Gordon Brown: North of England must come together during Brexit

Gordon Brown calls for an all-party Commons revolt to give regions and nations more powers under Brexit.

Defective Brexit bill should be rewritten to transfer European Union powers and money direct to the nations and regions of the UK.

Highlighting regional inequalities, former prime minister argues £1.5bn of European money should be distributed directly to devolved authorities across the country

Brown proposes a UK-wide constitutional convention to give more powers of initiative to the North as well as Scotland, Wales and Northern Ireland.

For more than a year since the European referendum, commentators have made the barometer for Brexit’s economic impact the job gains and losses in the City of London. The financial pages have been full of reports and often rumours every time Goldman Sachs, JP Morgan or Citibank and others signal they may move jobs to mainland Europe or to New York.

But the redundancies announced earlier this week by Vauxhall at Ellesmere Port may be a more accurate signal of the true impact of Brexit on the British economy.

It is well known that the car industry is worried about Brexit. Nissan sought assurances from the government before they considered further investment in the UK. The car industry is responsible for 160, 000 direct manufacturing jobs in the UK, and through its supply chain there are 700,000 jobs linked to it. Most of the car industry’s output is sold to mainland Europe.  Moreover, a frictionless import-export trade in components and parts brings goods from Europe to Britain and vice versa.

The car industry’s close links with mainland Europe reflects a reality that is not often grasped: that it is British manufacturing and in particular manufacturing in the north midlands and north west that could become the biggest loser from Brexit.

New research published this year by Dutch and UK academics shows that UK’s poorer northern regions are 50 per cent to 100 per cent more dependent on European trade than London and, despite their pivotal role in Britain’s anti-European rebellion last June, will suffer disproportionate job losses after we leave the EU in 2019.

With unemployment in the north east already almost twice as high as in the south east – 5.8 per cent versus 3.3 per cent – and employment in 2015 and 2016 up only 69,000 in the north as against 429,000 in London and the south east, the historic north-south divide is on course to widen even further. Only this week an OECD report about the pitfalls of Brexit highlighted low regional productivity, the urgent need for new investment in infrastructure and skills in our regions and the case for the devolution of powers to them.

And northern anger is likely to intensify when northern families find they have no cushion against the coming loss of jobs.  Income levels in communities like Durham and the Tees Valley are already stuck at only £17,000 per head, according to recent European-wide figures, compared with £125,000 in inner and west London.

We used to think that what was good for London was good for the whole country and that, in a London-driven UK, prosperity would trickle downwards to even the poorest regions. But, as Professor Philip McCann has shown in his book The UK Regional-National Economic Problem: Geography, Globalisation and Governance, very little of London’s success spills over into the regions either in the form of business relocation, technology transfer or contracts for northern firms servicing the southern economy.

For years now, the capital has been decoupling from the rest of the UK and despite 50 years of regional policy initiatives – from selective industrial assistance to regional development agencies and regional ministers – a London-centric, Whitehall dominated constitution has found itself inadequate to the challenge of reversing Britain’s deeply-embedded structural inequalities.

This is one reason why per capita income levels in the north and midlands of England, Wales and Northern Ireland are now as low as the poorest US states – Mississippi and West Virginia – and on a par with the poorer regions of the former East Germany.

The latest Tory economic plans are unlikely to do much for the north. It is time to give far greater powers of initiative for the English regions to plan their own economic future than envisaged by the northern powerhouse. Yet just as the case for devolution from what has until recently been the most centralised state in the western world is growing in strength, an even greater concentration of power is about to accumulate in Whitehall.

Powers over VAT, migration, environmental protection, agriculture and fisheries – which are being repatriated from Brussels – will strengthen the grip of Whitehall. There are legal questions over the validity of this, given that past legislation has devolved power in many of these areas downwards.

There should be an all-party Commons revolt against the downgrading of the nations and regions in this way. While Theresa May seems to favour an even more unitary constitution, the Great Repeal Bill offers the wrong kind of Brexit for the nations and regions and should be amended on the floor of the Commons.

Belfast, Cardiff, Edinburgh and London should secure more powers and resources. The Scottish parliament alone should receive £800m of the former European budget with funding devolved to Wales and Northern Ireland too, the total funds from Europe devolved downwards should come close to £1.5bn. But if the regions of England do not benefit too then this will only inflame the very sense of grievance in the very towns and rural communities of England whose demands to “take back control” fuelled the Brexit revolt. Without the devolution of powers and resources to them, the north will feel even more left out and left behind.

The obvious answer is economic devolution all round. And there is a way forward that balances the new powers we propose for Scotland, Wales and Northern Ireland by giving the north a fresh voice: to build a council for the whole of the north – and potentially also councils for the midlands and south west and east and other regions. The council of the north would serve the 15 million people who live and work in the north west, the north east, and Yorkshire and the Humber and would be supported by the locally elected mayors

This body – detailed proposals for which have been set out by IPPR North and by Labour’s constitutional spokesman Jon Trickett – could complement the predominantly urban based and underfunded northern powerhouse and, covering £300bn of UK economic activity, have far more muscle. It could build on Transport for the North, share its boundaries and, by co-ordinating the region’s 19 constituent authorities, deliver power, resources and jobs to the north – and blaze a trail for further devolution at a later date.

Such a proto-federal transformation of our constitution can succeed only if there is a sustained popular demand for change and the economic benefits it can bring.  In Scotland in 1989, a constitutional convention of civic society and the political parties managed to debate and then deliver a workable agreement on a new constitution for Scotland. Nearly 30 years on, a UK-wide constitutional convention may offer the best starting point for a building consensus on a much needed redistribution of power.