Labour openly favours the idea of English regions with elected assemblies. It is because the English establishment, in its reluctant way, is confessing that the centralising game is up.The Treasury paper itself foresees that its new local authorities would probably clump together into larger units, "the basis for a new regional tier of government". He amazed the world twice over: first by decentralising the most centralised state in Europe, and secondly because he was a socialist from the Jacobin tradition which had believed that all progress came from Paris. Today, I know from these little signs that regional governments are coming to England too.This is not just because Labour wants parliaments for Scotland and Wales, and not because politicians seek an answer to the "West Lothian Question". The German constitution, drafted mostly by Christian Democrats, obliges the federal government to "ensure a reasonable equalisation between financially strong and financially weak Lander", in order to achieve "uniformity of living standards in the federal territory".It is some 15 years since President Mitterrand set up regional governments in France.

But for him they were objects, not subjects; targets for the reforming energy of an all-powerful central government. He did not play with the notion that these regions had, or might be given, a democratic identity. Jay saw them rather as "Distressed Areas" defined by statistics of unemployment, poor health or bad housing.And yet Jay's policy contained one shining assumption which is the soul of all modern federations, which underlies the whole push of the European Union towards regionalism. This is the duty of redistribution - the commitment of central government to level up the difference between rich and poor regions.Even the Treasury document admits that local authorities, however much home rule they acquire, will demand central funds to "even out regional inequalities" This sort of redistribution is not uniquely socialist.

The danger of the Treasury's exercise is that "poor area" councils would soon collapse into no-go savagery while "good areas" would be mobbed by better-off citizens trying to buy their way in at almost any price But not all the implications of the scheme are daft. Here, dressed up in laissez-faire language, is a proposal that Whitehall should relax its grip and allow local authorities to make real choices.Douglas Jay believed in regions. If the goods are overpriced and poor, either taxes are brought down or the customer goes to buy services elsewhere.The trouble is that the social and geographical variations of wealth in Britain are already gross. (So much for the Government's derision of Labour's "tartan tax", the proposal that a Scottish parliament could marginally raise or lower income tax).In spite of appearances, there is a sort of consistency here.