Local elections and international trade: The evolution of devolution and the role played by the UK’s regional governments

Tue 23 Apr 2024
Posted by: Phil Adnett, Jack Daisley

Across the country, voters will choose the direction of their local region next Thursday (2 May).

Increasingly, this means more to local regions than just parks, bins and potholes. International trade, economic development and high-skilled jobs are on the agenda, as power increasingly flows away from Westminster and into the hands of local leaders.

Under the policy of devolution, a new breed of politicians is rising and looking to set their own localised agenda for imports and exports.

In the first of our three part series on local and mayoral elections and international trade, the IOE&IT Daily Update considers how these power structures have changed in recent years, their impact and their future under the next government.

Westminster down to local

International trade isn’t always seen as being under the control of local councillors and mayors, which overseen day-to-day matters, like bins, recycling and parking.

While Scotland, Northern Ireland and Wales have had devolution deals since 1997, England had largely failed to follow suit, following a 2005 referendum when the North East voted to reject a dedicated assembly.

Since 2014, the government has been issuing deals to groups of local authorities, mostly in the city-regions, with Greater Manchester and the West Midlands being the first to receive additional powers.

However, a 2022 white paper, launched by then-prime minister Boris Johnson on ‘levelling up’ the UK, identified the relative lack of powers for regional leaders as an ongoing issue:

“The mayors of New York and Paris are responsible for a far broader range of functions than those in England, including welfare, schools and some aspects of health. They also have much greater revenue-raising powers.

“In the most recent comparable data, prior to the full establishment of the new metro mayors in England, only 35% of public investment was carried out by subnational levels of government in the UK, compared to almost 60% on average across the OECD.”

Local powers

In recent years, there has been a push towards directing these powers to regional mayors.

Currently, 10 English regions have ‘mayoral devolution’, mostly based in the North or Midlands, where grouped authorities receive additional powers over areas such as transport, business and skills. At least seven new deals are going into effect by 2025, including Greater Lincolnshire, the North East and the East Midlands.

Mayors like Andy Burnham, Sadiq Khan and Andy Street have had been able to shape their region’s economic growth and policy making. Initiatives like the Tees Valley freeport, the Bee transport network and more help for exporters have all been introduced by local leaders, some decisions of which would have previously been made by a Whitehall figure.

Research from the Centre for Cities found that, on average, 74% of people were able to name their directly-elected mayor, compared to only 20% who could identify their local authority leader and 43% who could identify their MP. 

Increasing progress

As individual mayors have seized the agenda, central government has responded by devolving greater powers over successive administrations.

In the 2022 whitepaper, the government promised to set out a ‘new deal’ for devolution, which included empowering English metro mayors. This expanded the original policy and gave it the now-infamous name ‘levelling-up’.

The powers that could be handed to metro mayors included skills, business support and transport. Newly formed combined authorities gained the ability to design and deliver future contracted employment programs and enter agreements to boost their transport links.


The goal of the whitepaper was to focus on the relative strengths of particular regions and form economic clusters around key industries.

For example, the North East was seen as having a great potential in its advanced manufacturing industry, while Northern Wales had potential in vaccine research and Glasgow showed promise in data and AI industries.

This feeds into a wider plan to develop regional clusters and solve the UK’s ongoing problem with economic productivity, as well as reduce regional inequality. Clusters of like-minded individuals and high-performing businesses are regarded by some economists as being the solution to these problems.

Tory ideas

Although Johnson left office only eight months after the launch of the ‘Levelling Up’ whitepaper, his policy ideas have continued to be influential in successive administrations.

Current prime minister Rishi Sunak has continued to talk of ‘levelling up the UK’, touring Wales with a promise to continue to drive regional investment and devolution.

In the 2024 Spring Budget, a grab-bag of devolutionary policies were included in chancellor Jeremy Hunt’s list of announcements.

The Greater Manchester combined authority (GMCA) and West Midlands combined authority (WMCA), run by Burnham and Street respectively, would receive the first of the UK’s ‘trailblazer’ deals, which would enact some of the proposed power shifts from the 2022 whitepaper. Southern councils, like Surrey, were also to receive greater autonomy.

Although the freeports programme looks to have reached its nadir, there were still additional details about the latest iteration of local devolution and economic growth: investment zones.

Under the policy, these zones will be able to change planning and tax law, with the aim being to “supercharge” growth. Each area will receive $80m worth of support over five years, that can be spent on investment and day-to-day management.

This included a new Tees Valley investment zone, focused on the creative and digital industries, with an additional five sites in Scotland and Wales. Sites in Liverpool and Yorkshire were announced last year.

Labour’s vision

The focus on devolved power is likely to continue regardless of which party wins the next national election.

Before the launch of its local campaign, Labour released its own vision of local government, outlining its plans for devolution.

Keir Starmer, leader of the party, said that “Labour will relight the fire of our regions and drive growth in every corner of the country”.

The document, ‘Labour’s Plan to Power up Britain’, includes a “presumption towards devolution” commitment, which would give local authorities the ability to request powers held by central government, and a general commitment to empower local bodies.

Crucially, the policy focuses on innovation clusters by retaining tax support for research and development.

Last week, Labour also promised to invest in the UK’s port infrastructure as part of their levelling up and devolution plan.

What next?

The promises of Labour and Conservative leaders, regardless of who takes power in a particular region or who enters Number 10 later this year, confirm that devolution is almost certain to remain high on the agenda.

As regional mayors and combined authorities take greater responsibility, their importance will almost certainly grow in the coming elections. Although some policies are not guaranteed by all electoral outcomes, other ideas, such as regional clusters and local decisions-making are likely to stay relevant for business and international trade.