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]


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

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