Arise, you barons of the regions and the cities

revor Phillips fair shares of the national pie

IN THIS country, since the Magna Carta locked us all into a single kingdom, the only real remaining badge of regionalism is your telephone area code. But to prevent any development of the sort of regional loyalty that led to the Wars of the Roses, the Government cunningly keeps changing the telephone codes; for example having abolished London government they divided it into two parts - 0171 and 0181.

Now, it's all change again. In two years time, London, Cardiff, Northern Ireland and several other areas get new area codes, supposedly because of spiralling demand for new phone numbers. The phone companies tell us it's our own fault for wanting to use faxes, the Internet, separate lines for our teenage children, new burglar alarms and the like. But they then spend every waking moment trying to sell us further exotic uses for fibre optic cables.

Do they think of the huge cost to phone subscribers when they make these decisions? This is not just about reprinting a few sheets of fragrant lavender notepaper. It is about telling eight million mothers, ten times each, that the number has changed. It is about the number of times you dial the wrong code and get that especially irritating voice telling you that you must dial again and you won't be charged. It is about the fact that whatever your new area code is, some estate agent will tell the newspapers that it's deeply unfashionable. And above all it is about Whitehall's determination to stop us identifying too closely with the regions in which we live.

However, there is a silver lining. Labour, though centralist by instinct, had a decentralising manifesto, to which it must, sometime, pay some attention. Even the phone companies are being brought into line. London, tragically divided between the 0171s and 0181 five years ago, will once again be reunited - ironically just about the time that the capital elects Richard Branson or somebody else Mayor of London. Perhaps the new Mayor will get to receive his first phone call of congratulations from the Prime Minister of Scotland, who will , if he is wise, be very nice indeed to his newly elected regional colleague. Other powerhouse city-regions - Cardiff in Wales, Manchester in the North-West, Birmingham in the Midlands can soon expect to elect their own regional bosses. And this will not only change local government; it will change the dynamics of national government too.

That's because, as the Balkanisation of Britain picks up pace, the barons who lead the city regions of the UK will want to rewrite the Magna Carta. In this respect, the pre-eminent baron in the land will be the Mayor of London. He or she will represent a third of the UK's economic power; the south-east has nearly a quarter of the population, and is the most dynamic region in Europe. This powerhouse provides more than pounds 6bn pounds worth of subsidy to the rest of the nation each year, according to a study by the distinguished economist Douglas McWilliams.

No less a figure that Ken Livingstone alluded, this week to the Scottish deficit with London. He wants London's new government to insist on getting its dosh back, even if it means defying national government; actually I suppose Ken would like it back especially if it meant defying a Labour Prime Minister. The argument for this reverse redistribution is that the money London gives away at the behest of national government could go a long way to solving the investment problems besetting London Transport, which has to defend a lumbering, dirty, technologically outdated underground service.

John Prescott, who happens to be in charge of transport, as well as regional policy, narrowed the options for the putative Mayor yesterday by proposing a mild version of the sort of sell-off that the previous government so loved. He is looking for private investors to buy the tracks, while the public sector (presumably the new London government) holds on to passenger services. I would be surprised to see the private sector rushing to take on the tracks without the right either to force up ticket prices or to develop the enormously valuable sites around major tube stations. But it's a start.The true test of whether this strategy works will be if it delivers a few new stations in the transport desert known as South London.

Of course, the basic point is that this sort of policy should not be coming from the mouth of the Deputy Prime Minister at all; he should not have to worry about the fate of any one region, even one as important as London. It should be the capital's own leaders who decide which parts of the transport system most need resuscitation, how it can be done, and which partners London can tolerate. The same should go for Newcastle, Leeds, Birmingham and Bristol.

But some in the political classes have serious reservations about this. The eyes of the most sophisticated political observers are turning to the success of regional parties in rich parts of Europe and North America, increasingly restive about having to bear the burden of supporting less favoured or less enterprising areas. In California, they worry about immigration, not just from the favelas of Mexico, but from trailer parks in Nevada and Arizona; in Milan, they vote for the Northern league to fend off the Sicilians as much as the North Africans; and in Munich, it is a toss-up as to whether they loathe the East Berliners more than the Turks.

In the name of democracy, our government is giving expression to these trends, which is on balance, smarter than trying to suppress them. But Westminster's politicians have to be aware that the further they go towards developing the power of regions, the more they weaken their own strategic influence and their capacity to frighten the local barons.

Saying to Scots that they must play the game Westminster's way is one thing - Edinburgh knows that without that connection they would be hard put to pay the bills for their excellent schools, maintained on a pile of southern English spondulicks. It would be hard to make the same case to a region which has an economy bigger than Switzerland's and on the success of which the rest of the country relies.

The politicians of central government are caught in a dilemma. On the one hand, they want to give more power to the people; but on the other, the last thing they need is a clutch of powerful baronies which will both wage war on each other and blame Westminster for every pothole on their patch.

So where should the balance of power lie? Sooner, rather than later, as the barons gather their forces, the Government is going to have to make clear what its new Magna Carta looks like; and I bet they can see the the writing on the wall already. It says: "All power to the regions."