Four questions on English devolution from manufacturers

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Devolution, it has been argued, is a process and not an event. Despite this, the process needs a bit more clarity. Below are four questions from manufacturers that need to be answered.

Why?

What's the logic for more devolution? There is genuinely a lack of understanding amongst businesses about why devolution is necessary. The main argument put forward, that the size of the economy in some English regions is larger than that of say Wales or Scotland, simply doesn't cut it.

Political parties need to set out a clearer logic of why English devolution has become such an urgent issue.

What's going on?

Business confidence is a fragile thing and questions such as 'what's going on?' being perennially asked could serve to undermine it.

47% of manufacturing business investment in the UK is accounted for by foreign owned companies, an uncertain business environment in the future could serve to have that investment being made in another country.

We need a plan on the table setting out the process for English devolution, what questions will be tackled when? Who will be involved in the debate? When will a decision be made?

Will devolution lead to significantly divergent business environments?

Again long term investment decisions will be undermined if different areas have different tax and regulatory regimes. This would be a particular challenge for multi-site operators who until now have enjoyed a stable and somewhat uniform business environment in England.

At the very least politicians should rule out the devolution of tax setting powers to English regions.

How will 'initiativitis' be managed?

There is a significant risk that devolution will lead to the duplication of effort in a range of policy areas as previously experienced under Regional Development Agencies.

We've argued before and continue to argue that innovation and apprenticeship spending and administration should remain at the national level. The size of the funding pot for nationally led schemes should not serve as a de facto reason for it to be chunked up and devolved to local areas.
The guiding principle for devolution should be growth not the displacement of activity. Some of the options currently on the table would worryingly lead to more of the latter taking place.
I’ll be blogging again on Thursday about what some of the solutions, from a manufacturing perspective, should be.

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