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6 December 2022

Growth through devolution will be Labour’s election pitch

The question is whether wrapping green policy, levelling up and regional power into one is comprehensible.

By Freddie Hayward

Of all the ideas contained in Labour’s proposals for the constitution, abolishing the House of Lords has received the most attention from commentators. The key idea for Labour’s pitch to voters, however, was to grow the economy through devolution.

The recommendations are obscure. They present a direction of travel, while the final plans will be set out in Labour’s general election manifesto. The report does contain hints about how Labour will fight that election though. The idea is that devolving power to local government will encourage “economic clusters” around the country. Local government could be given more revenue-raising powers and greater autonomy. This leads on directly from a speech Keir Starmer made in Liverpool in July that presented economic growth as the central priority for a Labour government.

A cynic would say that devolution is a cheap way of being seen to level up the country at a time when the public finances are in a poor state. In response, a Labour source might say that the party is promising money as well – in the form of the £28 billion a year Green Prosperity Fund – and that you can’t have one without the other: the decision-making structure must change to get better decisions. Lisa Nandy, the Shadow Levelling Up Secretary, I’m told, is expected to take the lead on making this argument in the months to come. The question is whether wrapping green policy, economic growth, levelling up and devolution into one is comprehensible for voters.

We also learned a lot about Labour’s strategy in Scotland. The plans announced yesterday would accelerate devolution to Holyrood, to the extent that the Scottish government would be able to make international agreements. The thinking here is that to prevent Scotland seceding, Westminster must give away more powers. In this sense, the party wants to double down on the Scottish Labour politician George Robertson’s mistaken prediction that devolution would “kill nationalism stone dead”. Thankfully for Starmer, the meat of the proposal lay elsewhere: to entrench devolution as it stands, combined with the argument that a future Labour government can deliver economic and social measures with greater speed and less risk than independence.

That second argument could prove fruitful for Labour. The economy, public services and the NHS remain the top priorities for Scottish voters, and one of the best ways to dampen Scottish nationalism is to return a Labour government to Westminster. There have been some positive signs in the polls for Labour in Scotland before yesterday’s announcement and the low base from which Labour will fight the next general election means a recovery in Scotland will probably be crucial to the party winning a majority. Yesterday’s announcement was the clearest indication yet that devolution will be central to Labour’s pitch on the economy.

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[See also: Labour adds £5m to its election war chest]