Devo-max for UK cities? Could Sheffield go it alone?
The British political establishment fell into a state of panic in the days leading up to Scotland’s referendum vote on whether it would remain as part of the union or opt for independence. As one poll put the Yes campaign in the lead, a cross-party coalition of unionists led by Gordon Brown made an ultimately successful last ditch attempt to secure the future of the union. They offered Scotland devo-max on the condition that they voted to remain in the UK.
Devo-max is short for devolution max and is more technically (and explanatorily) called ‘full fiscal autonomy’. This fresh devolution of powers means that Scotland will have much greater control over its own fiscal policy, which encompasses government spending and taxation policy. It will be able to set its own rates of tax and directly receive all tax revenue. This will give Scotland much greater autonomy over how they raise and spend their money, potentially allowing for a much greater expression of Scotland’s Social Democratic ‘political identity’, of which much was made by the Yes campaign.
If much of the argument around Scotland’s proposed independence and resultant devolution was to do with the irrelevance of what is seen as very much an English parliament, then can the same claim not be made from the perspective of many English regions? For northern cities like Manchester, Liverpool or Sheffield, is the view not of a Southern Parliament? Or even a City of London Parliament?
Like Scotland, none of these northern cities will ever elect anything close to a Conservative government, with the Liberal Democrats sliding into obscurity there (they now have no councillors in Manchester and 3 in Liverpool, which they controlled pre-2010). It is for this reason that the coalition has punished northern Labour controlled councils with massive budget cuts, whilst south-eastern Tory councils have gotten off lightly with much lower average cuts per person.
The political identities of northern cities are distinctly to the left of Westminster politics and yet they have been subjected to successive neoliberal governments since Thatcher. Much of our current political agenda focuses on whether Britain retains sufficient sovereignty in this age of globalisation and powerful supranational organisations like the EU and UN. Cries for repatriation of national powers come mostly from the British right-wing but we are neglecting that overwhelmingly left-wing northern cities are seriously lacking autonomy within Britain.
So how do we sustainably give cities like Manchester, Liverpool and Sheffield relative autonomy and the chance to express their political identity? Could English cities and their surrounding regions benefit from full fiscal autonomy and the realisation of a federal Britain? Would all regions be economically sustainable, post-devolution, if fiscally detached from London, whose nominal GDP is close to twice as much as the combined nominal GDP of England’s next 8 biggest cities?
Statistics published on CityMetric (a New Statesman sister site) compared English cities by their nominal GDP. Manchester was clearly England’s second city with £60 billion nominal GDP. With a strong local economy including growing business and real estate sectors, it’s not difficult to make the argument that not only would Greater Manchester be able to survive if it was fiscally independent, it could thrive socially if it used its new fiscal powers to strengthen welfare in the region, free from the London-centrism of the current system.
By contrast, Sheffield had by far the lowest nominal GDP (£12.5 billion) and the most stagnant growth rate of the nine cities. With a manufacturing and steel industry smaller than it ever was, and the majority of jobs to be found in the public and education sectors, does Sheffield have the economic potency to fund and manage its own spending?
Sheffield’s district, Hallam, is the highest ranking area for overall wealth outside of London. A fiscally autonomous Sheffield could significantly increase its revenue by increasing income taxes or introducing a wealth tax for the wealthiest in that and other areas. This could allow them to fund investment in business or industry to inspire growth and to deal with social problems like poverty and homelessness which don’t seem to be going away, across the UK.
Sheffield may not have the economic strength of Scotland or Greater Manchester, but that doesn’t mean devo-max couldn’t work here. In partnership with all of South Yorkshire, a movement towards social democracy which prioritises the welfare of its citizens over than that of the existing rich and powerful, raising local living standards could very well be to the economic and social benefit of Sheffield. Neoliberalism and austerity aren’t working for northern cities like Sheffield and I believe that with the autonomy to determine their own economic and social affairs, Sheffield could realise both greater GDP and, more importantly, a healthy and progressive society.
By Chris Saltmarsh