The Angel of the North on February 3, 2012 in Gateshead. Photograph: Getty Images.
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How Osborne could use the Budget to make peace with the north

Rather than token announcements, the Chancellor needs to give much more meaningful power and autonomy to cities.

George Osborne is likely to use tomorrow's Budget to make another peace offering to the north of England, normally in the form of a transport (re)announcement – last time it was some pennies for the North East Metro, at the Autumn Statement it was Northern Hub. The Budget represents a key staging post ahead of the local elections. Some Tories like David Skelton have got a keen eye on how the Conservatives will fare in May as they know that to win a general election next year, they’ve got to retain and build on their seats up north. They particularly fear UKIP eating into their vote share in the region.

But it wasn’t always the case that the Tories struggled so much in the north. In fact, history shows that the Conservative Party had an important role in the growth of England’s great Victorian cities. Both Joseph and Neville Chamberlain were key figures in the rise of Birmingham in the late 19th century. Disraeli famously set out his vision for the nation in Manchester stating "what Manchester does today, the rest of the world does tomorrow". Lesser-known figures such as William Huskisson were behind major infrastructure developments like the Liverpool-Manchester Railway and even up until the 1960s, the Tories controlled the city of Liverpool and still boasted Conservative champions like Michael Heseltine.

What Osborne’s predecessors grasped was the importance of powerful, autonomous cities, not only in driving national economic prosperity but also as the basis for strong civic institutions and a vibrant local democracy. Much of this was stripped away under Thatcher, but if the Tories want to win back the big cities they need to revisit their strong civic past and give much more meaningful power and autonomy to cities than we have so far witnessed. The coalition’s "City Deals" – championed by smoggie Greg Clarke MP - only went so far and seem to have run out of steam. The localism agenda largely bypassed councils and was a front for cuts.

So rather than baubles and sweeteners, what could Osborne do with the Budget that could set a new direction for city growth?

First, he could revisit the excellent Heseltine Review and specifically carve out much more substantive elements of departmental budgets to put into the Single Local Growth Fund – the current £4bn over five years is derisory and has reduced strategic economic planning in most cities to a small-scale bidding contest between Local Enterprise Partnerships. We need large-scale five-year settlements with city regions to allow them to get on with the joint task of economic growth and public service reform.

Building on this, cities should be allowed to keep the proceeds of economic growth and public sector savings. The concept of "earnback" has been instituted through the GM Infrastructure Fund but now it needs to be applied more widely in relation to all economic growth, welfare and housing as IPPR North has argued.

And finally, Osborne needs to go much further than the current business rate retention scheme and set out bold ideas for giving cities much great fiscal autonomy. The London Finance Commission was keen to devolve land and property taxes. Gordon Brown's suggestions for the devolution of income tax in Scotland could set a precedent for some kind of income tax assignment in England too. However it is achieved, fiscal autonomy is a key plank of the success of cities in other developed nations and in England we are getting left behind.

Time is running out for the coalition government to really drive the cities agenda that promised so much at the beginning of the Parliament. Not only is this the right thing to do for the national economy – it is probably their only chance of being returned to power. Let us hope that the Chancellor grasps the spirit of his northern predecessors more fully, rather than present us with just another northern Budget bauble.

Ed Cox (@edcox_ippr) is the director of IPPR North. 

Ed Cox is Director at IPPR North. He tweets @edcox_ippr.

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How English identity politics will shape the 2017 general election

"English" voters are more likely to vote Conservative and Ukip. But the Tories are playing identity politics in Scotland and Wales too. 

Recent polls have challenged some widely shared assumptions about the direction of UK elections. For some time each part of the UK has seemed to be evolving quite distinctly. Different political cultures in each nation were contested by different political parties and with different parties emerging victorious in each.

This view is now being challenged. Early general election surveys that show the Tories leading in Wales and taking up to a third of the vote in Scotland. At first sight, this looks a lot more like 1997 (though less enjoyable for Labour): an increasingly hegemonic mainland party only challenged sporadically and in certain places.

Is this, then, a return to "politics as normal"? Perhaps the Tories are becoming, once again, the Conservative and Unionist Party. Maybe identity politics is getting back into its box post Brexit, the decline of Ukip, and weak support for a second independence referendum. We won’t really know until the election is over. However, I doubt that we’ve seen the back of identity politics. It may actually bite more sharply than ever before.

Although there’s talk about "identity politics" as a new phenomenon, most votes have always been cast on a sense of "who do I identify with?" or "who will stand up for someone like us?" Many voters take little notice of the ideology and policy beloved of activists, often voting against their "objective interests" to support a party they trust. The new "identity politics" simply reflects the breakdown of long-established political identities, which were in turn based on social class and collective experiences. In their place, come new identities based around people, nations and place. Brexit was never really about the technocratic calculation of profit and loss, but about what sort of country we are becoming, and what we want to be. 

Most social democratic parties in Europe are struggling with this change. Labour is no different. At the start of the general election, it faces a perfect storm of changing identities. Its relationship with working-class voters continues to decline. This is not because the working class has disappeared, but because old industries, with their large workplaces, shared communities and strong unions are no longer there to generate a labour identity. 

Labour is badly adrift in England. The English electorate has become increasingly assertive (and increasingly English). The Brexit vote was most strongly endorsed by the voters who felt most intensely English. In the previous year’s general election, it was fear of Scottish National Party influence on a Labour minority government that almost certainly gave the Tories the English seats needed for an overall majority. In that same election, Labour’s support amongst "English only" voters was half its support amongst "British only" voters. The more "English" the voters, the more likely they were to vote Ukip or Conservative. It shouldn’t be a surprise if Ukip voters now go Tory. Those who think that Ukip somehow groomed Labour voters to become Tories are missing the crucial role that identity may be playing.

So strong are these issues that, until recently, it looked as though the next election - whenever it was called - would be an English election - fought almost entirely in English battlegrounds, on English issues, and by a Tory party that was, increasingly, an English National Conservative Party in all but name. Two powerful identity issues are confounding that assumption.

Brexit has brought a distinctly British issue into play. It is enabling the Tories to consolidate support as the Brexit party in England, and at the same time reach many Leave voters in Wales, and maybe Scotland too. This serendipitous consequence of David Cameron’s referendum doesn’t mean the Tories are yet fully transformed. The Conservative Party in England is indeed increasingly focused on England. Its members believe devolution has harmed England and are remarkably sanguine about a break up of the union. But the new ability to appeal to Leave voters outside England is a further problem for Labour. The Brexit issue also cuts both ways. Without a clear appeal cutting through to Leave and Remain voters, Labour will be under pressure from both sides.

North of the border, the Tories seemed to have found - by accident or design - the way to articulate a familial relationship between the party in Scotland and the party in England. Scottish Conservative leader Ruth Davidson appears to combine conservatism, unionism and distance from English politics more successfully than Scottish Labour, which must ride the two horses of "near home rule" and committed unionism. Scottish Labour has a perfectly good call for a reformed union, but it is undermined by the failure of Labour in England to mobilise enough popular support to make the prospect credible.

Identity politics is not, of course, the be all and end all of politics. Plenty of voters do cast their ballots on the traditional tests of leadership, economic competence, and policy. Labour’s campaign will have to make big inroads here too. But, paradoxically, Labour’s best chance of a strong result lies in taking identity politics head on, and not trying to shift the conversation onto bread and butter policy, as the leaked "talking points" seem to suggest. Plenty of voters will worry what Theresa May would do with the untrammelled power she seeks. Challenging her right or ability to speak for the nation, as Keir Starmer has done, is Labour’s best bet.

 

John Denham was a Labour MP from 1992 to 2015, and a Secretary of State 2007 to 2010. He is Director of the Centre for English Identity and Politics at Winchester University

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