ‘joiners’ – anyone who says that people don’t want to ’get involved’ should look at the membership of charities like the National Trust and its Scottish sister. People do want to get involved but they’re fussy what they get involved in! And that rules out most political parties, including Labour. We don’t make it very attractive to people. But look at Scotland, where the independence debate has energised thousands of people who have never been engaged previously. As one elderly Scotswoman who has become involved in the ‘YES’ campaign said “I’ve got off my sofa and I’m nae going back doon!” That same energy and enthusiasm could develop in at least parts of England around a new radical regionalism.

‘Fellowship’ is the sister of ‘community’ – it might be a community of place, neighbourhood – or it might be a community of interest, ethnicity or age. But fellowship also suggests an active engagement, a warmth that ‘community’ on its own doesn’t offer. Cameron knew he was on to something with his ‘Big Society’ and we didn’t help ourselves by cynically dismissing it. We need our own socialist take on community action which recognises its positive nature and gives it more depth and wider involvement. There is plenty of experience within England on good practice in community development and we need to use the skills that are out there, and usually sympathetic towards the left. And we need to look at ways in which we ‘do’ our own politics, making it a much more attractive and creative activity. This means far fewer boring meetings, many more sociable events and activities and outgoing campaigning. We need to copy some of the ‘yes’ campaign’s ideas, like the ‘yes shops’ where people can pop in for a coffee and talk politics and whatever else.

Lansbury’s point about people’s ‘creative possibilities’ should strike a chord with many people today, from young people forming a band, people involved in writing groups, painting – as well as the much wider sense of creativity, expressed through work and careers.  Far too many people’s creativity never gets a chance. Philip Snowden, in his lecture ‘The Christ That Is To Be’ set out his vision of a freed people: ”I see a people healthy, happy, cultured, contented whose wealth is life, full and free..”

Beauty in civic life

The issue of climate change is probably the single most important challenge facing humanity. Under the current Government it has been relegated to a fringe interest and within Labour there is a sense that it is less central an issue than it was five years ago. Yet it would be a monumental error, and a huge dereliction of responsibility, if we followed the Tory line that ‘the environment’ was less important than ‘jobs’. We know all the arguments that the two should be inseparable. It is not just about the long-term but also how we live our lives now. Issues like better public transport, safe walking and cycling, pleasant places to live and work mean a lot to people. Protection of open spaces and the natural landscape can be some of the most powerful motivators of people and can sometimes run up against developer pressures and local authorities’ desire to create jobs at any costs. We urgently need to move away from the current neo-liberal approach towards landscape and built heritage and recognise both as precious.

It is not just about the countryside; it’s about how our towns and cities function. The work of Ebenezer Howard is an important part of the English radical tradition, but we also need to acknowledge the more recent work of anarchist, Colin Ward,in developing a radical, democratic and humane view of planning.  Encouraging a new sense of ‘beauty in civic life’, as Edward Carpenter called it, would differentiate us sharply from current free-market laissez-faire. We should be sharing ideas with the Greens, not running away from them as rivals. There is enormous scope for local energy-generating schemes which provide an environmentally-friendly source of power, create local jobs and potentially generate a surplus to invest in community facilities. Similarly, community enterprises – or the local neighbourhood co-operative -  could run what are currently dismal unstaffed railway stations and develop them once more as hubs of community life instead of abandoned shells, offering bike hire, shop facilities and other services that meet local needs.

A real internationalism

Britain is an old imperial power which has left all sorts of residues, mostly bad ones. These include racism and militarism, but also a sense of our own entitlement in the world, reflected in a willingness to spend over £100bn on Trident replacement. It’s sad that the real democratic potential of ‘the Commonwealth’ was never realised though it was inevitable that the emerging nations would want to draw a line under the imperialist past. Today, Britain no longer has a clear place in the world, though it does still command some respect, not least for our role in the Second World War in defeating fascism. Internationalism ran through the early socialist movement like ‘Blackpool’ through a stick of rock. It was fundamental to socialists’ sense of being part of the world.  It sprang from radical Liberalism and earlier Republicanism and in turn Chartism – a profoundly internationalist mass movement. We need to champion a new internationalism which resists the seemingly constant temptation to use force in foreign conflicts but instead plays appositive and peaceful role in world politics, using our armed forces for good (e.g. flood relief, other natural disasters, skills development in developing nations, etc.).

We need to end the uncertainty about our place in Europe. There’s plenty that needs to be done to improve the EU but leaving it will not help. We need to build positive relationships between communities in Britain and other parts of Europe – as well as in other parts of the world, through the internet and actual exchange visits. That also means that radicals in the UK should have stronger ties with activists in other parts of the world. Internationalism isn’t about a few diplomats jetting across the globe, it’s about meaningful solidarity and friendship and a new international sense of ‘fellowship’.

Conclusion:  In praise of Slow Politics

This paper has argued for the re-discovery of traditions which have been all but lost over the last 50 years. We need to integrate them with modern-day approaches to radical political activity that have been developed both in Britain and in other parts of the world. We need to recognise the strengths and also the weaknesses of the Socialist tradition. Its fetishisation of state control and centralism is politically redundant. But its’ championing of co-operative ownership, fellowship, internationalism and perhaps above all equality should be cherished. Socialism needs to re-connect with radical Liberalism and the newer forces in the Green, feminist, anti-war and communitarian movements.  It needs to reach out to the nationalist movements in Scotland and Wales and not see them as ‘the forces of darkness’. There is a shared radicalism out there but we need to spend time building a new progressive alliance.

A friend of mine, from a quite different political tradition and a younger generation, made some very telling comments after reading an earlier draft of this paper. He suggested we need to welcome diversity and difference because it makes us better and stronger. “It’s about anti-homogenisation, anti-globalisation, it’s ‘slow politics’, like ‘slow food’. That’s not the same as reviving a tradition just because tradition is good in itself, it’s that places should grow their own, and when they do, they grow things that are rich and meaningful”

I’ve written this as an English Labour political activist, stressing an English radical tradition that we need to re-energise, based on progressive regionalism. Strong radical movements in Scotland and Wales can only help propel that forward. The campaign for ‘radical independence’ in Scotland has been at the forefront of creating a new radical politics, though sadly most of the English left is either completely unaware of what has been happening, or overtly hostile to it. A new English politics is about moving away from the spurious ‘unity’ of Great Britain which only served to hide the reality of English – read London – domination, by a highly privileged elite. The future must be a federation of free nations and – within England itself – regions. We should start by developing friendly ties with campaigners in Scotland and Wales who share similar values to ours, not assuming any mantle of superiority.

Can we recapture the élan of the early days of socialism in a way which really does speak to people’s hopes and dreams today? Labour has the chance to put play a leading role in a new progressive movement which recognises regional and local distinctiveness and is willing to devolve (and share!) real power, both political and economic. It will not be able to do it all on its own and has to learn the positive art of alliances and creative partnerships. We do not have all the answers in what is an increasingly uncertain world. For now, Labour is the largest player in this new ‘red and green’ radicalism for the 21st century – but it will only work if built in partnership with others.

Essays for a new region: For the North and a Federal Britain

For the North and a Federal Britain

Jeffrey Henderson and Suet Ying Ho*

In September 2013 London’s Deputy Mayor, Kit Malthouse, argued that if the Scottish, Welsh and Northern Ireland governments wanted to boost tourism, they should spend their money not in their own nations, but in London (The Observer, September 14, 2013). With these comments Malthouse was merely echoing the sentiments of his boss, Boris Johnson, the Mayor of London. A year earlier Johnson, speaking to The Huffington Post, had remarked: ‘A pound spent in Croydon is of far more value to the country than a pound spent in Strathclyde’ (The Guardian, April 29, 2012). Putting to one side the metropolitan arrogance these comments reflect, they were symptomatic of the widespread assumption that what’s good for London is good for Britain.

The wasting of the British economy since the 1970s and the social dispossession associated with it, has disproportionately been a wasting of the North of England. It is a reality that flies in the face of the ‘trickle down’ economics that lies behind the words of Malthouse and Johnson. While we continue to wait for the beneficial effects of the economic crumbs that fall from London’s table, we suffer the consequences of the continuing decline of the North’s manufacturing industries, its technological, entrepreneurial and skill bases; and with these, its long-termprosperity.

But as metropolitan spokespersons are quick to point out, London is the economic powerhouse of Britain and, indeed, there is plenty of evidence to suggest this is true. For instance, if we take gross value added (GVA – a measure of the contribution a firm, industry or sector makes to the national economy) as a rough proxy for regional economic vitality, in 2011, according to the Office of National Statistics, London accounted for 22% of the British total while the North (that is, the North East, North West and Yorkshire and Humberside taken together), for 19%. Not much in it one might think, until we realise that the North, with a population of nearly 15 million, has around 83% more people than London (population, 8.2 million).Consequently London has a far higher GVA per head of population than the North (or, indeed, than anywhere in the country). Though there are good reasons for this – the higher proportion of people in the most economically productive age groups (due partly to the higher number of migrant workers in London) being one of them – they do not fully explain the significant discrepancies involved. And if we reverse the logic implicit here,we can see how the North’s GVA/economic vitality in relation to its population size, is in fact a measure of the North’s economic under-development relative to London.

So what are the reasons for the North’s under-development? Unless we assume that the people of the North are lazy and less intelligent than their London counterparts, there are three key questions that need to be asked: how did this economic under-development of the North occur; what are the processes that reproduce it today; and what should be done about it?

Origins of our current condition

Where else, other than Britain, has industrial declinebeen evident for so long? While there is no need here to recount this sorry story in detail, the specialist literature suggests the rot began to set in over 120 years ago! While there were fluctuations in the fortunes (literal and metaphorical) of Britain’s manufacturing industriesthrough to the 1970s, it was from that time, facilitated by timid Labourism (for instance, failing to institute the recommendations of the Bullock Report of 1977, which could have paved the way for ‘democratic’ German-style corporate governance and industrial relations) and explicitly by aggressive Thatcherite neoliberalism, that the vice-like grip of de-industrialisation took hold. Given the preponderance of manufacturing in the North’s economic structure, it was inevitable that that region (along with economically similar ones: Scotland and the Midlands for instance) would suffer disproportionately.

At root many of our problems stem from the British managerial obsession with quick and very high profits: what is now termed ‘shareholder value’. From the moment they were confronted with their first serious competition – from the USA and Germany in 1880s – the heads of British industrial companies threw up their hands in surrender. Rather than invest in research and innovation, and thus new and better products to challenge their competitors, British senior managers opted for low cost – and thus low wage – strategies to prolong the life of outmoded products and production processes. This strategy, in the short to medium term, allowed them to underinvest while maintaining their thirst for high profits (for this was their real motivation).Crucially, however, in the longer term it was disastrous for the companies themselves and the workers and communities that depended on them.

Those of a certain age will remember, for instance, the British motorcycle companies – BSA, Triumph, Norton, Ariel etc. – that were blown away from the 1960s onwards by Honda, Kawasaki and Suzuki. In part this was because they failed to invest quickly in the sorts of innovations a new generation of customers demanded: for instance, electronic starting motors and better engine seals to prevent oil leaks (important when the majority of bikers wanted to ride in their everyday clothes and without damaging an ankle).When Honda Cars acquired a stake in what was then Austin-Rover in the 1980s and began production of new models at the old Morris Motors plant in Cowley, Oxford, they were amazed to find that major production equipment,installed in the 1930s, was still in use fifty years later, even though it had long been unproductive relative to modern technologies. The major, ‘innovation intensive’ British industrial companies that remain today – Rolls Royce Engines, AstraZeneka (originally the pharmaceuticals division of the long defunct ICI), Glaxo Smith Kline or BEA Systems – do so because they are among the few, deviant cases, that bucked the general trend (the latter largely thanks to government defence contracts).

Just as with BSA or Austin-Rover in the past, so today with Centrica’s preferences for quick, easy and secure profits over more risky investments in innovation. Initially involved in the consortium to build and run a new nuclear electricity generating station at Hinkley Point, Somerset, Centrica’s board of directors pulled-out on the grounds that the government-guaranteed price on offer was not high enough, even though at 92 pence per kwh it was twice as high as the current price (and high enough to ensure participation by the French company, EDF, not to mention two Chinese companies). Within a month of pulling out, Centrica’s board had spent £0.5 billion buying back shares on the stock exchange, so boosting the company’s overall value. As the pay and bonuses of Centrica’s senior management are linked to share value rather than investing in innovation and expanding Britain’s generating capacity (thus helping to secure our economic future), it is fairly clear where their priorities lay.

There are two centrally important common threads that unite these historic and recent cases: the damage wrought by the ‘financialised mentality’ at the root of the British form of capitalism; and the substantial absence of a government willingness to engage in the economic planning necessary to help drive economic development. But where has this ‘financialised mentality’ – the preference, across all economic sectors and not merely banks, for chasing the fast buck, for running financial scams – come from and how might it be linked to government economic policy? These questions also have historical and structural origins and stem from the peculiarly British configuration of class privilege and empire. Within this configuration, the economic role of London and the influence of its beneficiaries on the economic and budgetary policies of Westminster governments, was – and remains – decisive.

In their book, British Imperialism, historians Peter Cain and Tony Hopkins show that from the late 17thcentury through to the 1960s and beyond, the fortunes of London’s economic and political elites were inextricably linked to Empire. Coming from the same class backgrounds (aristocratic and upper middle class) and educated at the same private schools, they emerged as ‘gentlemanly capitalists’ seeking the quick and easy routes to wealth afforded by the opportunities for financial and commercial speculation that was the British Empire. Not for them the hard work of industrial entrepreneurship with its benefits only in the longer term. That was for the ‘strange’ people (with even stranger accents) from Bolton or Huddersfield, Sunderland, Wolverhampton or Greenock.

Though the British Empire was fatally weakened by the legacies of World War II and the independence of India – the ‘jewel in the crown’ – in 1947, and killed off in the 1950s and 1960s, the penchant of London’s economic elite for financial and commercial speculation was not. On the contrary, it went from strength to strength as London became a global city and financial services, in particular, became proportionately an ever more important component of its economy. Kept in check by national and international controls on currency and investment flows until the early 1980s, London’s banks and other financial companies were released by the Thatcher government – and every succeeding one – to help build, not merely in Britain but worldwide, what we now term ‘casino capitalism’. Inherently unstable and destructive, privileging wealth and greed over all other values and dubbed ‘socially useless’ by the former head of the Financial Services Authority, Adair Turner, by 2008 its consequences were laid bare for all to see.

Today, not much seems to have changed. London’s financial institutions – unlike those of Germany, France or Japan – remain wedded to speculative rather than productive investment and to global investment opportunities rather than those likely to directly benefit the majority of the British population. With lobbying power organised via the shadowy (and possibly shady) operations of the City of London Corporation – which has an informal, but effective right of veto over central government legislation that might adversely affect financial interests – it is hardly surprising that the influence of financial institutions over successive governments, of whatever political stripe, has been maintained. As a consequence, national economic policy has continued to be predominantly fashioned in the interests of London’s internationally oriented elite groups who continue to thrive on financial and, since the 1980s in particular, property-market speculation.

Justified by ‘free-market’ theory, government after government, directly or indirectly, has claimedthat protecting and enhancing these special interests is, in fact, in the ‘national interest’. The refusal of the current government to break up the big banks after the 2008 crisis, countenance EU restrictions on management bonuses or the introduction of a ‘Tobin tax’ (designed to limit perpetual asset churning and thus large scale investment risk), are but the latest indications that when it comes to economic policy, the default position of British governments is to act in the interests of speculators.

Just as financial and property market speculation is not in the interests of even the majority of London’s population, it is certainly not in the interests of the populations of the North or of other regions. But because Britain has a centralised state, and successive Westminster governments have developed policies for the British economy as a whole that, at root, have predominantly addressed the narrow interests of the London elites, most of Britain has been subject to inappropriate economic policies. What the rest of the country needs is economic policies and financial arrangements that help drive productive and innovative activities; the only sort capable of delivering high wage economies with low levels of inequality. In the absence of such policies – in other words in the absence of strategic economic planning – British companies have been largely left to their own devises. As a result, the ‘financialised mentality’ of most British senior managers and their obsessions with increasing ‘shareholder value’ have been allowed free rein. From this lethal combination of centralised state withpeculiarly British ‘gentlemanly capitalism’ has come the lot of the vast majority of the peoples of the North, the Midlands, Scotland and other parts of Britain: economic and social dispossession.

Regional initiatives in a centralised state

British economic history of the last few decades has been replete with examples of the limited ways in which the centralised state – hostage as it is to metropolitan economic interests – has attempted to respond to dispossession and underdevelopment in the regions and nations. It is worth discussing these initiatives in some detailas they help underline the political constraints on economic rejuvenation in the regions that stem from the current character of the British state.

Even a cursory examination of the employment structure in the English regions shows the differences between London and the others. In 2011,government data indicate that manufacturing was only the 13th largest employer in London out of the city’s 16 main industries.In the North (North-West, North-East and Yorkshire and Humber), manufacturing was the third largest employer, employing more than 10% of the working population. In London, financial and insurance companies were the fifth largest employers, whereas in the North they ranked 12th out of the 16 main industries, with around 3% of the working population.With such differences, it is obvious that a uniform national economic policy would leave the northern regions short-changed and would not tackle the issues that impact the possibilities for economic rejuvenation. As a consequence, various governments have attempted to redress the balance, but their efforts have delivered a chequered history in terms of regional development initiatives.

Regional Development Agencies

In recent decades, only the previous Labour government made a serious attempt to address economic development at the regional level. Its attempt came in the form of Regional Development Agencies (RDAs). RDAs were set up to tackle the specificities of a region’s economic condition. One important feature of RDAs was the nature of the core funding to support the organisational infrastructure involved in delivering their policy objectives: economic regeneration, encouraging inward investment, job creation, skills training etc.

According to an evaluation by the National Audit Office/NAO, ten years into their operation, RDAs were starting to make a real difference in the regions. The NAO found that for every pound the RDAs spent on physical regeneration, an additional £2.80 was secured from other partners/agencies in the region. Of the £2.80, over half (£1.51) was from the private sector. In terms of Gross Value Added, it was estimated that £3.30 was added to every pound spent by RDAs. The NAO concluded that the RDA’s physical regeneration projects had clearly helped to generate growth in the regions. What is more, according to the NAO report, ‘many of these projects will not realise their full benefits for many years, and independent evaluation suggests a potential return over their full lives of £8 for every pound spent’.

The success of the RDAs was helped by the fact that they enjoyed a relatively stable existence for a decade after their establishment in 1999. There were, however, two inherent restrictions that limited theirfull potential to contribute to regional economic development. Firstly, the RDAs were required to prepare their ‘Regional Economic Strategies’ in accordance with national economic development policy and the Treasury’s economic forecasts. In other words, while RDAs were set-up to tackle the specificities of regional economic problems, these had to be handled within parameters set by the central government. Secondly, as the NAO report points out, RDAs did not have direct influence over all central government funding in their regions. As a result, it was difficult for them to develop the integrated approachesnecessary to maximise their regional economic impacts.

Local Enterprise Partnerships

Unfortunately for the RDAs, and thus for the peoples of the regions, initiatives developed at the behest of central government in a London-dominated centralised state like Britain’s, is inevitably dependent to the whims of whatever party forms the central government. What did the current Conservative-led coalition government do to this promising regional initiative? The RDAs were abolished under legislation in 2010 and ceased their operations in 2012. In their place we got Local Enterprise Partnerships (LEPs). LEPs have been a huge step backwards in terms of regional economic development. They are partnerships advocated by local authorities and incorporate local businesses to promote economic development. But compared to RDAs, LEPs are much smaller in their geographical coverage, their remits and funding; and thus – inevitably – their capacities for success.

City Regions and cognate phenomena

The boundaries of some LEPs overlap with those of the cityregions: Greater Manchester and Leeds, for example. The introduction of these ‘City Deals’ in 2012 further consolidates the cityregion as the current government’s key spatial unit when it comes to regional development. The first wave of City Deals covered eight cityregions in England, of which five are in the North: Liverpool, Greater Manchester, Leeds, Sheffield and Newcastle.

It must be said that there are many positives about cityregions. For example, the Leeds City Region has a vision to improve transport connectivity across northern England. If this vision comes to fruition, it will help promote cooperation among the regions and provide improved transport links, which arean essential support for production chains across the North and a prerequisite for sustainable economic growth there.  The proposal to set up a ‘Capital Fund Pot’ – to supportdevelopment initiatives – is also in the right direction. It recognises that in order to help drive economic development, more autonomy in capital spending is essential.

Other initiatives also tinker with funding streams in the city regions. In Greater Manchester, the introduction of ‘earn back’ is based on the government’s model of payment by results. It is a 30 year deal and will ‘earn back’ up to £30 million a year for Greater Manchester from increased business rates. ‘Earn back’ monies can be reinvested in such things as transport infrastructure. In Newcastle and Sheffield city regions,funds can be raised for critical infrastructure by tax increment financing. They also have the ability to borrow against future business rate income in key development zones.

To further consolidate the cityregion arrangements, Combined Authorities were subsequently introduced as a new governance model. The first one was the Greater Manchester Combined Authority, established in 2011 and its West Yorkshire counterpart was constituted in April 2014. Unlike the LEPs, which are partnerships and local authorities can be part of more than one LEP, Combined Authorities are legal entities and each local authority can only be part of one.

In Greater Manchester, this model works well as the ten local authorities have had a history of co-operation subsequent to the abolition of the Greater Manchester County Council in 1986. In West Yorkshire, however, the Combined Authority seems destined to be yet another disruption to the existing governance set up. For instance, the ‘Leeds City Region Leaders Board’ was constituted in 2007, and consists of ten districts in West and North Yorkshire. The boundaries of the LEP are the same as the city region. The West Yorkshire Combined Authority, however, covers only five of these districts (Leeds, Bradford, Wakefield, Calderdale and Kirklees). The Leeds City Region Deal proposal states that other local authorities would have the opportunity to join in the future and the Combined Authority could expand to cover the whole LEP area. In the meantime, it is down to the local leaders to work out how best to navigate the anomalies in what is clearly a confused governance structure.

 Current initiatives are insufficient

Whatever the benefits for economic development that may be derived from these piecemeal initiatives, the crux of the matter is that for at least the last 40 years (since the formation of the metropolitan county councils in 1974 and their abolition in the 1980s) this continuous chopping and changing of governance models at the local, sub-regional and regional levels – at the behest of central government (and for whatever functional and/or ideological purposes) has wasted a lot of time, energy, resources and institutional capacities that could have been channelled into much better and more productive activities. Had there been a regional governance system with explicit commitments to strategic economic planning, it could have helped check and reverse the processes of deindustrialisation that have destroyed communities and delivered many of the social problems we confront today. While economic planning is essential to the possibilities of economic rejuvenation in the North and other dispossessed regions and nations, current governance arrangementsdo not augur well for its prospects for success.

While it is recognised that cityregions, relative to earlier local government arrangements, enjoy a higher level of autonomy with regard to prioritising resources allocation, they have serious limitations if the goal is ‘re-balancing’ the British economy and, as part of this, economic rejuvenation in the North. Firstly, cityregions do not have the authority to autonomously raise revenues and thus remain constrained in their capacities to direct their finances into economically productive activities. As the National Audit Office noted in its evaluation of the now defunct Regional Development Agencies, without financialautonomy, integrated and coherent approaches to economic development – such as by the city regions – become difficult and the maximisation of benefits near impossible. Secondly, as most of the funds for city regions come from central government, the policy parameters they are obliged to work within are set within the national economic policy framework. As we have argued, the deep – and increasing problematic -economic asymmetries between London (and its South-eastern hinterland) and the other regions, almost certainly mean that a London influenced national economic policy is inappropriate to the economic needs of the North and other regions. Thirdly, the city-region model may facilitate co-operation and collaboration between local authorities and businesses within the given region (with the aim of promoting competitiveness for inward investment), but what about cooperation between cityregions? Will this happen, or is it more likely that it will lead to inter-city-regional rivalries when they need to compete for scarce resources? Far better, surely, to have a trans-northern governance authority capable of mediating between competing city region interests and developing a coherent, region-wide, autonomously financed economic planning capacity.

Labour’s possible future initiatives will also be insufficient

Should Labour form the government come May 2015, Andrew Adonis’ recent report on how to stimulate economic growth is likely to inform much of their approach to dealing with Britain’s badly lopsided and under-productive economy. The report contains a number of good ideas and proposals. These range from how to enable companies in the same area to work better together through sharing knowledge and technology, to improving technical education and increasing the country’s skilled workforce.The strengthening of the existing regional institutions for economic development is a particular emphasis. It’s also good to see a senior Labour Party figure – probably for the first time since Robin Cook was Shadow Minister for Trade and Industry in the early 1990s – make a strong case for industrial policy.

Unfortunately, however, the Adonis report is at least as important for what it doesn’t say as for what it does. While Adonis and his colleagues are interested in extending and strengthening the current regional institutional apparatus – particularly Local Enterprise Partnerships and Combined Authorities– as vehicles for driving economic rejuvenation, their proposals are hardly radical. Given the deep structural problems that confront the political economies of the North, the Midlands and in varying degrees, many other parts of Britain, the report’s recommendations will be insufficient to pull the rejuvenation trick (and sustain development from then onwards).

Four big omissions

The failures of the report coalesce around four major issues on which its authors are deafeningly silent. The first concerns democratic participation in the institutions that will help drive local economic development. The report – quite rightly – gives ‘a view from business’ (to which a whole chapter is devoted). But, in tune with the New Labour priorities that permeate the report, one searches in vain for a ‘view from organised labour’ or from community organisations.While the report’s researchers interviewed representatives of manufacturing companies, banks, universities, colleges, management consultancies and local governments, the only trade union agency that anyone appears to have bothered with was Unionlearn, the TUC’s skills training initiative.

But significant change inevitably challenges vested interests. Consequently, unless a democratic consensus among all interested parties on both the means and ends of economic transformation is built at local and regional levels, the likelihood for conflict during the transformation process will be high.

Also missing from the report is engagement with other centrally important problems that current arrangements fail to address. For instance, it does not discuss the potentially vital issue of who – institutionally – coordinates how industrial policy is formed across regional institutions that neighbour each other.As a result, it fails to say who should adjudicate the conflicts of interest that will inevitably arise between them (say, between the Greater Manchester and Liverpool Combined Authorities). In other words, the report fails to deal with the major institutional problem evident currently and noted above: namely, who will be responsible for the region-wide economic planning and coordination that will be necessary.

Additionally, the report does not acknowledge that under its proposals, local economic development will continue to rely largely on funding controlled by central government. This is because even the entire local business levy (which the report proposes to make available for development purposes) is unlikely to generate the level of funding necessary given the enormity of the economic problems that confront some of the regions. Power, in other words, would fundamentally remain with central government.

For the report’s authors this is unproblematic. It is so because they fail to appreciate that however successful their proposals might be, they would still be vulnerable to the ideologies and budgetary preferences of whatever party was in office in Westminster (just as the Regional Development Agencies – founded in 1999, abolished in 2012 – were). As the British state has no written constitution, their proposed initiatives would have no guarantee of long-term continuity and stability.

The ultimate problem with the report, however, is that its authors do not understand (or refuse to countenance) that the ‘smarter’ state they desire cannot be achieved while the entirety of the British economy is dominated by decisions made in Westminster. The report’s proposals would do little to transcend this. Our problem – the British problem – is that we are lumbered with a pre-modern state. Building a smarter state thus requires the formation of a new and different state.

What is to be done?

After more than 40 years of de-industrialisation, increasing inequality and poverty, a widening North-South divide (or whatever terminological construct we might place upon the social and economic fracturing of Britain), the fundamental issue for the people of the North, and in varying degrees those of every English region and British nation, is the need for structural economic transformation. This is not merely about economic growth (we have had plenty of that, but built on weak foundations – speculation, low value-added and thus low wage service industries etc.), but about how to develop our regional economies in such a way that they – and when aggregated, the country as a whole – become capable of delivering generalised and sustainable prosperity. If this can be done, then the country’s deepening social disintegration and many of the problems it has caused, can be halted and reversed.

For the North, the Midlands and some other regions, radical economic transformation of their economies will be necessary. Specifically, these regions will need to be re-industrialised. While this may well involve the upgrading (technological and innovation-deepening) of some of the existing manufacturing industries, it will also involve the encouragement of new, skill and knowledge-based ones associated, perhaps, with bio-technologies, new materials (such as the super thin, light and strong, graphene, invented at Manchester University), specialised engineering, cutting-edge electronics, low carbon energy and new types of transport equipment and the various manufacturing related, high-end service industries that will need to be associated with them. To effect the re-industrialisation of the North and similar regions, companies engaging in new and more innovative activities, weaned off the financialised mentality of senior executives that has so damaged Britain, will need to be forged and their collective interests and those of the communities in which they are located, ‘orchestrated’. The history of global capitalism tells us that this can only be done with the help of governmental institutions capable of strategic economic planning; institutions that in the North may wish to draw on some of the most successful examples of dynamicindustrial capitalism in Europe (Germany, Austria, Sweden, Finland for instance) and elsewhere – South Korea or Taiwan, perhaps – for inspiration. For the reasons explored here, Westminster governments are structurally incapable of building the institutional capacities necessary for this task. As a consequence, a new type of British state is needed.

Re-formation of the British State

With London working predominantly to the rhythms of the global, not the national economy (and to its speculative, ‘casino’ aspects in particular), central government – irrespective of governing party – has lacked the intellectual vision and political will needed to help deliver economic re-structuring. Westminster policy long ago became incompatible with building high performing, skill intensive manufacturing and related industries; the only ones capable of delivering the high wage, sustainable and egalitarian economies that the North and the other regions need.

Other than Japan, Britain has probably the most centralised state system of any major country in the world. With this has come the concentration of economic, political and cultural power in a single city: London. To develop the vision and political will needed to rejuvenate the North and Britain’s other regions and nations, weconsequently cannot rely on Westminster. The people of the North have to take political responsibility for our own back yards.  While the city-region and related initiatives are useful steps forward, after decades of neglect of the North and elsewhere, they are insufficient to the now considerable task of economic transformation. They are so, because they ultimately exist at the behest of central government. As Britain does not have a written constitution that would guarantee their longevity, they could be dismantled should the government change. Additionally they do not have the financial autonomy – and so are unlikely to generate sufficient institutional capacity – necessary to help drive and co-ordinate economic rejuvenation across the northern region.

The Institute of Public Policy Research has shown that the North, even with its currently depressed economic condition, would be the 8th largest economy in the EU were it a separate, sovereign state. Consequently the possibility of economic expansion with generalised prosperity in the North is substantial. To realise this, however, the North needs a trans-regional governmental authority to help plan and guide its development.

As with Scotland, to develop prosperous, egalitarian economies, the North and similar English regions, as well as Wales and Northern Ireland, need maximum devolution. We need, in other words, the re-formation of the entire British state. And in order to prevent reversals by future central governments, it will need to be a re-formationenshrined in a written constitution.

There are compelling reasons why a constitutional re-making of the British state is long overdue (and the debate over the future of Scotland is forcing them to the foreground). Among those is the fact that economic transformation of the sort necessary in the North and other regions cannot be left to ‘market forces’ alone: companies responding to profit signals. Such signals are currently insufficient to entice private investment into the sorts of industries, research, education and training that is necessary. Consequently, transformation will require a state capable of working with businesses, trade unions and communities to become a collective industrial entrepreneur. Allied with regional development banks supplying ‘venture capital’, it will need to be a state able to raise its own finance and develop the democratic legitimacy, intellectual capacity and political will to engage in strategic economic planning. Short of a sovereign state, only a regional state that is part of a federal system (as with the German länder or US or Canadian states) is able to develop those types of attributes and functions. This is why the people of the North, and the British people in general, need – and deserve – such a Federal state.

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Acknowledgement: This paper draws on the analysis and arguments in an article due for publication in the autumn: Jeffrey Henderson and Suet Ying Ho, ‘The upas tree: the overdevelopment of London and the underdevelopment of Britain’, Renewal, 22(3), 2014. We are grateful to the editor of Renewal, Ben Jackson, for allowing us to use that work here.

*Jeffrey Henderson is Professor of International Developmentand Suet Ying Hois a Visiting Fellowin the School of Sociology, Politics and International Studies at the University of Bristol. Among earlier appointments, Jeffrey Henderson was a Professor at the Manchester Business School, University of Manchester and Suet Ying Ho was a Lecturer in Urban Planning at the University of Liverpool and at Leeds Metropolitan University. They now divide their time between Bristol and Leeds and are both Members of the Steering Committee of the Hannah Mitchell Foundation.

Long Term Rail Strategy for the North – HMF Response

The Hannah Mitchell Foundation has submitted a detailed response to Rail North’s consultation on Long Term Rail Strategy.

It is supportive of the overall approach but argues for a stronger vision for rail in the North with a directly-elected Northern Assembly overseeing rail, instead of the joint arrangements between 33 local authorities. It wants to see a not for dividend social enterprise running the North’s rail services, with profits recycled back into the business, providing improved facilities.

 

To read the full response, click here  LTRS Rail North HMF Response

Report on “A Voice for the Northern Economy” IPPR North Conference

Many supporters of the Hannah Mitchell Foundation and readers of this website are familiar with the excellent work of the Institute for Public Policy Research North (IPPR North) www.ippr.org/north and its collaboration with the Northern Economic Futures Commission (NEFC). Its report ‘Northern Prosperity is National Prosperity’ provides a vast amount of national and international research. It highlights the reasons why the northern economy has been in long-term decline and signposts a range of proposals for a better, fairer, future for the North. Interestingly, it identifies the Northern region of England, as does the Hannah Mitchell Foundation, as the North East, North West, Yorkshire and Humber.

This was the focus for the conference, ‘A Voice for the Northern Economy’, held in Leeds by IPPR North on 28 January 2013. The keynote speaker was Rachel Reeves MP for Leeds West, Shadow Chief Secretary to the Treasury. Neil McLean Chair of Leeds City Region Local Enterprise Partnership (LEP) responded.

Read more of the report by Jenny Cronin here A Voice for the Northern Economy. IPPR North Conference (Opens a word document)

The Economic Transformation of the North

Professor Jeffrey Henderson describes how centralisation led to economic decline in England, and explains why only devolution to local and regional government can reverse that decline and create a fair and prosperous North.

“The fundamental problem that confronts the North, as it does in varying degrees every other region of Britain, is that of economic transformation. The question is not merely how to create economic growth (there was plenty of that during the 1990s and 2000s, but look where we are now), but how to build genuine development capable of delivering generalised and sustainable prosperity with low levels of inequality. If that can be done, then the country’s deepening social disintegration and many of the problems it has engendered, can be halted and reversed.”

Download the full paper: The Economic Transformation of the North

Jeffrey Henderson is a Professor at the University of Bristol and, currently, a Visiting Professor at the University of Leeds. He was born in County Durham and brought up there and in Yorkshire. He returned to the North in 1990 and lived first in Manchester and then in Leeds. He now lives partly in Leeds and partly in Bristol. Between 1992 and 1994 he was an advisor to Robin Cook MP, then Shadow Minister of Trade and Industry. During that time he worked on Cook’s economic policy manifesto, Re-Making Britain’s Future.