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Lord Giddens: My Lords, I congratulate the noble Lord, Lord Kirkwood, on his maiden speech, which was delivered with great verve and humour. I was very pleased that he eventually got round to the topic of the debate. The noble Lord will bring a lot to this House because of his expertise in social policy, education and social welfare and his work with the Rowntree Reform Trust, which he now chairs. I am sorry that we do not have a personal relationship, therefore I cannot speak in any depth from my knowledge of him. But from his speech it is obvious that he is going to be an extremely worthwhile Member of your Lordships' House. I am very happy to welcome him here today and we are very pleased that, agreeing with Woody Allen, he decided to show up.

I thank the noble Lord, Lord Phillips of Sudbury, for initiating the debate. A good philosophical principle for understanding something is to begin by looking at its opposite. If we want to understand why such an intensive debate about devolution, decentralisation, local autonomy and local democracy is going on around the world, we should start, not from the local village post office, but at the opposite end of the scale, from the impact of globalisation on societies. Globalisation is the pre-eminent fact of our times. It is the defining feature of our epoch. It is much discussed, but it is not always well understand. Globalisation is not simply a single force; it does not move simply in a single direction.

If I were asked to picture what globalisation is doing to our societies, I would say that you have to see it as a threefold set of influences. Some powers are pulled away from the nation into the global market place; we know that. That is the prime reason for the demise of Keynesian national economic management from about the 1970s onwards. If globalisation pulls away, it also pushes down. It creates new demands for local autonomy, new possibilities for local power and new forms of local cultural identity for which people strive.

The push-down effect of globalisation is, of course, not always, benign. Most of the serious conflicts going on in the world today are either within nations or across nations, rather than between nations. At the core of globalisation is a new demand for local autonomy and local power.

If globalisation pulls away and pushes down, it also squeezes sideways. It creates new demands for regional identity and regional power. It creates new forms of region in world society. We need only consider, for
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example, the importance of Catalonia in the north of Spain to see how important regions are in the new global economy.

Globalisation also changes even the smallest of localities. Your local post office looks the same, probably, as it did 20 or so years ago. You probably still pass the same kind of forms across the counter, but your local post office is actually at the centre of a global electronic network. Nearly everything that happens once the form is passed across is integrated into an electronic system. So, the local post office is, in many respects, different from what it was a few years before. The functions of the post office have been undercut by electronic mail. Electronic mail is also part of a truly global system of communication that directly affects our own lives, personal identities and localities. Your local village store might look the same as it was, but now it almost certainly has products in it from all round the world. It is probably in competition with the giant supermarket that has been built up the road.

What applies to localities also applies to cities. I was pleased to hear a remark about the "global city". London has become a global city. What does that mean? It means that London is no longer simply part of the UK. London is in the UK, but it points outwards into the global economy. There is no clearer example of that than the role of the City. It is so important for generating jobs in our society, but it is part of a global financial system. It is not only London that has become a global city; today, all cities, in some sense, are global cities. They are no longer simply part of their hinterland, as it were; they are integrated into a wider system. We have to understand that, when we develop local politics and seek the economic resurgence of an area.

I disagree with the noble Baroness, Lady Seccombe—I am sorry, I have lost the thread of what I was going to say.

Lord Desai: She has that effect on people.

Lord Giddens: I disagreed with her because, today, regional identity is becoming especially important. Therefore, an agenda for the regions is crucial.

The Government have recognised since their inception the importance of reacting to globalisation and its complex nature. They have recognised that it presumes devolution. That is why there has been devolution of power to the nations, the introduction of a regional agenda and attempts at devolution in the National Health Service. Empowering local authorities, while making sure that they modernise first, is a crucial part of the Government's agenda.

Against that background, I shall make four brief comments about regional devolution and identity. First, in the world that I have just sketched—and momentarily forgot about—regional identity and regional power become inescapable. You cannot have strong local power and strong local democracy, unless you also have strong regional identity and regional democratic accountability.
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After the failure of the referendum in the north-east in November 2004, Bernard Jenkin MP gave a speech in which he, rather like the noble Baroness, rejoiced that the regional agenda was, as he put it, dead and that it had been blown out of the water. I think that it creates deep structural problems for our society. You must have an effective regional identity and an effective regional agenda. If you do not have democracy at regional level, you essentially have unaccountable regional power. I have to say that the Government are partly responsible for the situation. It is no good setting up regional assemblies and devolving to regions if you do not give them real power. It was the fact that we had such a half-hearted version of devolution, rather than concern about the addition of another level of bureaucracy, that was the prime reason why voters in that area voted it down. It was a retrograde step for the country.

Secondly, the idea that one can directly transfer power from the centre to the locality, which seems to be the leitmotiv of resurgent Conservative philosophy, is almost wholly phoney. You cannot transfer power from the centre to the locality because of the nature of the changes that I described. We live in a society in which you must have what political scientists call—I hope that your Lordships will forgive me—"multi-layered governance". Multi-layered governance is an inseparable part of a society struggling to come to terms with globalisation. That means, for example, that, if you want local resurgence, you must get communities to help themselves. Of course, you will want to transform local government to make it more efficient and accountable, and you will want to work with voluntary associations in the area. However, often, that will not be enough. You need forms of partnership between the centre and the localities, and you often need a regional stratum to collaborate with too. For example, if you want to do something about poor neighbourhoods or deprived areas, you will need central government intervention to provide leverage. Often, if you simply transfer power to a locality, you entrench the power of local élites. You might entrench local stasis and entrench precisely the things that you need the centre to help you get rid of.

Thirdly, as the regional agenda seems to have ground to a halt, cities will become particularly important. Cities are likely to step into the gap, and that will adversely affect rural areas. We must endorse the agenda for the election of city mayors. In this country, it has been a rather fraught affair, but we now have some systematic research—rather than just assertion—from the New Local Government Network, produced in 2004. It shows some interesting results. For example, mayors are, on average, known to 57 per cent of local people, a proportion that rises to 73 per cent in the north-east. That is far more than know traditional council leaders. In the expansion of local democracy, that must be a key plank.

I agree that some of the leaders have proved controversial. This morning, I looked at the website for Ray Mallon of Middlesbrough. It was very interesting. His was a controversial election, but he is doing interesting things. For example, he says on his website
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that he does not agree that the idea that resolving problems of crime and anti-social behaviour is best done by putting more police on the streets. He says that you want flexibility, rather than simply more police on the streets. That is interesting.

Fourthly, you cannot have effective local democracy or local empowerment unless resources are provided. An interesting study of elections across Europe in relation to the economic resources of local communities and municipalities shows that the more economic power a local community has bears a direct correlation to the level of voting in elections. Finland allows the most local economic power and allocates the most resources to local authorities, and it has a very high turnout. It is very interesting that there is an almost complete correlation across Europe.

In conclusion, that suggests that the Government must bite the bullet and consider transferring further economic power to localities. You cannot have devolution unless you devolve real responsibility.

1.40 pm

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