EMPOWERING CORNWALL
8 March 2012
The other day I read this blog post about decentralisation and devolution in Cornwall.
Linking Cornwall in
While the post gave some staples of Cornish political nationalism, the last two paragraphs were most interesting. I think the current particularist approach of Cornish political nationalism to autonomy was questioned and a practical way of achieving maximal decentralisation here was suggested: Cornwall campaigning not on its own but rather with a general project for all England and “linking into the wider debate about devolution and decentralisation within England”.
If such an approach was adopted, Cornwall “would not be alone; people in other areas would doubtlessly seek greater devolution as well”. In response to comments the thrust of the post was neatly summed up: Cornish nationalists “can help their own cause by supporting decentralisation across England”.
All-England project
I warmly support the idea that we should look for an all-England project for decentralisation and empowerment within England, rather than focus exclusively on Cornwall and contended claims that it is uniquely different (nationalists can insert the word initially before the word within). I advocated this approach as the way to do it in a post on Dan Rogerson’s 2009 bill: How should Cornwall be governed? writing:
“It is in the initial context of a general and ongoing program of decentralisation throughout England that the case for Cornwall should be made not on the ‘fly-blown phylacteries’ of an unconvincing political nationalism. The bill will deservedly fail because it fractures the case for coherent decentralisation across England; and in centring its appeal on the particularist sentiments of Cornish political nationalism it excludes many in Cornwall who do not share them.”
Decentralisation and localisation
There is a rational and democratic case for decentralisation and localisation to the cities and counties of a fully recognised and devolved England which I support. However, I have pointed out in several posts that localism, of course, has drawbacks and can mean postcode pay and benefits and the privileging of parochial prejudices; for example I think that the prospect for affordable housing is very vulnerable under localism. And I have argued that the new unitary experience in Cornwall shows that one man’s localism is another’s centralisation, most recently here. Localism certainly demands a coherent answer to the question of who decides and I deplore that its advocates shy away from these issues. For Cornish nationalists there is also the question of who pays with what money.
Balkanising England
Let me add that I also think that the empowerment of cities and counties is distinct from regionalism, or at least that based on large, artificial regions in England, which few relate to and which many see as the balkanisation and dismemberment of England. Such regionalism has no part in localism and decentralisation. Keep England whole, as it were.
Shift to all-England approach
The shift to an all-England argument for decentralisation from the current and notably unsuccessful Cornwall particularist one would be a pragmatic advance. It is the way to get to the future in Cornwall. Nationalists could see this as an initial approach and could argue for an exit from England afterwards; I
should be happy with an empowered county in England. However, I think that Cornish nationalism, shackled to the idea of exceptionalism, is not yet ready for the all-England approach but we shall see as time goes by.
CORNISH NATIONALISM AND THE RUB’ AL KHALI
11 January 2012
Cornish political nationalists want an autonomous Cornwall separate from England and with its own assembly or parliament. The wording varies and I use autonomy as a catch-all. Ten years after a Mebyon Kernow petition for a Cornish Assembly the party is trying to cry it up. I shall look at the assembly and petition in a later post but perhaps I can focus now on a difficulty that I see in the nationalist argument. I can put it in the form of a simple question: Who gets to pay for this separate Cornwall?
That question is in danger of being lost in the Rub’ al Khali, the empty quarter of nationalism.
The funding question is linked to the form of autonomy and nationalism appears to be divided on that though most seem to look for arrangements short of independence outside the United Kingdom. What happens in Scotland’s eventual vote on secession and independence may well influence how Cornish political nationalists see Cornwall’s future constitutional status.
Present funding arrangements for Cornwall
At present public services in Cornwall, stuff like old age pensions, the NHS, schools, benefits, and much affordable housing are funded directly or ultimately by the UK government from pooled national taxes paid by individuals and companies across Britain, including Cornwall. Industrial and commercial grants are also funded by the UK government from pooled national taxes. The EU returns some of the net funds the UK gives it to projects across the UK including Cornwall; these might reasonably be seen as recycled UK taxes. Local levies such as council tax and car parking charges fund only a small proportion of public spending here – as in any county. The amounts made available from the national pool to Cornwall and other local authorities are at bottom decided by the UK central government and indeed many decisions on local spending are in effect made by the central UK government.
Future funding arrangements
There are two possible ways that an autonomous Cornwall could be funded: from funds generated wholly within Cornwall or from pooled UK funds with some local levies.
Cornwall pays for itself
Is the nationalist intention that an autonomous Cornwall would wholly pay its own way (apart from externals like defence perhaps)? This means that whatever we need inside Cornwall would be paid for by taxes raised only in Cornwall and not elsewhere; and a nationalist Cornwall would take its own decisions using only its own locally-raised money. It would set and collect its own income and corporate tax rates, for example.
Such a self-financing Cornwall would effectively be independent.
However, I doubt that this self-financing is feasible. I do not believe enough money could be generated from within Cornwall to pay for a twenty-first-century state.
Barnett dependency
More likely is the funding of Cornwall based on the Barnett scheme or some such. The expectation would be that taxpayers outside Cornwall would subsidise our devolutionary fling; that is, taxpayers in the UK, largely England and largely London and along with the EU, pay us more from the common pool than we put in. Suppliant devolution, eh; you pay, we spend autonomy. Some destiny that, and vastly unattractive and unpersuasive.
The 2001 petition did not detail funding and the 2009 parliamentary bill for an assembly seemed to envisage Cornwall largely funded by a redistributed pool arrangement. However, the Barnett scheme is increasingly contentious because the three devolved areas of the United Kingdom are seen by many to get unfairly larger per head shares of public spending compared to England (including Cornwall). I think that the present Barnett formula is unsustainable and remains only because UK politicians fear to stir devolutionary waters.
The Cornish political nationalists should tell us exactly what they have in mind financially for their separated Cornwall; and give us their arithmetic. It is not credible to talk about autonomy, devolution, semi-independence, and so forth, and not detail funding; without a published funding scheme nationalism is showering us in hot air and cannot be taken seriously.
Notes
Some recent comments about the Barnett formula are here (letter headed Celtic cash cow) and here (Council taxpayers in England losing out).
English and Cornish devolution 6 September 2011
Hokey-kokey devolution 14 December 2009
CORNWALL AND GUERNSEY AGAIN
9 November 2011
The UK government is at last ending from April next year the tax loophole which lets distributors in the Channel Islands undercut both shops and online suppliers in Britain by shipping goods worth below the threshold of £18 (reduced to £15 this month) to the UK free of VAT.
Entirely legally, companies have imported ‘low value’ goods such as music disks into the Channel Islands and then shipped them out to customers in Britain free of VAT. Last year this loophole cost the British government – you and me – about £130 million in lost tax revenue and perhaps £600 million over the last five years. Closing the loophole will adversely affect the economies of Guernsey and Jersey.
The Channel Islands are also under pressure about their role as tax havens.
Additionally, a report Who is paying for Jersey to be a tax haven? (on the taxresearch.org website 2 November 2011) sets out the effect of local tax policies on people and companies there. It is not for progressive stomachs. For example, in 2000 42 percent of tax was personal, in 2011 this had risen to 84 percent, a vast move of tax from companies to people.
I have discussed Guernsey in two previous posts Cornwall and Guernsey and More for Cornwall to ponder on Guernsey. This interest is because of the Biscoe-Howells study about whether Cornwall can learn about autonomous governance from Guernsey. As I said in my first Guernsey post, it might be said that the interest is the government model not the financial model. I’m not sure one can separate them easily in 2011. I think that the economy and finance are central to the success of any constitutional entity in the world whether or not recognised formally in a constitution.
I do not think Guernsey is a model for Cornwall.
MORE FOR CORNWALL TO PONDER ON GUERNSEY
18 September 2011
I wondered in this post if the Biscoe-Howells study of whether Cornwall could learn in autonomous governance from Guernsey would take into account the financial model which underpins the economy of the island (and Jersey).
That model is largely about Guernsey as a tax haven for the rich of course; but there is an aspect that I should like to note.
Last week in the Commons Jonathan Edwards, a Plaid Cymru MP, asked the UK Treasury when it was going to stop the low VAT (low value consignment relief) levied by the Channel Islands on entertainment products, such as music disks, a scheme that is harming shops in Britain (Hansard 12 September 2011 column 1044). The government said it is looking into the issue which might mean action is forthcoming or nothing will happen as nothing happened on this under Labour.
Edwards also asked how much the Channel Island VAT policy is costing the UK in foregone revenue. The answer was £130 million in 2010 and nearly £600 million over the last five years.
Does the study take into account this scheme and its possible end?
Take a look at this post on Richard Murphy’s Tax research blog – and the comments. Murphy has also written about the Isle Man and VAT.
INDEPENDENT ENGLAND
5 July 2011
A poll in June 2011 by ComRes for the BBC shows that 36 percent of adults in England support England becoming a “fully independent country with its own government, separate from the rest of the UK” (see table 4 of the poll). 57 percent opposed this.
I don’t suppose this unintended consequence even flickered across the minds of the Labour devolvers. Labour seems to have thought that devolution was a static event; it isn’t, it’s a dynamic process as the party is learning painfully. The guns of the Scottish Nationalist party have not been spiked and there is growing dissatisfaction in England where many seem to think the country has drawn the short straw of the UK financial and parliamentary arrangements. None of the three main UK parties has yet worked out a convincing response to England.
UNITED KINGDOM
18 March 2011
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Prescription charges
Wales FREE
N Ireland FREE
Scotland FREE from April 2011
England £7.40 per item from April 2011
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DEVOLUTIONARY DANCES
22 July 2010
UPDATE 22 July 2010 at the end
ORIGINAL POST 20 July 2010
In an attempt to frustrate the nationalists and independence, Labour ran a referendum in Scotland for devolution, a semi-independence, which was won. To be even-handed Wales got a referendum too, very narrowly won by devolvers, but with fewer powers and an assembly not a parliament. Both countries gained devolved status within the UK. Frustrating nationalism hasn’t worked: the nationalists now run the Scotland government and have a hand in running Wales. If the Scots get the referendum on independence promised by their nationalist minority government, it will be interesting to see what happens; at present polls suggest it will be lost.
I think Labour naively thought its devolution would do and be the end of the matter. Well, devolution has whetted appetites not dulled them. There are moves to change the political and financial powers of the devolved countries. Devolution itself has turned out to be the unfinished business it was meant to finish.
Last year the Calman Commission said that Scotland should get more fiscal powers, and the Scottish block grant, the Barnett money, should in the long term be based on need not as present on both population and arithmetically what happens to public spending in England.
This year the Holtham Commission for Wales also says the block grant should be based on needs and the Welsh Assembly should have more financial powers. Additionally, there are moves to give Wales the sort of parliamentary powers that Scotland has and to rename its assembly as a parliament.
These two commissions make an excellent case for giving the two devolved legislatures more tax powers and responsibility for raising a significant part of the money they spend. Governments and people should be responsible not for just spending public money but also for having to raise it from taxes; this makes governments democratically accountable for getting and spending and people alert to their part in interdependent taxation and public spending. However, I think if greater fiscal powers for the devolved legislatures resulted in even slightly lower income tax in Wales and Scotland than in England that would certainly have an enlivening effect in England. Additional non-taxation powers do not raise the same degree of difficulty.
What would the funding effect be of replacing Barnett with a needs-based formula, patently more socially just? The 2010 report by Gerald Holtham et al for the Welsh Assembly says that if the Barnett funding was replaced by needs-based funding, annually Wales would get more, Northern Ireland more or less the same, and Scotland significantly less. In chapter 3 of the Holtham report the indicative proportions are England 100, Scotland 105, Wales 115, and Northern Ireland 121; the present Barnett public spending shares are set out in this post. Of course the yardsticks for need are debatable and I would expect all the Scottish politicians to challenge any diminution of their public spending share.
Will Barnett be replaced by a needs-based formula? I don’t see the Tory Libdem UK government or Labour proposing to cut Scotland’s proportion, political suicide for their parties in Scotland, so it is difficult in these circumstances – and impossible in the present straitened circumstances – to see Wales getting more. Holtham suggests that an increase in the ‘Barnett’ funds for Wales will not happen until there is an adjustment in Scotland’s.
The devolution settlements are changing. Scotland and Wales are certain to get more powers to run their own affairs. The differences among the UK countries, such as charges for NHS medicine, will continue to grate on the English, and lower taxation would scour. There is a limit to how far devolution, especially fiscally, can go before the UK as a single political and economic entity is damaged.
Incidentally, the calculations by Anthony Wells on 5 July 2010 here suggest that the Tory Libdem proposals for a UK parliament of 50 fewer seats and more or less equal electorates mean Wales will lose ten of its present forty seats, Northern Ireland three, and Scotland half a dozen. They are presently by population over-represented in the UK parliament.
England continues to be largely ignored by the parties (and the commissions) but there are suggestions of devolutionary stirrings. The Tories talk desultorily about English votes in the UK parliament for English laws and Harriet Baldwin, Conservative MP for West Worcestershire, has a bill to compel the identifying of the separate effect of legislation on England, Wales, Scotland, and Northern Ireland – part of the West Lothian answer. Labour seems to be tentatively thinking about England and Englishness but is still at present more at ease talking about Britain and the British. The dismal Labour vote in England (28 percent of votes compared to the Tories’ 40 percent), a much lower Labour proportion than in Scotland and Wales, has perhaps encouraged the party to focus on the need to attend to specific English concerns. Labour’s attempted abolition of England through its balkanisation into regions died when John Prescott’s referendum was decisively lost in the northeast and the party has been unclear about England since. The Libdems – who favour regionalisation, or did, who can say what they now support – seem to ignore England completely though most of their current UK parliamentary seats are in England. No party supports a separate English parliament (as in Scotland, Wales, and Northern Ireland). The difficulty here is that a move to separate off England in any way may be fatal to the common parliament where four fifths of MPs sit for England seats and fatal to the asymmetrical UK; English votes for English laws seems the option least destructive of the UK but were Scotland to choose independence or were devolution generally to advance far along that road, the form of Britain and England’s role would have to change.
I have not looked at Northern Ireland but the devolved status appears to be fragilely holding as those who see Ulster as part of the UK and those who see it as part of the Irish Republic are working together for the present. Any shift in the basis of Barnett would affect Northern Ireland too.
The devolutionary settlement is turning out to be a beginning not an end and Britain seems to be quietly fragmenting. There is no unstoppable move towards independent countries but the status of them within Britain is changing. What happens to England is a major issue. As for Cornwall, I have explained before that I think its future is not in self-absorbed independence or semi-independence; it is in the empowerment of genuine localities throughout England.
UPDATE 22 July 2010
Yesterday in the Commons Philip Davies, Conservative MP for Shipley, asked the under secretary of state for Scotland when Scottish MPs would be stopped from voting on England-only matters in the Commons. He was told the Tory Libdem government was going to set up a commission to examine the question and that the government was “determined to deal with the issue”. [Hansard 21 July 2010 column 335-336]
REFERENCES
Final report of the Calman Commission on Scottish devolution June 2009
Report of the House of Lords Select Committee on the Barnett Formula 17 July 2009
Report to the Welsh Assembly of the Holtham Commission on funding for Wales July 2010
Previous post: How should Cornwall be governed 24 October 2009
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HOKEY-KOKEY DEVOLUTION
14 December 2009
The Walker review of water charges, which I discussed the other day, leads me to questions about devolution.
Last month the team of Cornwall Libdem MPs responded to the queen’s speech — the Labour government’s program for the next six months — by suggesting a list of three measures that they think are needed urgently for Cornwall. The list comprised a devolution bill, second homes, and the equalisation of water charges.
Rogerson writes (presumably on behalf of the team) of wanting “radical devolution of power to Cornwall” and ensuring “the whole country pays its fair share for maintaining the coastline.”
The issue of the water bills of course applies to all the area of South West Water, as the Libdem MPs acknowledge, but the issue of water bills and devolution applies only to Cornwall.
Pick and mix
Let me point out again a dissonance here. The recent Cornwall devolution bill did not involve fiscal devolution but Barnett-type arrangements as far as I can see and now the Libdems seem to be saying that they want far-reaching devolutionary powers for Cornwall but when it comes to meeting the cost of Cornwall’s water bills they want to be part of “the whole country”. Apparently in a Liberal Democrat devolved Cornwall the full cost and payment for Cornish water and sewerage and beaches and clean-up is not to be the responsibility of only the people in Cornwall. This is an odd and unconvincing devolution. It looks to me like devolution with Cornwall half out of the country but jumping back to be wholly in the country for water bills. This is a pick-and-mix devolution, a hokey-kokey devolution, in, out, in, out.
Foreshore
There is another quirk in this. The coastline, for sewerage disposal and clean-up purposes at any rate, is the beaches, cliffs, and adjacent sea and definitely includes the foreshore, the part between high and low tide. Look at the argument for some sharing over the “whole country” of these Cornwall bills, look at the various Libdem descriptions of the the beaches of Cornwall as a “national asset” and a “national treasure” and of the Cornwall coastline as “Britain’s coastline”. Isn’t all this a recognition by the Libdems that the coastline of Cornwall (including the foreshore) is part of the whole country and not just a peculiar of Cornwall or the duchy? Oh dear, what do the foreshore nationalists say? I’d like to hear the nationalist argument for someone in Newcastle on Tyne, England paying towards a clean up of territory in Cornwall which belongs not to the whole country but to what those nationalists see as the sovereign duchy of Cornwall.
(Incidentally, “the whole country” of the Libdems is not identified. The Anna Walker inquiry into water charges covers England and Wales; Scottish Water is publicly owned as is the service in Northern Ireland. So country could mean England and Wales or England or the UK.)
