15 April 2013

In the blog post The first labour of Mebyon Kernow I looked at Mebyon Kernow’s unresolved ambiguities about what it wished for the government of Cornwall: a stew of independence, semi-independence, devolution, a parliament, an assembly, a souped up county council, in England, outside England, in the UK, outside the UK, republic, monarchy.

Don’t look, don’t tell
I am now going to look at MK’s ambiguities about the financing of its Cornwall. These ‘labour’ posts are not about the local elections and manifestos only, but about MK’s published wider aims for Cornwall. MK seems not to have worked out thoroughly and coherently how it sees the funding of its autonomous and nationalist Cornwall, but no state or county or whatever in between can flourish without money in its exchequer. This is a question fundamental to MK’s ambitions.

Where would the money come from for an MK Cornwall? The answer is interwoven with what sort of governance its Cornwall would have, the resolution of MK’s first labour.

Nationalist responses have been inconsistent as I pointed out in the post Hokey-kokey devolution.

I explored this question too in Cornish nationalism and the Rub al Khali and asked Who gets to pay for an autonomous Cornwall. I shall repeat parts of that post here mutatis mutandis.

Present funding arrangements for Cornwall
I put in the next paragraphs a simplified and short account of the financing of Cornwall. A fuller account is in Surviving the crunch by the Audit Commission, 2010.

Central UK government collects taxes from individuals and companies and businesses, and borrows money, and redistributes some of those pooled funds to councils, including Cornwall, as revenue and capital for spending on public services and projects and the encouragement of enterprise. The EU also recycles funds for projects across the UK, including Cornwall.

This system of pooling and redistribution pays for pensions, benefits, schools, hospitals, roads, and grants to private enterprises for example. Local council tax, raised from people in the council area, funds only a minority proportion of councils’ public spending: see chapter 3 of Surviving the crunch. On top of council tax there are direct payments by people for particular services, such as using car parks and applying for planning permission, and some council borrowing and match-funding arrangements.

The amounts made available from the national pool to Cornwall and other local authorities are decided by the UK central government according to various and varying formulas and indeed many decisions on local spending are in effect made by the central UK government. An example this year is a cut in central government funds to councils which has led Cornwall Council to impose some council tax payments on people hitherto seen as too poor to pay any.

Future funding arrangements
There are broadly two possible ways that an autonomous Cornwall could be funded: from funds generated wholly within Cornwall and redistributed wholly within Cornwall or, as in the preceding paragraph, from pooled UK funds with some local levies in Cornwall.

Cornwall pays for itself
Is it MK’s intention that an autonomous Cornwall would wholly pay its own way (apart from externals like defence perhaps and recycled UK funds from the EU)? This means that whatever we need inside Cornwall would be paid for by taxes raised only in Cornwall and not elsewhere; and an MK 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, and take responsibility for funding future ‘state’ pensions.

Such a self-financing Cornwall would effectively be independent though if it used the UK sterling currency that independence would be curtailed by financial decisions in the rest/remnant of the UK.

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. What does MK think?

Financial dependency
More likely is the funding of a nationalist 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 would pay us more from the common pool than we put in. Suppliant devolution, eh; a you-pay-we-spend autonomy. Some destiny that, and vastly unattractive and unpersuasive. Such funding would require Cornwall to remain in the UK, a monarchy, and would also limit the autonomy of Cornwall.

The 2001 petition did not detail funding and the 2009 parliamentary bill for an assembly seemed to envisage Cornwall largely funded by a redistributed UK pool arrangement, though this came from Libdem MP Dan Rogerson and MK did not think the bill gave enough autonomy to Cornwall.

An uncertain vision
Although MK does not as far as I can see explicitly spell out its preferred funding scheme for Cornwall there are somewhat contradictory clues in the policy statements and manifesto on its website.

On the one hand the MK 2013 manifesto laments Cornwall’s present share of redistributed UK funds and seeks a larger share apparently on the basis of need, though how we measure and meet need are contended. This approach indicates that MK does not believe an assemblied Cornwall could be self-financing but rather sees it as financially dependent on UK (largely English) redistribution. On this reading MK seeks a Barnettesque policy for a Cornwall. The argument is then about what Cornwall’s share of redistributed UK funds should be and how that would be determined. MK promotes the victim view that Cornwall is suffering from unfair Government underfunding, a view which I have challenged several times on the blog.

On the other hand MK in its website policies seems to invoke a Cornwall sufficiently financially independent to increase funding for affordable housing and reduce indirect taxation and tax avoidance. Alongside these sovereign aims would be a separate curriculum for schools in Cornwall, more spending on the Cornish language, a radical reform of the financial sector, and the establishment of a Cornwall department for economic development. I think together these, the aims of a party for a country not a county, imply a Cornwall financially independent of the central UK government, a Cornwall commanding its own funds.

However, the language of policy is often indecisive. For example we have the string “MK is committed to … support for.. a reduction in indirect taxation”. I have presented these MK policies more forcefully than MK which amusingly uses the familiar language of what it unconvincingly calls the London-based parties to express this vision, a mix of MK believes, want(s) to, is committed to, will establish, call(s) for, supports: aspirations, promises that aren’t quite.

I think the indecisiveness in language reflects ambiguity, unsureness, and unease in MK about the fundamental questions of Cornwall’s governance and financial basis. The party appears not to have worked through this thoroughly. It appears confused about whether it is presenting a case for a country or a county. The vision is blurred, uncertain.

MK should be clear about the funding of its Cornwall
MK should tell us exactly what it has in mind financially for its separated Cornwall; and give us the arithmetic. It is not credible to talk about autonomy, devolution, semi-independence, financial aims, and so forth, and not detail the amounts and sources of funding and give some idea of priorities and a timetable. Without a published funding scheme which estimates how much it will all cost and identifies where the money will come from, MK is showering us in hot air and cannot be taken seriously as a national party. What is needed is a clarity from MK setting out its governance and financial proposals, with the arithmetic, order of priorities, and a timetable.

Let me acknowledge that those other parties in Cornwall whose local publications I have seen – I haven’t seen all the parties’ – seem lacking in details about costs and timetable. They all seem to assume a continuing Barnett-style subsidised financial model for Cornwall and, as far as I can read their localism, what strikes me as a souped-up county.