We were delighted to welcome Tristram Hunt MP to the People’s History Museum in Manchester to set out his vision for a Labour approach to devolution to cities.
In his speech, Tristram suggested three areas where the party could go further than what has been offered by the devolution deals so far: greater fiscal devolution, public service reform, and local civic ownership of utilities. In the Q&A session after the speech, Tristram addressed concerns about local engagement with the devolution process, how to square devolution with redistribution, and the extent to which the programme he has set out is supported by the Labour leadership.
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Read the full speech below
Thank you to the Centre for Cities for inviting me to speak tonight. No organisation has promoted the municipal gospel with as much fervour over the last decade.
And there is certainly no better place to preach its socialist version than this museum in this great city. Under Nick Mansfield and Katy Ashton, the People’s History Museum has brilliantly re-imagined the story of Manchester and the popular culture of politics.
From Chartism to Co-operatives; Methodism to Marxism, it houses the political Pantheon of the Labour Movement.
However, this evening I want to talk about Manchester’s other great historical contribution: the modern city. And why we in the Labour Party – rather than being fearful or anxious – should be very excited about its return to political prominence.
In Manchester, Liverpool and across industrial Britain, the Labour movement and progressive politics came into being to civilise the last urban century. And as we stand on the precipice of a new industrial revolution, the power of the city waxes once again.
Whilst national governments groan under the weight of economic stagnation and institutional collapse, dynamic, open, culturally confident cities are pulling further and further ahead.
Now, as we look out across a continent governed by the centre-right and in parts threatened by outright fascism, hope is not a commodity in plentiful supply.
Yet what is so fascinating is that the leading cities of this emergent economic settlement – Hamburg, Berlin, Copenhagen, Manchester, Newcastle, Liverpool – also play host to Europe’s most successful progressive politicians.
Friends, my message tonight is this: the Labour Party must champion the political devolution and economic democracy these so-called ‘Borgen Cities’ represent.
Just as importantly, my message tonight is that a radical decentralisation of power is also essential for our historic mission of reducing inequality;
That building a less divided Britain relies on a public culture that can empower civic activism and unleash local pride;
And that the evidence clearly shows how devolved government is more responsive, accountable, trusted, knowledgeable, and innovative than Westminster when it comes to making difficult decisions in the community interest.
Giving away power can help us reduce inequality in a material sense and start to heal the ties of social obligation that inequality has begun to fray.
This will be not be without its challenges.
For the Labour Party it requires nothing less than a philosophical deep clean.
A rejection of our dominant centralist orthodoxy.
And a rediscovery of our municipal socialist roots.
But if we draw upon the experience of these vibrant ‘Borgen Cities’ – and embrace the possibilities they afford – then there is absolutely no reason why we should not look forward to an urban century ripe with progressive potential.
A MANCUNIAN LEGACY
However, it is not just the onrushing future which should be our guide. We should also mine the riches of the past.
Because I would also argue that the socialist ethic has never been well nurtured by a remote and commanding state. That actually Labour’s ‘long march through the institutions’ began at an urban level during the 19th century.
It was there in the ‘municipal gospel’ of Joseph Chamberlain in Birmingham.
It was there in the community collectivism of the ‘Glasgow Stalwarts’ who transformed Clydeside into a test-case for ‘municipal socialism’: taking control of gas, water, markets, baths, washhouses, slaughterhouses, parks, botanic gardens, art galleries, museums, libraries, and tramways so they work in the interests of the common good.
But most of all it was here in the voluntary associations, mechanical institutes, labour exchanges, friendly societies and nascent trade unions of Manchester.
“The most marvellous thing in modern history is the influence which institutions such as Athenaeums and Mechanics Institutes have exercised over the community,” the congregationalist historian Richard Vaughan told a Manchester crowd in 1847.
“Each man stimulates his fellow, and the result is a greater intelligence. The shop, the factory, or the market-place; the local association, the news-room, or the religious meeting, all facilitate this invigorating contact of mind with mind.”
In short, Vaughan saw the industrial city as the apotheosis of human progress. And as the biggest and boldest, it was Manchester that best represented the ‘independence’, ‘self-reliance’ and ‘equality of condition’ of the age.
Friedrich Engels, that other great Manchester man, was absolutely horrified by such political evolution. He had come to Manchester in 1842 specifically to catch sight of class war and a proletarian revolution.
“The English proletariat is actually becoming more and more bourgeois, so that the ultimate aim of this most bourgeois of all nations would appear to be the possession, alongside the bourgeoisie, of a bourgeois aristocracy and a bourgeois proletariat,” he grumbled.
The growth of trade unions and political parties was not what he had in mind. Yet what so disgusted Engels can serve as an important lesson for the future of socialism, the Labour Party and indeed this country.
Because what those high-minded Victorian ideals helped to create was a public realm predisposed towards social justice, civic activism and community service.
A public realm which, when democratised later in the century, gave birth to the pragmatic municipalism that armed the early Labour Party’s with its distinctive, practical character.
And which in turn helped lay the ethical and political foundations for 1945 and the golden age of social democracy.
This is a journey we must begin again at the start.
And, once again, it is the dynamism of Manchester that shows Labour the way.
However, we have to be blunt.
Because the truth is the Labour Party, driven by Fabianism and misguided Clause IV statism, played a full and active role in the march towards Whitehall centralism.
Nye Bevan set out the challenge best when he recounted his formative political years.
“‘Very important man. That’s Councillor Jackson’, Bevan’s father had said to him. ‘What’s the Council?’ he asked. ‘Very important place indeed and they are very powerful men’ his father has replied. ‘When I get older I said to myself; the place to get to is the Council. So I worked very hard and, in association with my fellows, when I was about twenty years of age, I got on the Council. I discovered when I got there that power had been there, but it had just gone. So I made some enquiries, being an earnest student of social affairs, and I learned that the power had slipped down to the County Council. That was where it was and where it had gone to. So I worked very hard again and I got there and it had gone from there too”.
Where it had gone was Westminster.
And what Bevan was describing was the steady, slow, but unmistakable emasculation of civic autonomy and local government in the mid-20th century.
It began with early 1900s demands for ‘national efficiency’ which left little room for municipal autonomy. The emergent vogue was for state uniformity rather than civic pride, with Liberal legislation in 1906 and 1911 consciously carving out local authority provision.
A sign of the times was revealed in 1907 when Winston Churchill indignantly rejected a Cabinet position at the Local Government Board. “I refuse to be shut up in a soup kitchen with Mrs Sidney Webb,” he remarked.
But for Labour at least the statist impulse was counterbalanced by the Labourist, ‘stakeholder’ trade unionism of Ernie Bevin and municipal stalwarts like Herbert Morrison and the London County Council.
Indeed, the inter-war years saw something of an Indian Summer for municipal socialism.
During those decades whole spheres of public life were owned and managed locally that are now seen as entirely the province of national government or the private sector. No wonder Beatrice Webb was often heard complaining about, “the characteristic English preference for local over central administration.”
However, somewhere not long after the 1945 victory, both the Labour Party and the country began to lose its balance.
Maybe it was the growing dominance of Keynesian central planning.
Maybe it was Bevan’s genius in creating a National Health Service which so perfectly embodied the common good.
Either way, ever since we have too often succumbed to behaving like the party of ‘the man in Whitehall knows best’. Of hospital bedpans crashing in Tredegar and echoing through Westminster’s corridors of power.
This heritage cost us dearly at the general election. In Shadow Cabinet we often used to talk about how handing back power was essential for tackling the great challenges of our time.
From mitigating London’s economic dominance to raising productivity and reinvigorating local democracy.
And in the work Hilary Benn did on the devolution of transport powers, the work programme and the proper integration of public services you can still see the fruits of those discussions.
However, despite this, despite Labour leading the way on devolution for much of the last Parliament, when George Osborne announced that first Manchester deal our centralist instincts returned and we allowed the Tories to capture the spirit of the moment.
As a result, we missed a golden opportunity to show how we could deliver – in a time of tight public finances – the three fundamental promises of the Labour Party: to reduce economic unfairness; strengthen our communities; and revitalise our national democracy.
In short we lacked, in the deadening language of public management, a theory of change.
My message in Manchester this evening is that the time for equivocation is over.
We must go further and faster than the Tories on devolution.
And embrace a new radical localism that puts power back in the hands of our communities and restores a sense of civic pride.
POWER AND THE POWERHOUSE
After all, the needs of Stoke-on-Trent are different to the needs of Stoke Newington. And the fight for a better world always begins in your own back yard. You dig where you stand.
However, I also believe local communities and local politicians will understand those different needs far better than civil servants in London.
The evidence for this is compelling. According to the OECD a more decentralised approach to government correlates with stronger growth; more social investment; better educational outcomes; higher wellbeing and less regional inequality.
And more than that the growth it produces is much more inclusive with a significantly larger proportion of money staying within the community.
However, the real reason I support localism is because I believe in people.
Look around the world. Everywhere but everywhere centralised authority is in crisis. It does not speak to what people want in this fast-moving, hyper-connected, pluralistic world.
People want a say. People want a stake. People want to participate. People want power.
And as Benjamin Barber has lucidly argued in his compelling work, If Mayors Ruled the World: Dysfunctional Nations; Rising Cities, pragmatic, metropolitan leaders are proving more effective, popular and innovative as political leaders all around the world.
Therefore, today, the first step in any radical decentralisation of power must be to take advantage of the new devolution settlements on offer.
And this requires us to reshape not reject the current Tory programme.
Do not mistake me: I know there is something almost ‘Tammany Hall’ like in the secretive, haphazard, controlling approach the Government has taken towards negotiating these deals.
And I remain deeply frustrated that such little thought has been given to devolution beyond our larger cities.
Because I do not see why, if the Government believes devolution is a driver of economic resilience, a new civic settlement should be denied to places like Stoke-on-Trent. Or Barnstaple. Or Southend.
In fact, I would go further: it is these cities and towns at the sharper end of globalisation’s unequal effects that most need the prosperity and civic pride we trust devolution brings.
Then there is the almost contemptuous attitude towards the ability of local government from too many Tory ministers. I mean: what could be more statist than compelling local authorities and charitable housing associations to sell-off their affordable housing stock?
More authoritarian than banning parents from becoming school governors whilst also mandating central control through forced academisation?
However, if you want statistics which belie this Government’s ‘One Nation’ credentials then look no further than its partisan approach to local government finance.
The average cut per household in a Labour area will be more than £340 per household by the end of this parliament. For Tory areas just £68.
Nevertheless, I still believe Labour’s local leaders have done right by their constituents in embracing the chance to reshape the Tory state orthodoxy.
As Mike Emmerich of MetroDynamics has argued, “There are reasons to believe that the economy of the North is being harmed by cuts in public spending, and that austerity, far from delivering reductions in public spending, is generating additional and unaffordable social cost. But the process of building a Northern Powerhouse, of growing the Northern cities together to stimulate the economy, is without doubt one policy that makes economic sense.”
So there should be pride rather than shame in Labour leaders seeking to get the best out of these deals. After all, our constitution commits us squarely and unashamedly for power.
So, health services run in Manchester by this local Labour leadership will be a lot more progressive than those still tied to the Tory central state.
And this ultimately is the rub about the devo-deals and the so-called ‘Northern Powerhouse’. Barring a political disaster next month many of the relevant areas will democratically belong to Labour.
Which offers us a tremendous platform to demonstrate the value of progressive Labour government to the country.
To show how we can tackle inequality, strengthen the common good and hand back power.
We are already seeing it in action.
Like Oldham Council’s Youth Guarantee, making sure every 18 year old in the council has a place in either education or training.
Like Leeds Council taking advantage of right to buy legislation to buy back council homes and dramatically increase the city’s affordable housing stock.
Or like the Coventry Investment Fund, a £50m council-backed initiative to help grow the city’s entrepreneurs and small businesses.
All Labour councils actively transforming England and its politics from the bottom-up.
Laying the foundations for Labour ballot-box success in just a few weeks’ time.
But we cannot simply sit back and leave this work to our local government leaders.
The challenge for those of us in Westminster is to learn from our civic leaders and develop a localist vision which delivers the fundamental purpose of a Labour Government.
And I believe there are three key areas we should focus upon.
Number one: economic democracy.
Financial power in this country remains massively centralised – for every pound taxed locally, only 9 pence comes back from the Treasury.
And only 5 per cent of taxpayer’s money here is retained by local government.
In Sweden, it is more than a third. In France, around a half. Whilst in Canada, it is a staggering 80 per cent.
The Tories have promised to devolve business rates – we wait to hear how this will be squared with redistribution.
But I remain confident business rates can be devolved – that the incentive structure of local government can be improved – without needlessly tearing up this country’s social democratic fabric.
After all, high levels of fiscal retention don’t seem to have particularly harmed redistributive social justice in Sweden.
Centralism has not done enough to tackle inequality. After all, when the only fiscal vehicles left to councils are car-parking charges and planning permission fees, it massively inhibits capacity, democracy and growth.
So we should look at local retention of more taxes.
And why not give local government the powers to introduce tourist levies and hotel taxes?
In Tokyo, they levy something called an ‘establishment tax’…
The lesson of urban history is that real political power always follows the money. But if we want to reinvigorate local democracy then we do need to give local authorities much more fiscal autonomy.
However, what we also need are institutions that can help decentralise access to start-up capital and investment.
Let’s be honest: centralised banks to do not understand the intricacies of local economies at the best of time. But when it comes to localist economic innovation they understand even less.
So now civic leaders, social entrepreneurs and wealth creators are coming together to create innovative new funds that boost local economic resilience.
The Wessex Regeneration Trust in Dorset.
The Manchester Growth Company in this city.
Or the new council and LGA-backed Municipal Bonds Agency.
We should welcome and encourage that. But the next Labour Government should also roll up its sleeves and begin the hard work of local institution building.
In Germany the Sparkassen regional banking system connects local savings with local businesses. It underpins both its extraordinarily equal spread of prosperity and a broader sense of shared responsibility between finance and industry.
We need to create a system like that here – every major city should have its own municipal bank.
Working hand in hand with a proper national investment strategy.
PUBLIC SERVICE REFORM
The next area we need to focus on is public service reform.
Because I believe this has been one of the great oversights of the Tory approach. They remain far too in hoc to the old corporatism of the Urban Development Corporations.
So, outside of this city and its unique health deal the opportunity for radical public service has largely been ignored.
This is a massive missed opportunity.
Because decentralisation offers the ability to deliver public services more effectively than the central state.
Its greater capacity to ‘join-up’ public services beyond departmental silos gives the local state a crucial innovative edge in tackling the complexities of modern social injustice.
And let’s face it: the traditional Whitehall model simply cannot cope with the burden of austerity. The NHS funding gap will be £22bn a year by 2020. In social care, £3bn a year.
I do not believe the Labour Party can place itself in the position where its only answer to this challenge is simply to fight the cuts. This is also a question of delivery.
Labour needs to back the ingenuity of the local state.
Our devolution offer should go beyond economic resilience and give cities and councils the tools they need to fight for social justice.
Without effective early years education, pre-natal classes, maternal health and wellbeing support, then we are not giving every child an equal chance at success.
And without an effective welfare to work programme then the scars of long-term unemployment and economic inequality will only deepen.
Labour must go beyond the Government’s piecemeal approach. Go beyond local authorities too and look at policies such as Community Land Trusts which put power directly in the hands of people and communities themselves.
As well as devolving powers to redesign services in welfare, health, social care and, most importantly, schools and education.
You cannot deliver economic resilience and social justice without good schooling. And Sir Michael Wilshaw was absolutely right: without it the Northern Powerhouse will “splutter and die”.
If Labour had won the election we would be devolving powers in schooling. Instead, the Government has upped the ante on centralisation.
This is absurd. You just cannot run 10,000 schools from Whitehall.
On practical and ethical grounds, there has to be an element of local planning and democracy, of collaboration between schools for raising standards and spending money wisely.
Every city should have a dedicated schools commissioner. Appointed by and democratically accountable to the relevant city, combined or local authority.
And every city and local authority should have the freedom and financial security they need to pursue early intervention.
We need to rip down the ring fences.
Move towards long budget cycles, unconstrained by departmental bickering.
Finally, scorch the silos. People’s lives do not fit neatly inside them.
It is increasingly outdated to think our social justice ambitions ever could.
THE COMMON GOOD
But there is another whole area of policy which, in truth, Labour has ignored for decades.
An area which I do not believe any truly ‘common good’ approach to civic politics can ignore.
That issue is ownership.
And I believe it could become the cornerstone of our municipal socialist revival.
All around the world, local governments are finding ways to take control of their energy, water and broadband supplies.
In Germany more than 100 contracts for energy distribution networks or service delivery have returned to the public sector since 2000.
And you can see that beginning to happen here in the UK too.
Whether directly supplied and owned by cities and councils, such as in Nottingham and Woking, or through co-operative, community trusts as in Bath or Brighton.
Furthermore, in the same time period, 235 towns and cities across the world have municipalised their water and sanitation services following public dissatisfaction with private providers.
And with Berlin, Atlanta, Paris, Houston on the list, this is no leftists rogue gallery.
In fact, in America in particular this movement has often been driven by conservative Republican politicians.
A recognition of the simple fact that civic ownership can lead, not just to better public services, but also to a much simpler, more efficient use of taxpayers’ money.
Labour must draw on its proud heritage of ‘municipal socialism’ to reinvent England’s towns and cities.
Usher in a new era of civic provision for our essential services.
So I am calling on the Government to look specifically at how water services in England can be provided by local, civic organisations as it implements legislation to increase competition in the water industry – something that Ofwat should also consider as it conducts its review of retail household markets over the coming months.
But we must also make sure that we’re giving local leaders the support they need to compete in the changing energy and broadband markets, whether through better access to finance or reversing some recent damaging policy changes – such as the removal of Social Investment Tax Relief from community energy projects.
In the 1940s municipal ownership of gas, water and electric utilities accounted for 80 per cent of total provision nationwide, with receipts from these essential services providing 30 per cent of local authorities’ income.
Reviving that ethos can boost local economic resilience and provide cheaper, more efficient services.
It is about putting real power into the Powerhouse.
Since the early 1800s, Manchester has been a city of the future.
The reason why Friedrich Engels, Alexis de Tocqueville, and even Otto von Bismarck came to Manchester was to get a preview of the socio-economic change coming their way.
The reason why my great-grandfather, James Clerk Maxwell Garnett, lived and worked in Manchester, as Principal of the College of Technology, was to be at the cutting-edge of science and innovation.
Before I entered politics, my professional life was as an urban historian and the wonder of this original, modern city was always its sense of autonomy, power and purpose.
Today, we are gathered in a museum dedicated to the past, but in a city once again dictating the future.
The Labour Party’s approach to the new urban settlement must be to combine both.
Unite our historic mission to battle inequality, with the new tools of political devolution and economic democracy.
For we stand on the cusp of a new generation of Progressive leaders taking control of real power in cities likes Manchester, Newcastle, Birmingham and Bristol.
The insight of the modern era is that tackling inequality and building a fair economy is best done by local people and urban power.
It is time to forge a Labour League of Progressive Cities determined to use new powers to grow their economies, educate their young people, build new housing, and renew their democracy.
Labour Manchester is leading the way.
And, like those busy bees engrained in the mosaic tiles of Manchester Town Hall, we in Westminster should help pollinate your success across the country.