North East Devolution and Levelling Up

Free marketeers set out levelling up vision

A vision of levelling up through low government spending, low taxes, limited regulation and risk-taking entrepreneurship has been published by a think tank headed by a North East Conservative MP.

The report ’30 Ideas for 2030′ from the Free Market Forum, gives an insight into thinking about levelling up within some sections of the Tory Party.

‘We want to lead the conversation within the Conservative Party on the importance of retaining the traditions of fiscal prudence, low taxes and limited regulation – key pillars to support growth and opportunity’ write the co-chairs of the FMF, introducing the report on today’s ConservativeHome website.

One of those chairs is Dehenna Davison, MP for Bishop Auckland, along with Greg Smith, MP for Buckingham.

‘For many in left behind parts of the country’ they write, ‘the reality is that the private sector is stifled by a bloated public sector that is almost Soviet-sized in some areas of the north. Thirteen years of Labour – whose ambition seemed to amount to little more than throwing money at those left behind and hope for the best – was followed by little change from well-meaning Conservative governments since 2010.

‘This has meant that for decades many of our communities could not even begin to imagine a world where they could succeed through entrepreneurism or seizing opportunities for themselves, rather than just waiting for the state to do it for them’.

Pointing to the statistic that in the North East 44 per cent of those with an idea and desire to start a new business lack the confidence to take the plunge, compared to less than 30 per cent nationally, they add: ‘Clearly, restoring a culture of risk is needed if we are going to help these places succeed’.

The 30 ideas set out in the report range from tax reform to releasing green belt land for housing and turning the BBC into a subscriber-owned mutual. One idea, put forward by the MP for Workington, Mark Jenkinson, is for more devolution.

‘But it is imperative’ he writes, ‘that with a devolution of powers must come a commensurate devolution of taxation powers. If local authorities and administrations want the ability to have a serious role in policy making they must also have to make the hard choices about how to pay for it. Therefore, real power should be given to local communities to both impact policy locally and then reap the rewards of taking prudent pro-growth decisions.’

The FMF approach is very different from that of most North East councils, with their dependence on government funding and constant ‘asks’ for more. The councils, however, are hidebound by a centralised system which leaves them with little alternative and worried that even if they were granted more tax-raising powers their weak tax base would leave them much less well resourced than in other parts of the country.

Given the risk-averse approach to devolution that some North East councils have shown so far, the question is whether, even if offered greater powers, including over taxation, they would take them. While constantly criticising the government for not giving them enough, they have been made dependent on it.