Will devolution solve the UK’s economic woes?

So let's start at the very beginning.

What is devolution? What do we actually mean when we talk about devolution?

Well, we mean transferring power away from Westminster and Whitehall, where it's currently significantly hoarded, certainly as far as England is concerned.

It's worth putting all of this in the context that there was significant devolution to Scotland and Wales as far back as 1999, something similar to Northern Ireland in a different political environment.

But In England, there's been surprisingly little devolution.

The Greater London Authority, Mayor and Assembly, was created in 2000.

And subsequently, mayoral models with combined authorities have evolved in Greater Manchester, the Liverpool City region, West Midlands, West Yorkshire and other places.

But it's work in progress.

And the amount of power handed down, apart from... transport and policing, where there's been a significant devolution of power there.

But in other spheres, there's a long way to go.

And of course, many parts of England don't actually have a combined authority or a mayor yet.

So that's a second order question facing the new prime minister, assuming he becomes that.

I think that's going to be really important to come back to the geography of devolution and how this works across the country.

Before we do that, David, can you give us a handle on what kinds of powers we might think of or what different models we might think of being able to use for devolution?

Yes.

Well, of course, you know, there's a whole menu of different things that can be meant by devolution.

And one of the kind of difficulties, actually, when you kind of get into this is different people mean slightly different things.

So, again, at the most basic sort of level, if you think about devolving the responsibility for operating policies that are largely determined at the centre, and it often comes with ring-fence funding, but it's operated on the ground by councils.

You can also go further than that and think about, well, not as responsible for delivering the services, but there's some genuine autonomy over how much is spent on those services and how it's allocated between services.

So it's not all funded through ring-fenced grants, but there's sort of the option of, say, spending less on one service and more on another if you want.

And then if you like, there's also revenue devolution.

And that's what we're talking about more now.

So you could have revenue assignment, where rather than the government providing grant funding to different areas, they get to keep a share of the tax revenues raised in those areas.

So for example, if you're Greater Manchester, you get to keep a share of the income tax raised in Greater Manchester.

or perhaps even tax devolution itself, where you can actually change the tax rates.