9 December 2011

Last month in the Lords John Laird sought the government’s view of the status of the duchy of Cornwall in view of the oyster decision. Tom McNally, minister of state at the Justice department, said, inter alia, “The duchy of Cornwall is a private estate, the funds from which are used to support the public, charitable and private activities of the prince of Wales, the duchess of Cornwall, the duke and duchess of Cambridge and prince Harry” (Lords Hansard 23 November 2011 column WA 242). Recognise that?

He has now asked what the government means by a private estate. The government’s answer was, “A private estate is a portfolio of assets owned privately or personally” (Lords Hansard 7 December 2011 column WA 165).

It isn’t getting any better. Far from it.

The nationalist project to explore whether Cornwall can learn from the governance example of Guernsey met more biting reality with the story that Guernsey is one of the offshore tax havens used by the very, very, very rich to purchase very, very, very expensive flats in London.

Read the story of tax havens and housing here.

Yes, I know the nationalist interest is about governance not the financial model but I do not believe they can be easily separated; I think the economy and finance underpin and are central to the success of any constitutional entity in the world whether or not recognised formally in a constitution.

Earlier posts on Cornwall and Guernsey
Cornwall and Guernsey again 9 November 2011

More for Cornwall to ponder on Guernsey 18 September 2011

Cornwall and Guernsey 31 August 2011

In this post I am briefly looking at two related devolutionary issues: the constitutional and financial arrangements of the UK. PESA is the annual Public Expenditure Statistical Analyses by the Treasury.

PESA 2010-2011
The PESA figures for 2010/2011 (tables 9.2 and 9.4) are a catastrophe for the present financial (and constitutional) arrangements of the UK. They show that the latest percapita identified public spending for the four countries of the UK in £:
Northern Ireland 10 706
Scotland 10 212
Wales 9829
England 8588

As an index the figures are Northern Ireland 121, Scotland 115, Wales 111, England 97, UK 100.

Although there are regional figures there are no separate ones for Cornwall.

This imbalance is the result of the discredited 1978 Barnett formula which redistributes tax money on the basis of population not need. The differences above have continued over many years.

The main publically noted contrast is between England and Scotland though there are Barnett distributive effects in Wales and Northern Ireland.

People in England, including Cornwall, are increasingly aware that through the Barnett formula Scotland gets more UK identified public spending per head than England and is enabled to provide a range of free public services that charge in England. For example, prescriptions are free in Scotland but each item on a prescription costs the patient in England £7.40 (though there are exemptions); and compare tuition fees at the university at Falmouth which are to be £9000 a year, and no tuition fees at a Scottish university for a resident of Scotland. The financial differences are there in everyday life.

There is an England again
As for constitutional devolution, the debate for some years has been dominated by the issue of Scottish independence. While the Scottish nationalists prepare for a referendum on independence in a couple of years’ time, slowly, very slowly but discernibly, people in England are now questioning whether the present devolutionary (and financial) arrangements benefit England and are just. People in England are beginning to think positively about issues like English devolution, English-only votes on English-only matters in the Commons, an English parliament, and even independence from the UK. If, as seems possible, Scotland chooses independence outside the UK, the total effect on the other three countries of the UK is difficult to forecast. Parliament at Westminster would become in effect an English parliament with a handful of MPs from Wales and Northern Ireland but that assumes Wales and Northern Ireland choose to remain in the UK on the present terms.

Anyway, after years of manufactured invisibility there is an England again.

Putting aside Scottish independence and the consequent permutations for the remnant countries, the Barnett distribution and Labour’s asymmetrical devolution, which left England out in the cold, look set to be the end of the UK if the main parties continue to turn away from the England question – the twins of the financial and constitutional issues. This double issue won’t go away.

For Cornish nationalists too all this brings difficulties. There are two central weaknesses in claims for Cornish devolution.

First, exactly what status for Cornwall do nationalists want? I think they are seriously divided: independent British country outside the UK, independent country in the UK, semi-independent part of England, souped up county, an assembly, a parliament? How do they envisage the UK: separate countries, a federal UK with federal and independent institutions, pretty much the present set up with England and Cornwall joining the other three or two, a republic, still a monarchy …? It’s time the nationalists set out their status vision clearly.

Second, the economy and finance. Who will pay for an autonomous Cornwall? That depends to an extent on the shape of desired Cornish constitutional devolution. No one seriously believes Cornwall can live only on the money it could raise; the devolution schemes produced so far certainly do not suggest a financially self-sufficient Cornwall but rather one dependent on others’ largess. A Barnett formula solution? Really? A Guernsey-style offshore model? Really? I don’t think either is now politically practical. This is a pressing question for nationalists: how would Cornwall be financed?

So, Cornish nationalists should be crystal clear what it is they seek in terms of constitutional status and accompanying financial arrangements. The questions are simple: What constitutional status for Cornwall? Who pays?

Earlier posts
Hokey kokey devolution 14 December 2009

How should Cornwall be governed? 24 October 2009

Don’t mention the formula 1 June 2009

Cornwall pays 5 January 2009

Barnett formula to go 25 May 2008

External sites
Letter from the City of London 3 March 2009 to the House of Lords Select Committee on the Barnett formula

Memorandum by CEBR March 2009 (Centre for economic and business research) to the House of Lords Select Committee on the Barnett formula

Unequal shares: the definitive guide to the Barnett formula 2008

Yougov poll August 2011, page 12 of the poll


31 August 2011

Let me heartily recommend Treasure islands by Nicholas Shaxson which I’m reading.

It’s an analytical, detailed, and illuminating look at offshore tax havens/security jurisdictions of which Shaxson says there are about sixty in the world. There is a website which introduces the book and discusses its contents.

Tax havens are places that offer companies and mainly rich individuals comparatively low or even nil tax rates on income and capital and inheritance and a way of avoiding or minimising the higher taxes levied in other countries. I think whether one sees them as legitimate tax efficiency for individuals and companies or as depriving countries and people of tax revenue ultimately depends on how one sees taxes: a necessary evil to be minimised or underpinning civilisation. I incline to the latter view.

Read this for a measured argument about the damaging effects of tax havens. There have been recent agreements which limit the scope of some of them but critics dispute their adequacy. Tax havens still flourish.

The ‘British’ tax havens are the crown dependencies (that is, the Channel Islands and the Isle of Man) and the overseas territories like the Cayman Islands and Gibraltar. See this article in the Financial Times 25 March 2010 about Guernsey, one of the tax havens.

I think there is an additional Cornwall interest because of this study about what Cornwall can learn in autonomous governance from Guernsey.

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 the economy and finance are central to the success of any constitutional entity in the world whether or not recognised formally in a constitution – and it will be interesting to see what the study says on this.

SHAXSON Nicholas Treasure islands: tax havens and the men who stole the world (2011) Bodley Head

Addendum 23 September 2011
An update though little is said. And nothing about the financial model.

And here’s a later post on Guernsey’s finances and economy.

Yesterday I looked at the answer to a question that John Laird asked in the Lords about stannary law.

He also asked a second question (column WA 214), one about the status of the duchy of Cornwall. The government’s answer was the same as in March 2007 (see the Cornwall today post below): the duchy of Cornwall is a private estate that funds the public, charitable, and private activities of the duke of Cornwall, his wife, and two sons.

I think the evidence from the start of the duchy in 1337 suggests that it was designed to elevate the king’s eldest son and provide him with an income and there was never any question of the creation of a separate Cornwall state inside or outside England. Policy and legislation since confirm this; it is about safeguarding the interests and income of the duke who is heir to the throne, the duchy lands stretching beyond Cornwall from the beginning. Cornwall is a county in England.

The UK government’s view on this is consistent and right.

There have been several questions in parliament about Cornwall ‘constitutional’ issues. All received answers displeasing to nationalism. See these posts:

Cornwall today 11 April 2007

Cornwall is part of England – and staying put 9 October 2008

Who owns the Cornwall foreshore? 11 February 2009

Crown Estate owns sea and seabed off county of Cornwall 12 October 2010

Duchy of Cornwall 20 November 2010

Government: ‘Cornwall is part of England’ 12 January 2011

Stannary law defunct: update 7 June 2011

– and Aristotle’s teeth

Yesterday there was an hour and a half debate in Westminster Hall, an outpost of the Commons, about the Parliamentary voting system and constituencies (PVSC) bill (Hansard 11 January 2011 column 25WH). It was initiated by Andrew George, Libdem MP for St Ives.

During it Mark Harper (Parliamentary Secretary, Cabinet Office) made two robust comments about the status of Cornwall and the county border:

“…the government’s position is that Cornwall is part of England and the United Kingdom” (column 42WH)


“…the government do not subscribe to the view that one cannot represent constituents in Cornwall and other parts of the country, Devon being the most obvious” (column 42WH).

Earlier posts

Cornwall is part of England – and staying put

Aristotle’s teeth , article number 8


21 May 2009

Asked whether stannary law was still extant, the government’s reply yesterday was clear:

“The body of Stannary customary law has not been systematically repealed. It is likely however that such customary law has been superseded by modern legislation. There were also provisions in 19th century primary legislation relating to the stannaries, but these have largely been repealed” (Hansard 20 May 2009 column 1451W).

My interpretation is: in other words, in real life stannary law is obsolete — extinct, dead.

Posts on other similar Commons questions:

Duchy and stannary etc

Cornwall foreshore

Cornwall is part of England

I think that taken together the Commons answers show that the constitutional claims of Cornish nationalism are a house built on sand.