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  1. Spotlight on Policy
25 February 2019

John Prescott: the Northern Powerhouse is “not devolution, really”

The former Deputy Prime Minister discusses his vision for a more autonomous, better-funded form of devolution.

By Jonny Ball

In the recent Channel 4 docu-drama, Brexit: The Uncivil War, the director of the Leave campaign, Dominic Cummings, was given the Cumberbatch treatment. In the mould of his portrayals of Sherlock Holmes and Alan Turing, Cumberbatch played Cummings as prickly, supercilious and Machiavellian, the campaign’s tortured genius.

But the EU referendum wasn’t Cummings’ first job in politics, nor was it his first referendum. Twelve years earlier, in 2004, John Prescott gave the people of the North East of England the chance to vote for their own regional assembly, as London had in 1998; and it was Dominic Cummings, in what he has described as “a training exercise for the EU referendum”, who persuaded them to reject the idea.

Sitting in his office in Millbank, Prescott reflects on the opportunity the North missed. “I was going to do it in the North East, North West, and the whole North,” he says. The former Deputy Prime Minister and arch-devolutionist first drew up an Alternative Regional Strategy in opposition in 1982, but the policy was not adopted by the Labour Party. Even in power, he says, it was difficult to sell the idea of devolution to Westminster. “Most of our people, Tony [Blair] et cetera, weren’t devolutionists.”

Even Northern politicians failed to see devolution’s potential. “Hardly any of the MPs in the North East turned out [for the referendum]. They looked to Scotland, because they wanted the same powers. I wasn’t giving those powers to them, but I thought it was worth a chance.” On his blog, Cummings remembers it differently. “We came from behind and won 80-20 despite having almost no money, no support, and the entire North East establishment against us,” he gloats.

The UK is one of the most centralised developed countries in the world, dominated politically, economically and culturally by its capital. According to the Institute for Public Policy Research, Londoners receive an extra £419 each in transport spending than their Northern counterparts every year. It would cost £700m in extra funding to subsidise culture and the arts in the North to the same level as in London. There are persistent health inequalities between North and South, lower life expectancies, higher rates of unemployment, lower educational attainment, lower productivity and lower incomes.

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In 1997, as Secretary of State at the newly created “super department” for the Environment, Transport and the Regions, John (now Lord) Prescott, a Welshman raised in the North and former merchant seaman, made remedying these historic disparities
his primary goal.

Decentralisation was the mechanism by which he would kick-start the renaissance of regions that were once known as the workshops of the world. “We set up a framework for devolution and transport,” Prescott recalls, “because transport just acts on its own, and I wanted it back into the overall strategy of government.”

But while politicians publicly deplore regional inequality, Prescott found few who would actually hand power to other regions. “Centralisation is the nature of this island’s politics. It’s cross-party. Neil Kinnock fought a number of my proposals. Labour’s National Executives in Scotland and Wales told me they didn’t want devolution. I was a lone voice, then… People like Kinnock and [the late Liverpool Walton MP and left-wing firebrand] Eric Heffer were running around saying they didn’t want any regional strategies, and that you’ve got to keep central power. What a mistake!”

But Prescott was undaunted. “We got the Scottish government, we got the Welsh one, and I then set up my own commission to report on regional policy.”

Published in 1996, Renewing the Regions recommended the creation of a network of Regional Development Agencies, or RDAs, which would bring together local authorities, voluntary organisations and businesses to work in partnership on regional economic strategy and regeneration. Nine RDAs were established in New Labour’s first three years in government, three in the North. “I wanted to have the same powers as Scotland and Wales for Regional Development Agencies,” Prescott says. “I said that every part of the United Kingdom has to have some form of devolution… They were given money, given powers, and they evolved.”

The Northwest Development Agency, One North East, and Yorkshire Forward – the three northern RDAs – collaborated as a body that resembles in many ways the modern Northern Powerhouse: the Northern Way. As with the current policy, its principal aim was to close the £30bn productivity gap between North and South. Billions were invested through RDAs, allowing long-term regional economic strategies to be developed by local councils and local employers. “They were all set up, they were doing a transport plan,” Prescott remembers. But then came the 2010 general election, and with it, Eric Pickles.

“Pickles”, says Prescott, “hated anything to do with regions”. As David Cameron’s first Secretary of State for Communities and Local Government, Pickles “moved in and closed down the assemblies and the RDAs”, and the plans John Prescott had developed for the North took a huge step back.

For Prescott, what followed was a watering down of the progress he had made. RDAs were replaced by Local Enterprise Partnerships, or LEPs, which were introduced on a voluntary basis and received no public funding.

Soon after, George Osborne “came out with the Powerhouse”. Prescott remembers attending the launch of the policy in Manchester’s Museum of Science and Industry. “I said, ‘why did you cancel something that we started to develop? It had power, it had resources and the local authorities were involved.’”

Like other critics of the Powerhouse, Prescott says the policy places too much focus on Manchester and the big cities of the North West, ignoring the North East and smaller towns. Its piecemeal devolution is centred around “City Regions”, existing local authority structures and executive mayors, rather than giving real autonomy to regions; funding, not least for transport infrastructure, is seriously lacking; and major spending decisions are still made in Westminster. “The Northern Powerhouse is not Northern,” he says. “It stops on the Pennines. And it’s not devolution, really, because everything is granted by the Treasury.”

There are elements of real devolution; “things like Andy Burnham getting the health budget. If he’s getting devolved housing, that’s good too. It’s devolved decision-making… I fundamentally believe that you should have more people involved in decision-making. But we’re the most centralised government system in the world. And this is centralising government yet again. The infrastructure committee can only report to the Treasury, the transport committee can only report to the Department for Transport… instead of giving [the North] funds and letting them decide, every kind of investment has to be determined by the Treasury.”

Had Prescott’s referendums in the North been successful, he says, local government in those regions would now enjoy the same autonomy as London. Londoners, he says, “get the powers, they get the resources, they get transport. When it happens in the North, they say ‘Oh, talk to Grayling’ – God help them!”

Prescott also disputes the value of the other major policy that George Osborne announced alongside the Northern Powerhouse – HS2. The £56bn railway has been touted as a boon for northern towns and cities, but its first phase will stop at Birmingham. Legislation to begin the part of the project that will actually reach the North of England is yet to pass through Parliament.

Northern prosperity has been made synonymous with connectivity, and Manchester has become the totem of northern development. “Manchester has become the London of the North. Everything has just become about the smaller cities providing the labour for the bigger cities. Reducing journey times by ten minutes, and ‘Oh, go and get your job in Manchester.’” Prescott’s idea, he says, was about making the North itself grow, rather than simply connecting it to better-off parts of the country. “What they should be talking about is East-West, but they go North-South.”

In scrapping the Northern Way and Regional Development Agencies, Prescott says the North has “lost ten years of development”. In that time, the massive disparities in wealth, health and investment between North and South have actually grown.

“The North’s entitled to some kind of power”, Prescott says. “It’s bigger than Scotland and Wales and all of them put together, in economic and population terms.” As the public continues to deride distant, out-of-touch politicians, the evolution towards a more decentralised polity with multiple centres of power may seem obvious.

There are, too, the consequences of not devolving to consider. Had John Prescott’s party given him the support he needed to beat Dominic Cummings in the North East Regional Assembly referendum, and if elected regional bodies with devolved powers had altered the constitutional make-up of the country, millions of voters might have felt differently in 2016, when Cummings once more asked them to express their frustrations with Westminster through a referendum. Had Prescott’s plan worked, we might be seeing the beginnings of a very different North, and a very different UK.

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