Scotland continues to force the pace of change in the UK. Yorkshire, with a similar population to Scotland’s, needs the same devolution of powers if it is to have a dynamic, growing economy – together with the other northern regions. That requires directly elected regional parliaments with their own tax-raising powers. As a recent study by the Campaign for the North group makes clear, such a radical devolution of powers will bring enormous economic benefits.
Northern regions should have the flexibility to use their asset base to finance a programme of investment in our inadequate infrastructure – not least transport. A regional government would have considerably more clout to raise funds on international markets than the “combined authorities” currently being imposed on us, or the weak and unaccountable local enterprise partnerships. Regional government could significantly reduce the overall cost of government to taxpayers through more focused procurement.
The rail franchising process is a perfect example where a joint approach with other northern regions would work better than the current London-centric approach. But why not regionally owned rail networks?
Tax collection should be wholly devolved to the regions, Scotland and Wales. In Yorkshire, for example, there should be a new HMRC Yorkshire, which would be responsible both for raising revenue to cover the cost of regional services as well as those services reserved to central government, such as defence and foreign affairs.
As the Campaign for the North study says, nothing should be off limits. Capital gains tax, corporate taxation, income tax and inheritance tax should all be potential sources of revenue for devolved government, as should the assets within a region, such as its mineral and energy resources. A Yorkshire government should be empowered to create an enterprise-friendly environment, which supports investment and growth through a regional development agency accountable to the Yorkshire parliament. It would provide the impetus to move away from a low-wage economy and work with employers, unions and local government in the creation of good-quality apprenticeships and the development of continuing vocational training to provide the highly skilled jobs our region needs.
Northern business also needs to be able to rely on a supportive banking system. British banks have been irresponsibly deregulated, are entirely profit-oriented and driven by short-termism. They are at the heart of Britain’s disastrous culture of economic centralism, almost wholly centred on the city of London.
What is needed is a regional banking system that supports, invests in and partners with the north’s businesses, taking the long view and structured to deliver the outcomes needed. Regional banks must be committed to our communities and ready to support innovation and the development of the industries of the future.
Germany’s banking system shows what is possible. Public banks (Sparkassen and Landesbanken) account for 40% of the country’s banking system. They work closely with the regional governments to allow regions to capitalise on their strengths, needs and opportunities. This kind of model would allow all our regions to succeed. This year’s Tour de France proved that when Yorkshire is given the tools it can do a brilliant job. A new and progressive regional politics is beginning to stir in Yorkshire and other regions. It is time for real change to deliver a federal Britain we can all be proud of.
Paul Salveson is Yorkshire First’s candidate for Colne Valley in the general election. He is a visiting professor in transport at the University of Huddersfield
