Tuesday, May 11, 2010

Setting the regions free

Following on from my last post—in which your humble Devil advocated splitting the UK into federal "states"Wat Tyler has evidently been thinking along the same lines. He notes, as I did, the disparity in the voting trends, but also provides some figures for just how much the Greater South East (GSE) actually contributes to the rest of the UK. And please note that these figures are after that public spending on that infrastructure which is meant to give this region such an unfair advantage.
We haven't got time right now to crunch the very latest numbers, but in 2006-07, Oxford Economics estimated [PDF] that the GSE contributed nearly £40bn to the rest of the country (ie tax payments less public spending received by the GSE). Or getting on for £2000 per capita.

Here's their picture (the GSE comprises Eastern, Greater London, and South East regions, and note that in this analysis all North Sea taxes have been attributed to Scotland):

Bottom line?

If we're going to open the issue of electoral reform, we need a proper look at the entire shooting match. As well as PR, we need to look at the structure of government. A separately elected English Parliament is clearly on the agenda, but we also need to return fiscal power to local communities.

The people round our way are sick of getting outvoted by the beneficiaries of socialist fantasies elsewhere in the country. It just ain't fair.

Of course, life, as they say, isn't fair. But the trouble is (lest you think that I'm entirely motivated by spite) that it isn't only the South East that suffers—it is the enterprising people in those other regions that also suffer. As the state spends more and more on various services and pet projects, they crowd out the businesses that would have been able to generate some real growth through providing said services.

Without a strong culture of enterprise, there can be no growth. Big businesses do not, in general, create jobs—the number of people that they employ remains fairly static (although the type of people that they employ may change over time). It is small businesses that provide around 80% of new jobs in the economy.

The state hand-outs are not actually helping the rest of the UK to prosper: they are simply postponing that day of reckoning that will come when the money runs out—a day that is coming rather sooner than most people hoped.

In the end, we return to the problem that those in receipt of state largesse tend to vote for whichever party is going to increase the supply of "free" money, and that is entirely unfair. Because, as I have noted innumerable times, that money isn't free: someone had to work bloody hard for it, and then have it extorted from them under threat of violence—so that the government can hand it out to one of their favoured supplicants.

Various solutions to the problem of certain people voting themselves more of other people's money have been proposed: perhaps we should disbar anyone who is in nett receipt of state money from voting—that would wipe out anyone who lives on benefits and anyone who works for the state. It's certainly an option, but people tend to be sensitive about restricting the voting franchise.

Ideally, of course, the government simply wouldn't pay out any benefits at all, and the number of people that it would employ would be so tiny as to make no difference. But that isn't going to happen anytime soon.

So, I propose a federal system instead: a system that fits in with the Tories' localism plans, and which brings power—in the form of raising taxes—far closer to the people.

Something needs to be done.


Anonymous said...

Man, since the old Bruiser mauled you good and proper on live TV (yes, we all saw it in your eyes even though the sycophantic Blogosphere tried to protect you), you've just bailed and gone down with the bitter and twisted.

I hope you soon start to enjoy your new life as a normal human being, just like the idiot Broon.

Anonymous said...

oh, and no, i don't exploit my fellow man. i agree with them what i am prepared to pay and if they choose to exchange their labour for my remuneration they take the job.

to put it in the parlance of what i'm sure is your brand of T.V, "it's deal or no deal".


assegai mike said...

Here is my Aesop's Fables principle, no taxation without representation system.

We can still keep universal franchise by giving everybody a vote, even long-term dole scrotes. That vote is worth one point. Then, your vote is further weighted depending on how much tax you pay, let's say 1 point, or vote, per £5,000. In addition, private companies also get voting points dependant on how much corporation tax they pay. This will influence in the long term where companies decide to set up shop while disenfranchising companies who do off-shore tax avoidance shenanigans, eg Pearson Group etc.

I would also give low-earning vocational professions vote-weighting, eg front-line military, nurses, but not police, we live in police state as it is.

It's just a pipe dream of mine, will never, ever happen.

AndrewWS said...

Why split England into artificial regions when we can devolve as much power as possible to the counties, in much the same way as the Swiss do with the cantons? (Actually, they go even further and devolve powers to municipalities and communities, but that will do for the moment.) They could then decide for themselves how to spend their own money, what sort of businesses or people they want to attract to live and operate there. Simples.

OMOV (should be OPOV in these non-sexist times) is dead. OPOV, indeed, but extra votes for (say) partners in businesses, members of the armed services, payers of higher rate taxes (on the assumption that such things continue to be levied).

Bag said...

and yet when the Tories had power they didn't fix the imbalance on the boundaries, the barnett formula or the dozens of other things to make things right either.

If they had things would be different.

Devil's Kitchen said...

OK, some good points raised (here and on t'other one). I shall try to address some of them...


"Devil, I think your figures are skewed in the SE's favour due to the fact that most large plcs have head office funcions there to be close to the city, ergo thier capital gains and other tax will count for the SE, even if the majority of thier business is done in Leeds, Liverpool etc."

Then the "regions" have everything to gain through a regionalisation plan and nothing to lose. Having their own, more powerful government bases might well draw more companies out of London too.

"All hydrocarbon ( oil, gas) tax is also collected centrally."

In the diagram shown, all tax monies from Scottish oil have been assigned to Scotland (it's the only reason that its shown subsidy is so low).

assegai mike,

Nice idea, but we want to reduce the amount of prying into our personal affairs the government does.

Andrew WS,

"Why split England into artificial regions when we can devolve as much power as possible to the counties, in much the same way as the Swiss do with the cantons?"

Yes, this could be an entirely viable alternative. I tend to think that you need a certain size of administrative area for efficiency (and fiscal shock) but the county level could work.

Paul Lockett,

"Nice try, but you can't realistically claim to have allowed for decades of state enabled parasitism by the South East, just because the figures allow for the most upfront parasitism in a given year."

I would be very surprised if the headline trend was any different for the last 40 years at the very least.


"Would you recommend devolving control of the money supply to each region?"

Of course, my preferred choice would be free banking.

And, of course, the Bank of Scotland already exists (although not, of course, in the form in which it was originally founded).


JoyfulMan said...

I think you have hit the nail squarely on the head. Devolve all but the most 'national' tax raising requirements to regions of the UK. And of course they can spend according to what they raise - or not! You'd have to make it impossible for the regions to borrow beyond their means of course, or give them a separate currency, otherwise you end up with a Greek-type Euro-zone situation with the rest of the UK bailing out the profligate. In some sense, we have that anyway as it is, don't we?

The SNP only advocate independence within the EU as they envisage swapping the net benefit given to them currently by England for the same via EU bureaucracy.

I'm not rich and I'm tired of working all hours to support people who have chosen to live off the products of my toil as a lifestyle choice. I'd move to where the best tax regime exists - it may not be the cheapest, but it would have to be the best value. In order to have a chance of making a judgement on that I would need more choice of smaller 'cantons'. National systems are conceptually too large to judge.

We'd probably end up with one region declaring war on another based upon jealousy, but that is another issue. I think that fear of that may be why Con-Lab-Lib still advocate the Union anyway and it is almost certainly the only logical validation for the EU.

FlipC said...

"but people tend to be sensitive about restricting the voting franchise"

Yeah people are funny like that, can't think why.

So if we look at the 2005 results and compare the predominantly blue West Midlands and the predominantly blue East Midlands with the predominantly blue South East, the predominantly blue Eastern and the predominantly red London. The reasons that the later areas are contributors to the country and the former areas recipients is due to the domination of that areas' elected Party or it's that difference that caused the majority of those areas to be vote for the same Party?

I mean I'm all in favour of greater regionalisation, I'm just not following this part of the argument.

Anonymous said...

Scotland's troubles will start when England start their own refineries in the North of England, start Gas and Oil extraction from the North Sea ourselves. Lose numerous Naval basses, ship yards, port support and the highly skilled and well paid jobs that goes with it all. This could happen relatively quickly.

We then have to put this against whether Scotland could attract money from the South from the finance industries to counter the effects.