Labour plans to shake up UK by extending devolution

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A Labour party review of the constitution by former prime minister Gordon Brown is set to recommend banning second jobs for MPs, beefing up the Electoral Commission and extending further devolution to both the English regions and the parliaments in Scotland, Wales and Northern Ireland.

Keir Starmer, leader of the opposition Labour party, who commissioned Brown to carry out the review, has already endorsed one of its recommendations to overhaul the House of Lords ahead of its publication in early December.

Starmer is expected to accept other proposals in the review, designed to provide a framework for how Labour would pursue devolution if it wins the next general election, which is expected in 2024.

Rachel Reeves, shadow chancellor, will say in a speech on Wednesday that a Labour government would give “more local powers in England over the economy”.

Addressing the Great Northern Conference in Manchester, she will say that Labour would reform what is currently “one of the most centralised states in Europe” in order to create a “prospectus for real levelling-up” of Britain.

The final contents of the Brown report have been the subject of horse-trading throughout the summer, with the publication delayed by several months.

The report is expected to steer clear of sweeping fiscal devolution, which would give greater tax-raising powers to cities and regions beyond London. However, it will recommend a review of Scotland’s borrowing powers with UK inflation at a 41-year high.

It will also raise the possibility for English local leaders to get the power to levy “hotel taxes”, which could be slapped on hotel visitors to raise funding for their area.

Those familiar with the contents of the review said it will recommend giving regional mayors more powers over local education and training budgets while extending their remit on infrastructure, planning and transport.

Starmer is also expected to accept a recommendation to give local leaders power over job centres, which is part of a broader devolution of skills policy.

Although the review is not expected to outline further tax-raising measures for towns and cities, one senior Labour figure said further English fiscal devolution remained the “end goal”. 

The paper is expected to float the offer of “universal basic infrastructure” — a per capita funding formula to ensure that crucial local assets, from football clubs to historic landmarks like mills, were protected.

Brown will also recommend giving local authorities more control over their budgets in order to take a less short-term approach to economic planning.

One person familiar with the document said: “It will be radical in its breadth rather than its depth, this is about first steps on a longer journey.”

Reeves will argue that the devolution of economic powers are a “critical ingredient” in growing the industries of the future across the north.

Some shadow ministers have been concerned that the report could recommend deeper autonomy for Scotland, provoking a backlash from certain English regions.

However, the report will say that Scotland already has considerable tax-raising powers and will propose cutting procedural barriers to their use, while recommending a review into a limited extension to Holyrood’s abilities to borrow money.

Starmer has already accepted Brown’s idea to scrap the House of Lords and replace it with a new elected body with greater representation from across the regions of the UK. Labour mayors including Andy Burnham have been among those consulted for the report.

Other ideas in the report include a ban on second jobs for MPs, a new “integrity and ethics commission”, through which a lay jury could rule on complaints against politicians.

It also proposes giving the Electoral Commission new investigative powers and the ability to hand out bigger fines.

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