Tom Paine has written a superb rant over at The Last Ditch, in response to some very ill-tempered remarks by Kevin McKenna in the Guardian.
As I commented, though, a similar problem exists with the Labour-dominated North of England.
DK is among those who think further devolution would help:
What I would like to propose is simply this: that the entire United Kingdom be broken up into almost completely autonomous federal regions, with the Westminster Parliament handling only defence and a few other "federal" competencies (as the national government in the US was supposed to).It's certainly an attractive idea. We would want to take care to avoid the pitfalls of the American federal system. It sounds like Switzerland might provide a better model, though I don't know nearly enough about it.
The motivation is primarily economic, of course, but there are vaguely libertarian reasons too. The former is, at first glance, easy to see: the entirety of the United Kingdom is propped up by the tax revenues from the only profitable region—the South East.
But there are other advantages to doing this. Whilst the first, and most obvious, is that the rest of the country would cease to be a drain on the South East, there should be benefits to the rest of the country too. It is to no one's advantage that, in some regions, government spending amounts to more than 70% of the economy: the "free" state services crowd out profitable businesses and thus causes a lack of profitability.
Those "poor" areas of the country which—instead of adapting as heavy industry died, took the option of suckling on the state teat—would find that there was no more state money. They would have to build a viable economy or die—in their thousands. Humans are incredibly ingenious creatures and, of course, extremely industrious when their livelihood is threatened—the people of these areas would have to progress or find themselves in ever dire straits.