Andy Burnham's proposal for devolution is being hailed as a crucial step towards achieving higher economic growth across the UK, but experts are cautioning that the impact of such policies may be more nuanced than the Labour Party leader suggests. In his first major policy address, Burnham pledged to shift power away from Whitehall and empower every postcode in the country to contribute meaningfully to economic growth.
However, an examination by economists into the effects of devolution over the past 25 years paints a more complicated picture. While devolution has led to significant improvements in certain areas such as healthcare and education, there is no clear evidence to suggest that these nations have seen a marked improvement in their relative economic standing. Official statistics reveal that the GDP per capita in Scotland, Northern Ireland, and Wales remains broadly consistent relative to the UK average, with Scotland at approximately 93%, Northern Ireland at 83%, and Wales at 74%.
Analysts argue that, despite the lack of clear growth acceleration, devolution cannot be labelled an economic failure. In the absence of devolved governance, these nations might have experienced a relative economic decline compared to the rest of the UK. Brexit has also had a disproportionate impact on certain regions, making it challenging to isolate the precise impact of devolution on economic performance.
For households and businesses, the implications of further devolution are complex. While increased local control over public services and infrastructure could lead to more tailored spending, the historical data does not guarantee a direct uplift in personal incomes or business profitability. The broader economic impact of such a rebalancing would be long-term and indirect, affecting overall national growth rather than immediate financial conditions.
With the UK economy still grappling with the aftermath of Brexit, Burnham's devolution plan is being watched closely for its potential to boost regional growth and close the gap between different parts of the country. While his proposal has been met with enthusiasm from some quarters, others are questioning whether it goes far enough in addressing the underlying structural issues that have hindered economic development in certain regions.