Article
Andy Burnham will become Leader of the Labour Party and Prime Minister. He is widely expected to place devolution at the centre of his economic and political programme. He has spoken of ‘Manchesterism’ bringing power and money to local people to improve their local areas. As Mayor of Greater Manchester, Burnham has consistently argued that decisions affecting local communities should be taken closer to the people they affect. He has championed greater powers for metro mayors, stronger local government and the decentralisation of Whitehall. He has suggested creating a unit of Number 10 in the north of England to drive regional growth. The objective is straightforward: empower local leaders to drive economic growth, improve public services and develop policies tailored to the needs of their own communities.
There is much to commend in that approach. Britain remains one of the most centralised democracies in the developed world. Too many economic decisions are still made in Whitehall by departments that are often far removed from the realities of local economies. Greater devolution offers the opportunity to unlock local innovation, strengthen democratic accountability and encourage place-based economic development. If combined with pro-enterprise policies, it could be the start of a great uplift in the condition of our nation.
However, if devolution is to become the defining mission of a future Labour government, the party must also confront an important strategic and indeed political contradiction. It cannot simultaneously argue that power should be dispersed away from Westminster while advocating a closer institutional alignment with the European Union that would, in important policy areas, require greater centralisation of decision-making and greater adherence to rules developed outside the UK's own democratic institutions. The two principles stand in stark contrast.
The debate is often presented simply as one of trade. Supporters of closer alignment argue that reducing regulatory differences with the European Union would lower barriers to commerce, improve market access and encourage investment. Nobody is opposed to making trade and businesses between allies easier to operate, however, regulatory alignment is not a cost-free exercise. It inevitably involves accepting a greater degree of common rulemaking and reducing the scope for domestic policy divergence, essentially centralising power.
This matters because devolution is not simply about moving administrative responsibilities from London to city regions. Genuine devolution is about allowing different parts of the country to innovate, experiment and pursue policies that reflect their own economic strengths. It is about creating space for local initiative within a national constitutional framework. If for example, regions want to follow local procurement strategies prioritising local suppliers, how will that square with the requirement to grant access to firms all over Europe. If a region of the UK wants to reduce certain regulations to accelerate industrial growth, or turbocharge our already fantastic AI industry, how will that square with alignment to EU regulations.
If Britain increasingly aligns its regulatory framework with that of the European Union, the scope for such flexibility may narrow in areas covered by that alignment. While many EU rules allow national discretion in implementation, closer alignment generally means a stronger expectation that common standards will be maintained to preserve market access and regulatory consistency. That naturally limits the freedom of governments, and, by extension, devolved authorities to pursue significantly different approaches in those fields. More devolution at home while centralising power in alignment with the EU cannot work.
Andy Burnham has frequently argued that Greater Manchester should enjoy greater control over transport, housing, skills, economic development and aspects of health policy. Other metro mayors have advanced similar cases with reasoned and strong arguments. The underlying philosophy is that those closest to local economies are often best placed to understand their challenges and opportunities. The same principle should also apply nationally.
If Labour believes that Whitehall should trust local leaders because they possess superior knowledge of and experience in their local communities, it should also recognise the importance of preserving the United Kingdom's ability to design its own economic and regulatory policies where appropriate. The principle of subsidiarity, namely that decisions should be taken at the lowest effective level does not stop at Westminster. It should inform the entire constitutional architecture.
Britain's departure from the European Union created greater scope for our elected Parliament to determine domestic policies in areas previously influenced by EU law. That does not mean every divergence from European rules is desirable, nor does it mean cooperation with European partners should cease. Britain and the European Union have continued to cooperate closely on trade, security, research and foreign policy since we left. But cooperation does not require uniformity in every area, indeed it is highly undesirable.
One of the principal arguments advanced by supporters of devolution is that economic success often depends upon local flexibility. There is, of course, a debate around the contribution devolution makes to economic growth. But different regions have different industrial structures, labour markets and demographic challenges. The same logic applies internationally. The UK economy differs in important respects from those of many EU member states, particularly in eastern and southern Europe, and there may be occasions where different regulatory approaches better suit British economic circumstances and vice versa.
This is particularly relevant to Labour's wider economic ambitions. If the party wishes to rebuild manufacturing, encourage investment, reform planning, support innovation and develop a modern industrial strategy, it will need sufficient policy flexibility to respond to changing economic conditions. That flexibility should not be surrendered lightly, indeed, if it is then many of those policy areas advocated by Andy Burnham will not be achievable.
None of this requires Labour to adopt an antagonistic relationship with Europe. Britain should seek constructive, pragmatic and stable relations with its European neighbours. Cooperation on scientific research, security, policing, higher education and trade will remain firmly in the national interest. Businesses also value certainty and predictable trading relationships. The business relationship is particularly important. Since we left the EU, new arrangements are in place, businesses have adapted and business is operating well. We do not need a disruptive period that tears up the new norm at cost to British and indeed European firms.
There is an important distinction between cooperation and institutional alignment. Cooperation allows sovereign governments to work together while retaining the ability to adapt domestic policy. Alignment, by contrast, generally reduces the scope for independent policy choices in the areas concerned. A government that wishes to champion devolution should be cautious about adopting arrangements that may constrain future democratic decision-making
The challenge for a future Labour government is therefore not to choose between Europe and Britain, but to remain consistent in its constitutional philosophy. If Labour's central belief is that power works best when exercised closer to the people, that principle should apply as broadly as possible. Decisions should be taken locally where they can be, nationally where they must be, and internationally only where collective action is clearly necessary. Decisions are best made in Westminster as opposed to Brussels or Strasbourg.
Andy Burnham's devolution agenda has the potential to reshape the British state for the better. It could create more responsive government, stronger local economies and greater democratic accountability. But for that vision to succeed, Labour must avoid sending conflicting constitutional signals and contrasting political messages. It cannot convincingly argue that power should flow outwards from Whitehall while simultaneously advocating institutional arrangements that, in some policy areas, involve greater central coordination and reduced domestic discretion.
A ‘reset’ with the EU will achieve little if nothing in terms of growth. The future of Britain's economy will depend upon investment, productivity and innovation. Those objectives require empowered local leaders, accountable national institutions and constructive international partnerships. Labour should pursue all three. But it should ensure that its commitment to devolution remains the guiding principle. If power is worth devolving from Westminster to Manchester, Birmingham and Cardiff, it should also be valued as something to preserve within Britain's own democratic institutions wherever possible.
