Tuesday, 9 February 2010

The route to entrepreneurship

BOM comments with usual intelligence on a presentation to Policy Exchange by Paul Romer on the idea of Charter Cities, and suggests we might explore the option for our terminally ill Northern metropolitan relicts.

It was Heseltine who tried to prove the worth of the Urban Development Corporation during the last Conservative government; an area independent of normal local government planning controls. The success rate was mixed, primarily because the freedoms simply didn't go far enough. For an example of real success, we need to go much further back in history.

The rise of the Charter Borough during the twelfth and thirteenth centuries in England created unprecedented wealth and paved the way for the establishment of a new English middle class under the Tudors. Typically, a group of merchants would petition the crown for Charter status; that in return for a direct annual payment to the crown, they would be free of feudal lordship and dues. They had rights to be tried in their own courts, to levy charges and taxes within their burghs, to govern themselves and to trade freely. The guilds and the burgesses, not the knights and their overlords, ruled.

Today, the key features of a Charter Borough would be freedom from regulatory laws. Most Criminal and Civil law could continue unchanged, but tax and duty laws, minimum wage laws, employment laws, planning and licensing laws and all the panoply of State regulation would be suspended in favour of a Civic Code devised by the Burgesses themselves with the democratic consent of the people. The Charter Borough would agree to an annual payment to central government and that would be it. Levying taxes and funding administative costs, including the Borough's own police and tax officers, would be up to the individual boroughs.

But, as BOM points out, most of our regulatory law now comes not from Westminster but from Brussels, and we're not trusted or allowed to make our own decisions on such things any more.

Such radical measures are not fantasy; given boldness, and ridding ourselves of the Leviathan of the EU, we could create unprecendented wealth and competitiveness in areas that now offer only a stunted and desperate life on Welfare and an early death to many of our fellow citizens.


Anonymous said...

I certainly would agree that radical localism is the path not only to prosperity but to the re-democratisation of British political life and the re-enfranchisement of the British electorate as well.

However I do not think that any party - and very few individual politicians - have any interest either in radicalism or in localism.

Fundamentally, the Tories are stuck in a 1997 mindset and still believe that being more NuLab than NuLab is the solution to everything - and that commitment to being a slightly bluer shade of red extends to their belief in centralisation, their disregard for the institutions of this country and their total lack of either an ideological or a moral centre. What's true for the Tories is truer still of the LibDems.

Who, then, can deliver the localism of which you speak? At the moment, no-one. At the moment, the only choice we have is between incredibly incompetent leftist rule (Labour), very incompetent leftist rule (LibDems) and pretty incompetent leftist rule (Tories). We're back in the dark days of 1970s "consensus" politics, comrades, and David Cameron is Ted Heath all over again (though perhaps sans the latter's interest in well-oiled and undressed young men).

hatfield girl said...

Other EU member-states can do subsidiarity. It's because of the regime we have that all power and money is concentrated in the hands of the junta. It's not the EU, it's us unfortunately.

William Gruff said...

Charter boroughs? They sound perfect, don't they? Are there no drawbacks? What if the 'democratic consent' were for a high tax, high spending, centralising authority? Would they be a good idea then?

Anonymous said...


Typically, you haven't thought through what you're saying. If a local authority were "centralising", it could, of necessity, only centralise on an extremely limited local scale. A centralising agenda by the Ipswich Borough Council is a different order of magnitude from centralisation by the Westminster Government. If you cannot see that, there is even less hope for you than I had thought.

And, to answer your second question, yes, as far as it goes, it is an excellent idea to allow people to choose how their local area is to be run. If the people of a particular locale decide that they want to pay higher taxes and vote for it accordingly, it is their business and a priori a Good Thing. There may be specific situations in which people decide higher taxation, to pay for some specific end, is a desirable thing. Accordingly, they may prefer to vote for an administration that favours lower taxation.

We call this concept "democracy".

William Gruff said...

LMFAO Anonymous.

I'd guess that you are an O level pupil of politics who has been encouraged to show off in front of Mummy's and Daddy's friends?

Nice try.

William Gruff said...

PS: A nice pass with a priori there, but be wary of using that move too often.

Raedwald said...

William - I doubt many would last long with a high tax regime; why wouldn't residents simply move to a nearby low-tax location?

Similarly, any borough offering above-the-odds Welfare provision would soon be swamped with incomers.

No, I reckon the structure mitigates towards low-tax economic efficiency.