Could Corbyn Kill Devolution?

Devolution has been built on a generation of pro-business city leaders but could Corbynism put this at risk?

Devolution has been built on a generation of pro-business city leaders but could Corbynism put this at risk?

One of the Chancellor, George Osborne’s, defining causes has been city devolution and the development of the “Northern Powerhouse”. At this year’s Conservative Party Conference he announced further devolution measures by allowing local authorities to keep the business rates raised in their area and in some cases even vary the rate.

The Conservative embrace of devolution under David Cameron is in contrast to the approach taken by the Thatcher and Major Governments which saw constant centralisation as the Government stepped into restrain the freedom of movement of local councils. Intervention was justified as standing up for the interests of local taxpayers against the actions of ‘loony left’ councils.

Where Conservative’s promoted localism it was through the prism of defending the rights of suburban and rural, district or county councils against encroachment from Labour run cities.

Early on in his political career, George Osborne shared these instincts and he was very sceptical of localism. His about-turn in attitudes has been driven by a mixture of a belief in the role of cities in delivering economic growth, the political calculation that devolution could ease the pain of austerity and provide a foothold for the revival of urban Conservatism.

The growth of a new generation of able city leaders, typified by Sir Richard Leese in Manchester (close to Osborne’s Tatton constituency), who are committed to the economic success of their cities and are prepared to work across the political divide has changed Conservative attitudes.

Labour’s uncertain response to the agenda has also emboldened the Government. Despite some thoughtfulness on the issue early in the last parliament Labour hasn’t had a coherent response to the devolution and Northern Powerhouse agenda giving the Conservatives the opportunity to capture the territory.

The effect of Corbynism could have a significant effect on the future course of localism.  If we see a strengthening of the rather negative approach to localism which has developed within the Labour Party in opposition and a Corbyn inspired leftward change in the makeup of Labour councillors running our big cities, this could weaken Conservative’s appetite for further local empowerment.

As the Centre for Cities’s Alexandra Jones has pointed out, Corbynism doesn’t regard the prism of place as important; instead focusing primarily on the universality of class division.   The risk is that Labour’s approach to devolution becomes one of instinctive opposition. Jeremy Corbyn has stated that he believes that the devolution deals that cities have entered into are a “cruel deception” because they don’t allow councils to mount a resistance to austerity.

The response from city leaders might be to ignore the negativity from the centre and to carry on with their productive relationship with the Government.  One prominent figure in a Labour council told the Observer that he and others were now “much more interested in talking to the Conservatives  than talking to Corbyn and his gang”.

The question is, however, will they be allowed to carry on with their positive relations with Government. Many moderate councillors are said to be worried about deselection and council leaders are concerned that they will come under pressure to take an oppositional rather than constructive relationship with Government.

While there are many voices in the Labour Party who believe that the party should embrace devolution as way of serving the needs of the people they represent and an opportunity to show that Labour politicians can be trusted with power, it is yet unclear that the oppositional rather than the constructive side of the internal Labour debate will win out.

A new generation of left wing council leaders could lead to change in Conservative attitudes to devolution. Despite the Government’s enthusiasm for city regions, worries about the power of Labour cities against Conservative suburbs are still potent. Graham Brady, the MP for Altrincham and Sale West which lies within the Conservative Controlled Trafford Council within Greater Manchester has recently expressed concerns about the Government’s approach to devolution in Manchester, fearing that the introduction of a mayor for the whole of Greater Manchester could end up with powers being taken away from the Conservative controlled suburb of Trafford.

The attitudes towards Labour led councils which drove centralisation in the 1980’s and 1990’s still remain. In the same week that George Osborne announced the relocalisation of business rates, his ally Matt Hancock, The Minister for the Cabinet Office, released new procurement advice which would prevent councils engaging in disinvestment campaigns. The new guidance was said to be a necessary constrain the actions of ‘militant left wing councils’

It was the actions of what where termed ‘loony left’ councils in the 1980’s and 1990’s including increases to business rates that led to the Conservative Government to centralise the system. Until recently business groups have been very sceptical about localisation, believing that it would almost certainly lead to rates increasing.

It remains to be seen if the return to some of the political divisions of the past, could lead to a return to some of the attitudes of distrust of local government. Ministers have been careful to ensure that it is easier for councils use devolution to help business growth in their areas, for example by reducing business rates, but more difficult to add new burdens onto business.  They will be watchful about the effects of Corbynism on the approach taken by Labour run cities.   The way in which that Labour councillors respond to the new powers could be the deciding factor between if this is a start of a new wave of localism or a high watermark as the fears of the consequences of local control remerge.