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13.07.16

Councils must fight for greater de-centralisation post-Brexit, says Cable

Former business secretary Sir Vince Cable has said that local government should continue to fight for greater devolution and de-centralisation after the country voted to leave the European Union.

Speaking at the CIPFA Annual Conference, Cable said that one of the healthy things, which started under the Coalition government and was championed by George Osborne, were the “beginnings of serious de-centralisation to local government”.

While he admitted that some might say devolution to city-regions like Manchester, Birmingham and Leeds has not gone far enough, he said that, post-Brexit, there may be a much stronger tendency to stay on course with de-centralisation.

Earlier this week, two of the biggest devolved administrations in the north of England have promised to work together to promote growth in their regions following the UK’s vote to leave the European Union.

Cable noted that London getting greater devolution and control over its own revenue is important, but added that the capital cannot become a city-state. “But I think the move to de-centralise radically having more effective retention of revenue will become irresistible,” he said.

The senior Lib Dem figure added that he hopes the ‘super-charging’ of devolution continues, but added that Brexit will deliver an “unavoidable” and prolonged period of uncertainty, “because we do not know what kind of arrangement will be negotiated”. He even said there was likely to be a Brexit recession.

Cable did add that the new prime minister, Theresa May, has made it clear that she wants to postpone triggering Article 50 for as long as possible, as it gives the government a stronger bargaining power, “but the longer you play it the more the uncertainty and lack of clarity we have”.

Discussing the technicalities of Brexit, Cable said: “Uncertainty is now factored into the system. We do know that what is going to happen is going to be extraordinarily complex and administration-intensive. And Whitehall for the next five years, maybe, is going to be utterly absorbed in the practical problems of disentangling 12,500 directives and laws.

“In local government, you are going to have to deal with the issue about what happens when your procurement rules no longer apply, when the agency workers directive is reopened, when the rural habitats directive is revisited. All of that is completely up in the air, and are massively complicated problems.”

Touching on Brexit’s financial impact on devolution, Cable said he is worried that some people appear to be living in “fantasy world”.

Cornwall, for instance, voted overwhelmingly to leave the European Union, despite the area receiving millions in subsidies from the continent. But as part of the area’s devolution deal the local authority was going to become a designated intermediate body for European funding.

“It is unfortunately the case that areas like Cornwall and west Wales are going to suffer fiscally,” he said.

Cable added that what would make an “enormous difference” in local government is if local authorities have much more scope for borrowing, especially if it was extended to housing.

Bur he argued: “The Treasury has deeply, deeply conservative instincts. It does not think local authorities should be trusted. They don’t like capital investment anyway, but I see some chinks of light here. Local government could have a huge role to play. If I were in local government today, I would be pushing very hard for greater freedom to borrow to invest.”

(Image: c. Danny Lawson PA Wire)

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Comments

James Cairns   14/07/2016 at 13:51

Have you been living in a cave for the last 40yrs Mr Cable? London is already a city state! The north-south divide is bigger than ever which is part of the reason many people voted out..Voters are sick to death of the Westminster bubble and London.

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