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Localism gone global

Portland’s MD Tim Allan explores the global politics of localism

Localism is in vogue. It’s not just in the UK – where the concept is central to the Coalition’s Big Society – that it is driving public policy. The idea that Government knows best is in retreat in many places in the world.

These are, of course, still early days for Coalition in the UK. Experience shows that governments tend to begin with a genuine enthusiasm for devolving decision-making and control and tend to end by centralising it. This was certainly the case with the last Labour Government whose early years saw devolution in Wales and Scotland and ended with tough central targets for local hospitals and schools.

The change is not, despite what some critics believe, down to Acton’s corrupting influence of power. It has far more to do with the determination of governments to see their policies deliver improvements in time for the next set of elections. They often find, from bitter experience, this only happens with more, not less, central direction.

There is, however, a difference this time. The localism agenda is also driven by realpolitik. Governments across the developed world are being forced to slash back public spending to reduce borrowing and debt. Devolving power is seen as a way of forcing local communities to decide where the cuts should follow in the hope that the choices made are likely to be better but also that central government might avoid some of the blame for their impact. It’s why localism this time really might signal a major change of direction.

It is, of course, very difficult to argue against the idea that local communities know best. No one wants to risk being painted as anti-democratic or suggesting local people and communities don’t know what is best for them.

But we also have to be careful that the interests of the economy and welfare of the majority are not overlooked or that the articulate minority take precedence over the needs of the silent majority. For those of us who regularly fly to and from the UK, it is very clear, for example, that Britain’s airports are close to breaking point. But however necessary airport expansion might be for the whole country, it is hard to imagine any local community deciding that their green fields should be the site for new runways.

You can see the contrasting impact in the relative balances of these conflicting forces in the experiences of China and India, the two new economic superpowers. India is not just the world’s biggest democracy but is highly decentralised. The strength of local politicians is one of the reasons why its infrastructure has not kept pace with its growing economy.

In contrast, China is investing heavily and rapidly. The country is meeting its energy needs with some massive -and controversial- hydro-electric schemes. New airports and runways are being opened across the country. This is good news if you are a Chinese business wanting to expand. It is bad news if you are a Chinese farmer whose land is flooded or provides the site for a new airport terminal.

You don’t have to go east to see the benefits of centralised direction. You can see it right at the heart of free-market America. New York’s bridge and road system owes its existence largely to a similar approach.

Robert Moses, its architect in the 20th century, was never an elected politician. He presented himself as above the political fray, the man on the side of the people, who was just interested in getting stuff done for the good of all. He  cleverly found and protected funding for his plans from tolls and the bonds he was able to raise off the back of them.

The way he rode roughshod over local protests time and again still causes controversy in New York, but it is hard not to marvel at the sheer scale of his accomplishments. And both his fans and detractors agree that New York would look very different if Moses had been forced to gather electoral support in each district for his projects.

The danger of the localism debate is that it will be seen as primarily a local issue. It is not. How successful we are in striking the balance between local and national interests, the short and long-term, goes to the heart of the success of our economy, the quality of life and the future prospects of the country. Decisions about how much we devolve locally will have a major effect Britain’s global competitiveness.

So getting this balance right is, of course, one of the main reasons in a democracy that we pay elected politicians. Their reasons, good or bad, for stepping back need to be put under the microscope. They go to the heart of politics in this country, throwing up conflicts not just between local and national but between, for example, traditional  Shire Conservativism and enterprise-based liberalism, between the responsibilities of the Lib-Dems in government and the behaviour of their grass-roots on the ground.

Localism may be about handing power to local communities but its impact will be national and even global. It provides new opportunities but also challenges for businesses. These are some of the issues discussed in this edition of our Quarterly newsletter.