1. Governance
September 14, 2016

Want to move Parliament out of London? It should go to the highest bidder

By Andrew Carter

Last week’s warning by a select committee that the Palace of Westminster should be vacated for urgent repair-work has raised the possibility of Parliament moving out of London altogether – with MPscommentators and activists all making the case for other places to be the new home of UK democracy.

Ultimately, it’s probably unlikely that MPs will move out of the House of Commons, never mind Parliament moving out of the capital altogether. But let’s imagine that the decision was taken to rehouse the seat of democracy. Two related questions would need to be addressed: where should it go, and what process should be used to decide its new location?

On the first question I don’t have a strong view. There are several suitable cities, each of which will have their own pros and cons. My only criterion, for reasons of practicality, would be that it should be a big(ish) city rather than a small or rural location.

But the second question raises a classic economic challenge – how to allocate a scarce resource (in this case parliament) between competing interests?

Two basic options exist. We could establish a Royal Commission, made up of the great and good, to come to a considered and “fact-based” decision. Many would prefer this approach.

However, given the inherent difficulties involved in deciding between the relative strengths and weaknesses of competing places, I do not. Instead, my preference would be for a more market-based approach, in the form of a blind auction.

This would involve all those places wanting to be the home of democracy submitting a closed envelope bid by a certain date, with the highest bidder winning the “prize”. There would lots of ways of tweaking the bidding system depending on particular preferences – for example, places could be asked to make a one-off bid, or to make a bid on an annual basis.

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This approach offers several advantages that a Royal Commission would not. It would be more democratic (it would be open to all places), transparent (bid process and decision are easily understood) and efficient (no place should bid more than the price of the benefits they think they will get).

The obvious downside to an auction is that richer places such as London could bid more than less wealthy places, although they would be unwise to bid more than the value of the benefits they think they will get. And at least the winning place would pay for the privilege of being the home of government, rather than the taxpayer footing the bill.

By opening Parliament up to the highest bidder, we could at last put to bed the hand-wringing about whether cities across the UK are losing out from Parliament being based in the capital. A blind auction would establish whether different places really think they would gain from becoming the new home of UK democracy – and how much value they would place on winning that prize.

Andrew Carter is deputy chief executive of the Centre for Cities. This is an edited version of an article first posted on the think tank’s blog

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