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Good morning. Keir Starmer has a big set of proposals to devolve power out of Whitehall as part of his growth strategy.
What’s not part of his growth strategy: taking the UK back into the European single market. Some thoughts on all that in today’s note.
Inside Politics is edited by Georgina Quach. Follow Stephen on Twitter @stephenkb and please send gossip, thoughts and feedback to [email protected].
EU’re the one that I want
The big overarching argument in Gordon Brown’s big report on devolution and economic growth for Keir Starmer is that the UK’s highly centralised state and its economic stagnation are linked.
This is, of course, also the big overarching argument in Michael Gove’s white paper on levelling up. There is now a consensus across the two political parties about this problem. The big divide is over how far they think they need to go to solve it. The proposals in Brown’s report mark a much bigger shift than that proposed by Rishi Sunak, as Jen Williams and Jim Pickard explain.
The biggest loser in Whitehall, should these recommendations become Labour policies and Keir Starmer take office, is the Department for Work and Pensions: these proposals would devolve control over jobcentres and skills alongside transport and planning to local government.
In some ways, this isn’t that deep: the UK’s cities are less economically productive than equivalently sized cities elsewhere in Europe and they have less political power. Devolve more powers to local areas, and they will grow faster. That holds true even for London: London, like New York, is a global megacity and their sheer size makes them slightly more policy-resistant: they can shrug off both bad policies and limits on their ability to grow just by drawing on their own resources. The best illustration of that is London’s Underground, built originally by private enterprise rather than the state.
It seems likely in my view that Starmer, Gove and Brown are right and if you devolve more power to local government you help to unlock the potential of the UK’s cities and regions. A good heuristic, if you are trying to work out why Lyon in France is more economically dynamic than Manchester, is to start with the things that Lyon has that Manchester doesn’t. Top of that list is greater control over its own destiny, including the ability to raise some of its own revenues.
Of course, the other thing that Lyon has that Manchester doesn’t is unfettered access to the European single market. When questioned about that yesterday, Keir Starmer claimed, somewhat implausibly, that being in the single market would have no impact on the UK’s growth, saying it would create “years of uncertainty” for businesses.
Now, it’s true to say that the underperformance of the UK’s cities across Europe and its overly centralised structure predates the UK’s exit from the EU. As well as being good policy, boosting the power of the UK’s nations and regions is a good line to take for a Labour party that doesn’t want to reopen the Brexit debate for fear of the electoral consequences (do read this fantastic analysis by George Parker on all that if you haven’t yet).
The trouble is that, yes, the UK’s growth problem is not all Brexit-related, but Brexit does not help the UK’s sluggishness. In fact, we can say with growing certainty that Brexit has made it worse, as this piece by Chris Giles makes clear.
Now, of course, we all know that Keir Starmer and essentially everyone on his front bench realise this is the case. As we can see in the polls, a majority of British people now think that Brexit was a mistake and, therefore, the number of Remainers who think we were right to leave and that rejoining some or all of the institutions of the EU would not improve things is very small indeed.
Of course, it’s not as simple as just rejoining: the policy obstacles to the UK rejoining aren’t just in UK politics, they are across the EU27 as well. Nonetheless, it’s UK politics that is this newsletter’s core beat (if you’re a premium FT subscriber, you can sign up to Europe Express for commentary on all that.)
Patrick Maguire, my old political correspondent at the New Statesman, has written a smart piece for the Times (registration required) that sets out Starmer’s and Labour’s real position very well: a Labour government would seek to get closer to the EU, and there are few people in Labour who deny that we would be better off if we were still in the single market.
But Labour is not going to exert itself to make that case or to persuade voters. That said, I think it’s worth noting one big, important and essentially accidental change that a Labour government would bring about as far as the UK’s Brexit politics are concerned. At a stroke, a Labour government would free up vast swaths of civic society and lobbying organisations, many of which think that Brexit is a disaster but feel they have to pussyfoot around the topic to remain on Downing Street’s Christmas card list.
The Labour leadership in general and Starmer in particular are not going to risk taking political damage to argue for EU membership anytime soon. However, if Starmer does take office, he will find that Britain’s pro-Europeans gain a confidence and energy that even now many of them lack. Just as his predecessor found himself bounced into a more pro-EU policy than he wanted, a Starmer government would very likely end up in the same place.
Now try this
Casablanca is coming back to cinemas to mark its 80th anniversary, and not just to independent picturehouses in big cities. You can book tickets via Cineworld, Odeon, Vue and many other chains in addition to Picturehouse, Curzon and other smaller places. I have booked my tickets and I am very, very excited to see one of my favourite films in cinema for the first time. If you haven’t seen Casablanca, I really can’t recommend it enough: a classic of cinema that hasn’t aged a day.
Top stories today
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New Christmas rail strike | The RMT union has called new action — between 6pm on Christmas Eve and 6am on December 27 — and urged its members to reject a new industry pay offer.
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Housebuilding targets knocked down | Rishi Sunak has diluted a manifesto commitment to build 300,000 new homes a year in the UK in an effort to stave off a rebellion by Conservative MPs who chiefly represent more prosperous southern constituencies.
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Regulating the ‘wild west’ | The Treasury is finalising plans for a package of sweeping rules to regulate the cryptocurrency industry, including limits on foreign companies selling into the UK, provisions for how to deal with the collapse of companies and restrictions on the advertising of products.
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NHS pension reform to retain staff | The UK is seeking to overhaul the NHS retirement scheme in an effort to draw back thousands of retired staff and keep doctors from quitting over pension tax bills as patient waiting lists soar.
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Burst pipes rise after drought | Thames Water warned it was under pressure from rising inflation as higher energy, chemicals, labour and borrowing costs weighed on the UK’s largest provider of water and sewage services. Last month Ofwat said Thames and Southern Water were the two “worst” water companies on a range of measures from compliance on water treatment to sewage pollution and flooding.
