The CBI will today urge the Government not to rush to meet arbitrary deadlines for devolution, as it risks damaging the UK’s economic growth and undermining the internal market.
In a speech at an IPPR North event John Cridland, CBI Director-General will say that businesses believe devolution to be a real opportunity, but are concerned that the speed of reform and ‘rushed backroom deals’ could undermine the economic gains.
He will add that local bodies ought to recognise the clear quid pro quo – enhanced powers must be met by commitments to structural reform, taking tough choices on budgets and priorities in a challenging fiscal climate.
Mr Cridland will also warn of the pitfalls when playing politics with the UK’s internal market through further fiscal devolution. Harming foreign direct investment and creating unhealthy competition between regions will help no-one.
And he will spell out the business view that “devolution shouldn’t be about being different for its own sake.”
To guard against damaging ‘devo cracks’, the CBI chief will outline core criteria for ensuring more power to the regions goes hand in hand with creating economic growth and adds that
The CBI chief will also unveil three tests for “growth-friendly” devolution. On the first test, a clear assessment of the impact a new power will have, he will ask:
“What is the evidence that devolving this power will boost growth and Does it respect the four pillars of our internal market?”
Secondly, he will highlight the importance of clear leadership:
“This could be local leaders working with their neighbours though structures like combined authorities.
“Or members of devolved legislatures promoting pro-growth policies. Not always an easy task – as we’ve seen through the continued challenge of achieving consensus and collaboration around the Northern Ireland Executive table.
“Manchester itself is an obvious example where devolved powers meet these criteria.Complementing efforts towards jobs, growth and investment, We’ve seen strong leadership through Manchester’s Combined Authority.
“Putting forward a clear, evidence-based case for how specific powers could unleash Greater Manchester’s potential to drive regional growth.”
Thirdly, a clear commitment to minimise bureaucracy and complexity:
“In England, the myriad growth deals, city deals and community budgets have become a ‘tower of Babel’ for business. Making devolution clear and intelligible must be a priority for the next Government.
“And for local bodies that want to set out the economic case for enhanced powers, there’s a clear ‘quid pro quo’ here: they must commit to structural reform, taking tough choices on budgets and priorities in a challenging fiscal climate.”
