A Federalised Britain is a Pie-in-the-Sky Fantasy

The need for more devolution is one of the few areas of genuine consensus in British politics. From Boris Johnson’s levelling up programme to Gordon Brown’s proposed constitutional reforms, ‘the more devolution, the better’ has emerged as the unofficial slogan of Britain’s ruling classes. Politicians of all stripes line up to propose new metro mayors, PCCs and obscure assemblies. ‘Only when parliament is abolished and replaced with 37 regional authorities will Britain be saved!’ cry the devo-maxxers. 

Neither the left nor the right is immune from this misguided thinking - but the right should know better. The idea that different regions will compete to lower taxes and slash regulation rests on a series of hopelessly naive assumptions. The UK is not the US - it is a far smaller country where economic hubs bleed across arbitrary regional boundaries. There is certainly no British equivalent to California or Texas. While competition between states works well in the US, in the UK, more devolution simply leads to an expansion of bureaucracy.

The Scottish Enlightenment (regularly marginalised within nationalist discourse) provides an alternative free-market model to decentralisation. This unprecedented moment of intellectual and economic flourishing fundamentally altered the history of human thought, elevating Scotland's worldwide reputation. Edinburgh was dubbed ‘The Athens of the North’ while Glasgow emerged as the second city of the British Empire. It also witnessed the rise of one Adam Smith.

This period of outsized Scottish influence emerged from a climate where independent Scottish institutions had recently been abolished. As Smith himself put it, ‘by the union with England, the middling and inferior ranks of people in Scotland gained a complete deliverance from the power of an aristocracy which had always before oppressed them’. (How prescient those words sound today!)

By joining the UK, Scotland was free to unleash its potential. The vacuum created by the dissolution of its corrupt national institutions was filled by independent civil societies and innovative financial institutions like free banks. It was the distinct absence of government, combined with Scotland’s unique constitutional status, that caused this previously marginalised region to punch above its weight, turbo-boosting its economy and shaping the world in its image. The Scots didn’t produce the likes of David Hume, Thomas Reid or Adam Ferguson by entrenching a national political class.  

Free marketers beware! When regional officials are given more powers, they hoard them, rather than give them away. Instead of empowering their constituents, devolved assemblies create a second layer of ambitious politicians eager to expand their influence. It tends towards pork barrel politics where community champions compete for government pork – often distributed on account of its electoral, rather than economic, significance. The BBC's analysis of the second round of Levelling Up funding demonstrates that Tory constituencies were awarded a total of £1.21bn, compared with £471m in Labour ones. 

Similarly, after being granted control over tax and spending, Scotland has certainly not reconnected with its Enlightenment roots. To the dismay of liberals, the Scottish Parliament has used its newfound powers to raise rather than reduce taxes. According to the BBC, Scots earning over £50,000 are paying £1,542 more than they would elsewhere in the UK while those earning over £200,000 pay £7,478 more. Instead of promoting opportunities for business and improving the quality of essential public services, the parliament has constantly sought to expand its influence, imposing authoritarian dictates on everything from hate speech to alcohol consumption.

Just as spring follows winter, more government leads to more incompetence - and this doesn’t change on a local or regional level. If anything, it is heightened. Operating on smaller scales, politicians lack the resources to properly consider legislation leading to poor decision-making. The recent string of council bankruptcies gives us a flavour of what we can expect following a proliferation of similar regional bodies. Over the next 2 years, bankrupt Birmingham will have to raise council tax by a staggering 21%.  Similarly, a cursory expansion of the scandals facing devolved bodies demonstrates that the murky realities of political power certainly do not dissolve as size diminishes. 

Instead of leasing out its powers to new, expensive assemblies, the UK government should skip the middleman and implement free-market ideas itself, imposing lower taxes and liberalising the planning system. It could even use national powers to create Special Economic Zones, encouraging investment in less productive regions. There is no need to rely on devolved bodies to do this job. Although the UK is regularly criticised for over-centralisation, a strong national government makes sense given our size and economic structure.

With the possible exception of Northern Ireland, decentralisation has caused more harm than good. The vision of a free-market federalised Britain of regional assemblies is a pie-in-the-sky fantasy that must be resisted. Whilst, where identities are strong, some representation may be necessary, these cases must be treated as exceptions rather than rules. Ultimately, a decentralised government is still government, and more government is not the answer to Britain’s problems.