Cashing in on the great divide

And there is no better split in a government than between a Prime Minister and a Deputy Prime Minister. Now, suddenly, the issue of regional government is sharply in focus. But it is not merely an issue of whether or not the North-East gets its own directly-elected parliament. It goes way beyond that to the other great political debate of the moment: race. For this is all about Britain and what it means to be British.

Yesterday, John Prescott was vigorously slapped down by Tony Blair for suggesting the reform of an arcane formula which decides how much government money is spent in the regions of Britain. Should Scotland, Wales and Northern Ireland get more than parts of England even though some parts of England like the North-East have worse economic and social problems than they do?

This in turn echoes the debate Foreign Secretary Robin Cook started last week in his "chicken tikka masala" speech about the meaning of being British. Do the British people believe their problems can best be solved on a national level, or should they fragment into countries, regions or even towns in their bid to improve their lot?

Mr Prescott's people had been quietly flying his kite about reform of the Barnett formula for a few days. It started at a low level over the weekend, gained height on The Northern Echo's front page on Monday and reached its peak yesterday as the Guardian's main story. Then Mr Blair, armed by Chancellor Gordon Brown, shot it down in flames - although all the parties tried to make it look like a dignified assassination.

Mr Blair had to act. Mr Prescott's suggestion that Scotland should lose its special status had enraged people north of the border.

Until Mr Prescott's intervention, the Scots had, by and large, been quite happily ignoring the forthcoming General Election which will choose a new government for Great Britain. Thanks to Labour, the Scots have their own parliament which is doing a presentable job tackling important issues like education. Why should they bother discussing a General Election for a distant parliament in London?

But now the Scottish Nationalists have been handed a new weapon. It is clear that the Scottish Parliament is no more than a sop to keep the Scottish people happy. London still controls the purse-strings and, on Mr Prescott's whim, London can stem the flow of money to Scotland. Independence, shout the revived Nationalists, is the only answer.

This is dangerous for Mr Blair - as Mr Prescott accepted in his comments in yesterday's Guardian. After the election, there will be 58 Scottish MPs at Westminster. If most are Labour MPs, Mr Blair can expect an overwhelming majority; if the Nationalists make serious in-roads his majority might be less than 100 - which would represent a moral victory for William Hague.

So Mr Blair had to shoot down Mr Prescott's kite. But in doing so, he reminds the English that there will be 58 Scottish MPs voting on English affairs when English MPs cannot vote on Scottish affairs because they are not members of the Scottish Parliament - the "West Lothian" question.

Mr Blair has tried to devalue the "West Lothian" question by reducing the number of Scottish MPs from 72 to 58 but, as the Conservatives keep saying, it is still unfair and undemocratic.

Yesterday, Mr Prescott presented a possible solution to the question: immediately after the General Election there should be referendums in English regions to see if they want their own regional parliaments to counterbalance the Scots. He may even have given a nod and a wink to his old adversary, the Hartlepool MP Peter Mandelson, who recently came up with very detailed plans of how the North-East's assembly should look.

Yet this is at odds with Mr Blair's approach. Whereas the idea of regional debating chambers might appeal to the sort of people who read the Guardian, Mr Blair knows that if the English people are asked if they want another layer of expensive politicians the answer will be 'no' - even in the North-East. It is most certainly not a burning issue on the campaign doorstep. No one in Sedgefield will collar Mr Blair and demand that he gives them more meddlesome politicos.

So rather than the full frontal approach of Mr Prescott, Mr Blair is opting for stealth - and quite probably hopes that the messy issue will go away altogether. As he told The Northern Echo last week, he is keen on decentralisation, whereby Westminster gives more of its powers to the Government Office North-East and to the regional development authorities.

He also said it is the people of the North-East who have to come to the Government and demand a referendum - and not, as Mr Prescott would like, for the Government to impose a referendum upon them. And if that referendum returned a yes, Mr Blair says there would then have to be reform of the current local government structure. It would be patently absurd if people in Durham had parish councillors, district councillors, county councillors, regional MPs, Westminster MPs and European MPs all representing them.

But those reforms are already happening. They have been most visible in the debate about local councils being ruled by new-style cabinets. Much of that debate has concerned the openness of the cabinets, but while councils have scrabbled to get the new structures working all have overlooked the possibility of being ruled by directly-elected mayors.

Except tiny Berwick on the Scottish border. On June 7, it will become the first town in England to hold a referendum on whether it should get its own equivalent of Ken Livingstone - a powerful mayor who, if he fails to improve services, will be voted out and replaced by someone else, possibly from his own party.

Mr Blair is known to like the idea of directly-elected mayors. He hopes that by introducing personalities who get things done into the dry, grey world of local councils, it will spark greater voter interest. It might also prevent the spread of regional government. Regional government is all about getting power closer to local people, but if there are powerful mayors in Darlington, Middlesbrough, Barnard Castle, Durham City, Newcastle, would there be a need for a North-East government? In fact, directly-elected mayors might ease the fears of those who worry that a North-East parliament would be too distant from them - it is bound to be based in Newcastle and it is bound to revolve around the region's biggest population on Tyneside, so where would that leave south Durham and Cleveland?

Although it is perfectly possible to have elected mayors and a regional government, people's preference will be partly dictated by what being British means to them. Does being British mean looking to your region first and that region then rubbing alongside other regions in a federal Britain. This is the current view of the Scots, the Welsh and the Northern Irish. But what about England? Do the people of North-East or South-West England look for leaders in their region addressing their problems because they see the hubbub of London as a foreign land with foreign problems?

Or do they look to their town first, for Darlington to address education problems in Darlington? Or should those problems be left entirely, as the Conservatives advocate, to each individual school?

The split between the Prime Minister and the Deputy Prime Minister over the arcane issue of a funding formula could be easily addressed - a new deprivation formula to increase funding in the worst areas of England would leave Scotland's riches untouched. But it is a split that forces us to ask which bit of England we owe the most allegiance to because it is that bit which has the best chance of easing our problems.