Groucho Marxism

It is often said that the United Kingdom has one of the most regionally unequal economies in the western world. This statement certainly sounds plausible, and it is backed up by the data. According to figures published by the Office for National Statistics, in 2022 the Gross Value Added (GVA) per capita in the richest region of the UK (Greater London) was around $80k, around 3x the GVA of the poorest region (the North East). In France, by comparison, the GVA per capita in the richest region (Île-de-France) was around $90k, around 2x the GVA of the poorest region (Corsica). And in Germany, the GVA of the richest region (Hamburg) was also around $90k, around 2.5x the GVA of the poorest region (Mecklenburg-Vorpommern).

Thus although regional inequality in France and Germany is significant, it is not as significant in these countries as it is in the UK. There is also clearly an issue with disenfranchisement in regions of England outside London. It is surely no coincidence that the only three regions of the UK to vote in favour of remaining in the EU were Greater London, Scotland, and Northern Ireland, all of which have devolved governments (the outlier is Wales, which has a devolved government but also voted to leave the EU). You get the feeling that regions without devolved governments voted for Brexit largely out of a sense of frustration. Logically, it makes no sense for some regions of the UK to have devolved governments but for others not to.

Before we go into potential solutions, we need to first make sure we understand why regional inequality and regional disenfranchisement are problems in the first place. Regional disenfranchisement is obviously a problem, as is any kind of disenfranchisement; but it could be argued that regional inequality is only a problem if we view wealth and income through a relative lens. If we view them through an absolute lens then surely it doesn’t matter that some regions are significantly richer than others, as long as the poorer regions are not too poor – right? The problem is that regional inequality leads to political disaffection in ‘left-behind’ (i.e. relatively poor) areas, which leads people living in these areas turning to the far right – as the recent far-right march in London demonstrates.

A potential solution to these problems is federalization. Federalization goes beyond devolution, establishing regional governments that are on equal footing with central government. Although not a guaranteed solution, it would help by empowering regions with greater autonomy and decision-making power, potentially leading to fairer and more inclusive economies through tailored local policies. Regions would have powers that they hold in their own right, rather than power that is granted – and just as easily removed – by Westminster. There is a clear need in England particularly for democratic empowerment and increased local decision-making, and this can only be achieved with the level of autonomy that federalization provides.

For what it’s worth, here is my proposal for federalization of the UK. First, give Northern Ireland back to the Irish, and rename the UK as Great Britain, or better simply Britain. Next, rename regions of Britain after historical regions to which they roughly correspond to give them a sense of identity (e.g.: Scotland > Alba; North East > Northumbria; North West > Lancashire; Yorkshire and the Humber > Yorkshire; East Midlands > East Mercia; West Midlands > West Mercia; Wales > Cymru; East of England > East Anglia; Greater London > Middlesex; South East > Sussex; South West > Wessex). Then, give these regions autonomous governments and devolved powers that are constitutionally protected. Finally, move the national capital from London to Manchester, the closest major city to Britain’s geographical centre.

This last step – moving the capital from London to Manchester – would not be popular with some, and particularly not with the political elite. But there is no reason why a country’s administrative and financial centres need to be in the same city. Indeed, in many countries they aren’t. For example, in Germany, Berlin is the administrative centre and Frankfurt the financial centre; and in the US, these roles are taken by Washington and New York respectively. Moving the capital would have huge symbolic importance, as it would signal that London is not the centre of the UK. This fact often seems to be forgotten by the political establishment, but it would be a lot harder for them to forget if they didn’t live there! Perhaps then our political class might finally realise that there is a country outside of the M25.