Economic Opportunities of Devolution

Richard Honnoraty

We believe that the centralised Westminster government has let down Yorkshire badly. Successive governments of various political persuasions have been big on promises but short on delivery. The region has been starved of public investment which has led to declining public services, a lack of private inward investment resulting in fewer high quality job opportunities which in turn has meant that talented young people have had to leave the region in order to satisfy their career aspirations.

Time and time again the government has failed to grasp the opportunity to create a strong prosperous Yorkshire.

Over the coming years we face significant challenges from environmental issues, such as climate change, demographic problems with our ageing population and economic difficulties including low productivity, the trade deficit, uncertain trading conditions and questions around our ability to pay for all the public services that we need. We are simply not in a good position to meet these challenges. If the government cannot or will not help us to meet these challenges, then they should give us the tools to get job done ourselves.

Devolution could be the key to allow us to unleash our potential. There are many reasons for devolution to Yorkshire, some examples are that Yorkshire is a separate “stand-alone” region with its own strong identity, defined boundaries and spirit of community; the Yorkshire brand is well known; Yorkshire has the economic scale to prosper; and the Yorkshire economy is diverse and has huge potential. Concentrating on the economic issues, it becomes apparent that devolution would allow us to focus on regional issues to grow our economy and allow us to pay our own way. The idea is that Yorkshire would move from being a net consumer to a net contributor. Yorkshire is currently subsidised by London and the South East but how much longer can we rely on these subsidies and is it right that we should?

The initial cost of investment to transform the Yorkshire economy will not be insignificant but, once we move to being a net contributor, this will take pressure off the rest of the UK economy. The “One Yorkshire Economic Case” envisaged growth of around £30BN over 30 years. Frankly, we believe this figure to be unambitious. We would be looking for much more than this. Devolution would only be part of the answer, the devolved administration would have to be relentlessly focused on economic growth. This is made all the more complicated because that growth would have to be sustainable.

The devolved administration would need to bring with it a new form of political cooperation because old style adversarial politics simply would not deliver within the required timescales.

The changes to our economic situation would be profound. These changes could transform our public services. We would not need to borrow anything like as much as we do today to generously fund our health, education, welfare and other services. If we needed to borrow anything at all.

We would not be asking people to make sacrifices to support these changes as they would be introduced over a fairly long timeframe, around 30 years. We could not make these changes overnight as that would simply create chaos.

Some of the things you think you know about devolution may be wide of the mark, for example, it is not another tier of government; it is more a refocusing of government, bringing the actual decision making closer to home. It will not cost a fortune because the devolved administration will simply take over many of the roles fulfilled by various government agencies and Whitehall Departments. It will cut through the bureaucratic morass that passes for government administration these days.

The devolved administration will, of course, need those powers and authorities necessary to get its job done. The type of administration is open to debate, but we support the idea of a directly elected assembly.

Devolution could make the Northern Powerhouse agenda a reality. It would transform Yorkshire. It has to happen if we are to pay our way.

Brexit is an issue that complicates matters rather than helps. We have a withdrawal agreement, of sorts. We now need to concentrate on our future relationships and get the best deals for Yorkshire and for the UK as a whole.

The changes envisaged as a result of devolution would be much more far reaching and profound than anything that could be delivered by Brexit. Most leading economic authorities agree that the changes would result in positive economic outcomes. There are, however, different opinions on the scale of these outcomes. Also, there are risks. Most of these relate to the possibility that the initiative might not fully deliver the benefits envisaged. The key factors here are that the powers, authorities and responsibilities devolved need to be sufficient to get the job done. The major risk arises from not doing devolution at all. The economy will continue to decline, living standards will fall and once prosperous areas could fade.

Devolution will mean a lot of work if we are to get it right, however, we believe that it is an opportunity that we simply cannot afford to pass up!

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