April 15, 2014
by Professor Tony Travers, Director of LSE London, a research centre at the London School of Economics, and Visiting Professor in the LSE’s Government Department.///
This article is based on a speech delivered at an event organised by the European Movement’s Local Government Section
There will be both local and European elections on 22nd May. Intriguingly, the BBC has recently commissioned IPSOS Mori to undertake polling which suggests that, compared with 10 years ago, the British are becoming less connected to ‘your country’ but more connected to ‘your neighbourhood’ and to ‘the global community’.
Against such a backdrop, this year’s local elections are a particularly good pairing, though, it is worth noting that the turnout will probably be under 35 per cent, compared with around 60 per cent for a general election. National government in Britain is still very powerful.
The European Commission, which has long had a keen interest in ‘regional’ issues is now becoming involved in city policy. I took part recently in an event in Brussels where larger towns and cities from across the EU explored the kind of things that the Commission might do to help them. There is clearly a continuing EU and European Commission interest in local economies. Cities and city regions, as in the UK, are now becoming more important.
In fact, EU institutions are of significant importance to local government, LEPs and local economies more generally. In considering the local and national economic outlook, it is important to bear in mind the many ways in which ‘Europe’ is involved.
People may or may not welcome it, but the EU’s regulatory and legislative regimes affect every part of the UK and every local economy.
Thus, for example, rules about energy efficiency and consumption will affect civic buildings, social housing and public transport. Targets for the delivery of renewable energy create planning struggles throughout the country.
The internal market procurement rules affect the way councils and other local public providers offer contracts. State aid rules similarly reduce the opportunities for unfair competition between areas, but in doing so limit local discretion.
Directives on working hours and health & safety affect local government and other local economic actors. Such interventions often improve people’s lives, but can be seen by some commentators as anti-enterprise.
European consumer policy has often been popular (for example, in relation to mobile phone charges and airline competition), but may add to the burdens faced by trading standards officers. Common EU retail and service standards can have similar effects, both positive and negative.
But probably the most visible and politically-charged interventions from Brussels relate to ‘cohesion’ and other regional funding and, spectacularly, in relation to the free movement of people and labour enshrined in underlying EU treaties.
There can be no doubt that all the above policies, regulations and legislation will affect the functioning of local economies. Councils and Local Enterprise Partnerships (LEPs) will have to take account of the full range of European actions. It is perceptions of some of these actions which have stimulated much of the opposition to ‘Europe’.
There is now a Wikipedia page about ‘Euromyths’ such as ‘Europe banning curved bananas’ or Brussels creating ‘metric martyrs’. Misleading though some of these stories may be, they doubtless signal wider disquiet about the State’s (that is, not just Europe’s) willingness to become over-involved in our lives.
Local government finds itself facing EU and UK government enforcement costs at a time of continuing austerity. Brussels and Westminster both need to be aware of the major reductions which are being made to local government’s funding in England and Wales.
The EU and the Commission must be sure they consult local government, LEPs and other sub-national players about the impact of any new legislation and regulation. Relying on central government to feed messages through will not always work: in fairness, it is not DCLG’s job to do so.
Many European interventions are important and can be for the wider good. Clean air, for example, as last week’s Saharan smog showed, is an international matter. And while no EU interventions could have stopped the natural phenomenon which saw a Saharan sand cloud drift over eastern Britain, there are many other pollution issues which require European-wide action.
Looking ahead, local areas, represented by councils, city regions and LEPs will need to continue to strengthen their involvement with Europe, both inside and outside the EU. There will be very few new public sector jobs in the coming years. Virtually all new employment will have to come from the private sector.
Inward investment will be very important and a major part of such money is likely to come from Europe. Of course, the United States, China, Japan, India and others will also be important. But the UK remains a major trading partner with Germany, France, Ireland and other EU countries. Opening up areas beyond London and the South East to international investment is one that local partners can work together to achieve.
Skills, foreign languages, transport (particularly air links) and a responsive planning system will all help. Britain has a good reputation for reasonably low taxes and its legal system. Local effort to strengthen Britain as a European base for overseas companies will surely pay off.
Finally, it is important in looking at the economic future to be realistic about local government’s financial position. Austerity will last until at least 2020: it will take that long to get rid of the UK’s budget deficit. Councils have shed over 500,000 jobs since 2010. At the same time, central government services have shed none.
This pattern is fixed. Local government will almost certainly continue to face budgetary pressure for at least another six years. Therefore, the key to reducing unemployment (particularly among the young) and to ‘rebalancing’ the economy will be by local and city regional government embracing the private sector.
The EU may help this process, though uncertainty about the future of the UK within the EU may cause challenges. There is the risk that an ‘In-Out’ European referendum in 2017 would result in the UK leaving the EU. In the past, most polling has suggested that when there is a risk that a vote would lead to a British exit, the ‘pro-Europe’ vote increases. But no one could be sure that an ‘In-Out’ referendum would absolutely and definitely lead to the UK staying in. Any suggestion that Britain might leave would create uncertainty which might affect inward investment and other kinds of confidence.
Whatever happens, Britain will need to strengthen its trading and investment links with our European allies. Local government and LEPs will be very much a key part in this story.
Author : European Movement UK