Let the citizens decide

By Ross Mudie | 20 November 2023

It’s official, the British economy is broken. The public seem to think so. YouGov’s weekly tracker on the economy suggests public confidence in the economy has been lost, with around three-quarters of the public believing the Government is handling the economy badly.

Public attitudes towards the future are equally pessimistic. The Local Economy Tracker published this week by the Centre for Progressive Policy (CPP), where I work, suggests 77% of people are pessimistic their local economy can meet the needs of young people, with pessimism about economic opportunities for young people remaining consistent across the entirety of the UK.

It is unfortunate, yet unsurprising, that British public attitudes remain so downbeat when it comes to the economy. The cost of living crisis and wider global instability gave fair precedent to the Collin’s Dictionary selecting ‘permacrisis’ as its word of the year in 2022, and little has improved since.

Our Local Economy Tracker shows as much – the public are just as pessimistic about the future of their local economies today, as they were last year.

As the chancellor alluded to ahead of this week’s Autumn Statement, there will continue to be turbulence in the British economy over the coming years.

History suggests economic pessimism often feeds into a broader loss of confidence in democratic institutions themselves. If the low turnouts seen in recent by-elections (even for by-election standards) are repeated nationally, then the post-mortem analysis will reveal a lack of confidence in government’s ability to confront our economic challenges as one of the factors.

Much academic research has suggested tough economic conditions often translate into lower voter turnout, and our tracker suggests there is widespread pessimism over both main parties’ capacity to improve people’s local economies. It is not hard to imagine how the feeling of loss over one’s stake in the economy can influence the decision to stay at home on election day. All of this makes for pessimistic reading. But there are some reasons to be optimistic.

Two recent research reports using deep participatory engagement with the public on economic policy reveal some surprising findings.

King’s College London’s Citizens’ Economic Council on the cost of living explored the trade-offs and policy options on taxation, spending and investment. So did the Citizens’ Jury, which formed part of CPP’s recent report Funding Fair Growth, which I worked on.

Both projects suggest the public, when provided with a balance of information and space to engage with one another, are more than capable of grappling with the specifics, nuances and trade-offs policy-makers are often faced with – and generally, enjoy taking part.

To demonstrate, let’s take a topic many readers of The MJ are familiar with – fiscal devolution – which formed a major component of our Citizens’ Jury.

Following an initial ‘learning session’ to bring participants up to speed with fiscal devolution and the various pros, cons, risks, and trade-offs associated with it, we used a role-playing exercise based on a fictitious scenario to see whether, in principle, a consensus on greater fiscal devolution existed.

Jurors were asked to act as advisers to the chancellor, reviewing and debating hypothetical evidence for granting enhanced fiscal powers to three fictional local governments across diverse geographies, with a view to a nationwide rollout.

The vast majority (84%) determined that, considering the evidence they had reviewed, the chancellor should go ahead with a full nationwide rollout.

Following this, we undertook further deliberation to develop a set of principles the jury believed would form a sound starting premise to develop a model for fiscal devolution that took account of their concerns, primarily around geographic inequalities.

The jury concluded with five principles they believed were central to ensuring fiscal devolution can contribute towards better economic outcomes. We then took their principles as our starting premise to develop the recommendations on fiscal devolution, that featured in our report.

Our flagship recommendation; to devolve 2% of income tax to local government in England, allowing areas to retain half, with the other half ringfenced for redistribution and rebuilding local government capacity, resolutely reflects the principles of the jury.

At their core, these projects show two things: first, deep public engagement on economic policy gives people a greater stake in the economy, and people are receptive to this. In our project, all but two of the 35 participants who completed the post-jury survey responded that they enjoyed it – with 26 stating they enjoyed it ‘a lot’.

Second, the public are demonstrably capable of navigating difficult policy choices, given space and time. At a time of continued economic turbulence and low morale, this is surely a lesson for policy-makers and politicians alike.

Ross Mudie is research analyst at the Centre for Progressive Policy

X – @CentreProPolicy

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Local economies Fiscal devolution Cost of living