At the TaxPayers' Alliance, we've done a lot of work on the Regional Development Agencies.
In 2008 we looked at whether progress had been made towards their key objectives like narrowing the north-south divide, it hadn't. More recently, we released a new report showing the kind of grants they have been making. We found that 62 per cent of the grants were going to predominantly public sector organisations or projects. They should be abolished and we hope that the coalition don't backtrack from the clear language on this issue in the Emergency Budget. The forthcoming White Paper which will put the detail on today's announcement should reject the very idea that the best way to help businesses is to take their money in taxes then give some of it back through big, regional bureaucracies.
But I wanted to respond to a point made today on his Telegraph blog by Ed West. He argues that we should replace the RDAs with democratic assemblies, like the one rejected in the North East at a referendum. Here is the core of his argument:
"But are the Tories opposed to regionalisation? I don’t see why. Personally I think a federal United Kingdom is a great idea, but it has to be authentically democratic, not a collection of talking shops comprising local councillors and quangocrats, which is what Labour’s original plans entailed.
There’s no reason why Britain can’t become fully federal with 11 regions (or “states” if the Scots and Welsh prefer it) all with elected first ministers and assemblies, and with full or dominant control of police, education, welfare and tax. It would help to take away power from London, which has far too much economic and cultural power, and rejuvenate regional capitals; it would result in national political leaders with experience of government, not just party politics; it would allow innovations in services to be tried and tested; but best of all, as in the USA, politics would become much more Right-wing."
At the TaxPayers' Alliance, we are very much in favour of fiscal decentralisation. But we don't need to hand responsibility to the regions. In reality, there is no reason that the local authorities can't do the job.
Regions are more remote and less rooted in well understood boundaries that local people can relate to. Like the European Union, regional assemblies will be democracies without a demos. The only argument for them is the idea that local authorities are just too small, that we need bigger areas for decentralised services to be viable. That argument doesn't stand up to scrutiny.
Swiss cantons are responsible for huge areas of policy. For example, the excellent Swiss healthcare system is almost entirely run by the cantons. The national government sets a basic level of mandatory health insurance coverage and then each canton sets policy beyond that. There is more detail in this report.
Switzerland has a population of under 8 million and 26 cantons. That is less than 300,000 people per canton.
By contrast, in England there are 33 boroughs in London including the City, 28 counties, 54 unitary authorities and 36 metropolitan districts. The population is over 51 million. That means there are over 340,000 people per authority.
So power should be devolved down from central government. But there is no need to set up regional governments to achieve that admirable objective.
