England's regions lose out in power game

The penalty suffered by the English - because they are not Northern Irish, Scottish or Welsh - was dramatically illustrated by figures showing that England receives a disproportionately small share of millennium money.

Answering a question from Roseanna Cunningham, a Scottish Nationalist MP, the Millennium Commission revealed that out of almost pounds 1bn paid out in capital grants for prize projects, two-thirds had gone to England.

The revelation has added weight to the Government's plans to devolve power, which are under way in some regions.

England accounts for 83.5 per cent of the population of the United Kingdom. Yet it gets only 66 per cent, pounds 656m, of the money.

Northern Ireland has 2.8 per cent of the UK population, but it got 7.7 per cent of the cash; Wales has 5 per cent of the people and 10.5 per cent of the money; while Scotland has 8.7 per cent of the people and 15.8 per cent of the money.

And the English penalty is, as always, aggravated by the fact that London tends to do quite well - with 11.6 per cent of the population and 10.6 per cent of the millennium grants.

The Celtic fringe, and London, do so well because they have developed a political identity - and clout. Because they make a noise, they get the sweeteners.

It would make sense for Scotland and Wales to get more money from Whitehall; if they were significantly worse off than the English regions.

But as Richard Caborn, minister for the regions, said yesterday that most of the English regions are now running well behind European average per capita income - while Scotland and Wales have caught up with that average since they were given their own regional development authorities in 1974.

The July unemployment rate for Scotland and Wales was 6.3 per cent - but that was less than the rate for Merseyside, the North-east and London. Yorkshire and Humberside had a rate of 6.2 per cent.

The point is also made by the Treasury analysis of its own regional expenditure that while the English regions fare badly, some - such as East Anglia and the East Midlands - do worse than all the others.

The people in the most generously treated region, the North-west, get almost a fifth more money, per person than the least-favoured East Midlands.

The political and economic imperative that sees cash flowing to where the power is will ensure the eventual public endorsement of the Government plans.

Scotland votes next week, Wales the week after, and London follows with a referendum of its own for the creation of an elected strategic authority, and mayor, to take responsibility for economic regeneration, planning, transport, environmental protection, and policing.

As Michael Heseltine set up the existing framework for English devolution, the Government Regional Offices, which currently spend about pounds 4.6bn of taxpayers' money in the English regions, and as the Tories are now defending an English rural laager, they might yet find it difficult to oppose something that will be in the interests of their constituents.

But there is a resistance from Whitehall, with some ministers trying to defend their empires. Because devolution increases local power, it necessarily reduces the power of the centre and that arouses political rivalries.

Some ministers are less committed to the policy than Tony Blair, but Scotland and Wales are only the beginning of a process that will see a fundamental change in the way England, too, is governed.