Might territorial cohesion be the answer to the UK’s constitutional crisis following the Scottish referendum?

IMAG0112The last week here in UK has been dominated by the referendum on Scottish independence. Although the “No” side won by a clear margin (55/45%) the issues behind the referendum have not disappeared, and now there is a political discussion at Westminster about devolution across the UK. Meanwhile, last Wednesday I was speaking in Colwyn Bay at an ESPON on the Road  event that focused on small towns in Wales. In my presentation I drew on EU data that shows why the UK now faces a crisis of territorial cohesion.

What is ‘Territorial Cohesion’?

Territorial cohesion is one of those vague phrases that are used in EU circles. It was written into the Lisbon Treaty, adding to the previous EU aims of economic and social cohesion. In 2008 there was a Green Paper. Conceived before the economic crisis gripped the continent, it talked of ‘turning diversity into strength’, an interesting concept but scarcely a definition. In the Lisbon Treaty territorial cohesion was explicitly linked to regions with ‘geographical specificities’. These were coastal or island regions, mountainous regions, sparsely populated regions and border regions.

The fact that territorial cohesion was defined in a loose way probably helped secure political support: it could mean different things to different people! To some it was just a new way of describing regional policy as a means of redistributing resources to assist poorer parts of the EU. To planners it was a way of giving EU some responsibility for regional development, without infringing on member states’ monopoly over ‘spatial planning’.

To others it was the other face of competitiveness. EU economies had enjoyed a long period of growth, and the enlargement of the Union brought in former Soviet Block countries where GDP per capita was notably low. Rather than throwing compensatory money at these poorer places, the aim was that they should catch up by growing their economies. There was enough growth around for everywhere to be able to get some, and so grow the EU economy in aggregate. This was ‘turning diversity into strength’.

However, all these interpretations of territorial cohesion are top-down. For my part, I have always seen territorial cohesion to mean that an area defined as a unit of government is not so divided by social and economic inequalities that its citizens deem the governance of the territory to no longer be legitimate. The antithesis of cohesion is fragmentation, which can be both the cause of a lack of cohesion, or a consequence of it.

The impacts of the crisis on territorial cohesion

The EU published its Sixth Cohesion Report at the end of July. Predictably, it is about ‘jobs and growth’ – nobody in Brussels has talked about anything else for the last five years. However, whistling the jobs and growth tune can no longer hide the damage done by the financial crisis and the austerity policies enforced in the Eurozone and in the UK.

One in four EU citizens now lives in a region where GDP per capita is below 75% of the EU average. Youth unemployment stalks all member states.  In the official language these are ‘challenges’ for national, regional and local governments: for those at the sharp end they are likely to be life-defining disasters.

‘Between 2008 and 2012, the number of people in  the EU at risk of poverty or social exclusion increased  by 6.5 million to almost a quarter (24.8%) of the population. Those most affected are people of working age because of the significant increase in unemployment and the downward pressure on earnings in a context of persistent job shortages’ (Cohesion Report p77).

Territorial cohesion within the UK

Inner London is top of the EU league in terms of GDP per capita. In 2011 it stood at 321% of the EU average. In contrast, in 2011 five UK regions had less than 75% of the EU28 GDP per head (and remember this average is depressed by all the poorer countries that joined after 2004, and by Greece and Portugal).

The five are Cornwall and the Isles of Scilly, West Wales and the Valleys, Tees Valley and Durham, Lincolnshire and South Yorkshire. GDP per capita in Inner London is five times that in Cornwall. On this measure the UK has the widest regional disparities of any member state in the EU.

In 2011 Shropshire and Staffordshire, Lancashire, Northern Ireland, East Yorkshire and North Lincolnshire, Merseyside and the Highlands and Islands of Scotland all had between 77% and 80% of average EU GDP/capita.

Even more revealing is the pattern of change since 2003. Cornwall and the Isles of Scilly, for example were at 80% of the EU average in 2003: by 2011 it was 64%. Lancashire fell from 96% to 78%. Northumberland and Tyne and Wear from 94% to 83%. Across Europe, 18 regions lost more than 20 points of regional GDP between 2003 and 2011: 11 of them are in the UK.

What we see behind this pattern is the spatial logic and consequence of UK’s  (consciously or otherwise) spatially-blind policy. Remember that the investment made by the UK government to save the banks that caused the crisis was £1.162 trillion (Guardian, 12 September 2011). Spatially, where did that mind-blowing level of investment go? It went to the places where the banking and financial sectors are most concentrated. These are Inner London and, to a lesser extent, Edinburgh.

Not much of that investment will have reached Cornwall, West Wales or the other regions mentioned above. However, to replenish the public coffers after this extraordinary “binge”, money has been taken out of those regional economies through taxation and through cuts in public investment.

Perhaps as some of those discussing constitutional change for the UK in Westminster and its lobbies, might venture into these regions, or might listen to the voices of the 45% of Scottish voters who want out of the UK. They might even start to think about ‘territorial cohesion’.