Thursday, 22 January 2015


 
‘The Implications of Devolution for England’
A response to the document presented to the House of Commons December 2014
Introduction-fundamental issues                                                                                              Cm8969[1] contains, and indeed conflates, two important areas of governance: one-local government and decentralisation of power, of long-standing existence and debate, and the other-devolution, a recent constitutional innovation. The two are not necessarily connected. How can power can be brought closest to the people, encourage local participation, engender a real feeling of community and raise voter turnout? These are issues with which governments always grapple. Not only has local government in recent years become more of a partnership with central government in delivering the centre’s priorities, but there has always been a tension between decentralised and centralised delivery of vital services. For example, the NHS as a national service created deliberately so after the war to iron out differences in health outcomes (and therefore life chances), rather than a locally responsive service under the auspices of county councils.[2]

The dichotomy between the Health Secretary being accountable in the House of Commons for government action on the nation’s health and locally determined priorities (funded perhaps in future only by money following the patient, rather than so heavily influenced by national targets) presents a fundamental challenge. Moreover, the present situation with Health being run by local (unelected) people, but having to meet many central government targets can be said to either provide the best or worst of both worlds. Can there be local control over Health if the ‘experts’ tell us that larger units produce better and safer outcomes but people prefer a smaller and geographically closer facility? The situation regarding education, described previously as “a national system locally delivered,” has been transformed by the creation of free schools and academies added to schools run directly by Local Authorities. OFSTED and the National Curriculum (with the freedom to disapply elements) provide a national framework and benchmarks so that we can still talk of a national service. But the tensions between local and national accountability (and at local level whether to a local authority or parents directly) inherently remain.[3] How we do reconcile national need in planning law with locals in effect wanting no ‘spoiling’ development? Can central government ‘let go’ because a locally-oriented service provides better outcomes, or in the interest of fairness must there be tight nationally enforced standards?

Local Government                                                                                                      Purpose and size                                                                                                                        Concerning local government, Implications heavily emphasises the large scale: Regional Growth Fund, Metro mayors (i.e. Greater Manchester Combined Authority) and services reaching over local government boundaries such as transport[4]. It also focuses on the North with the commendable desire to create a ‘Northern Powerhouse’ in order to reduce the economic gap in relation to London. However, there is nothing regarding less economically successful areas such as the South-West, or how northern initiatives will relate to, for example, Kent/Sussex and other areas which cannot easily be regionally defined. Moreover, a number of the councils which are to gain elected mayors rejected them within the last two years. There is the danger that going ahead so soon after rejection can be seen as just another example of central government riding roughshod over local sensibilities in partnership with local councillors and interest groups (which bolster the latter’s position). Above all, there is no discussion of the trend towards larger and larger LA’s in a country where the average district council has an average population of 140,000[5] compared to the Continent where many local government units are much smaller-and whether this is desirable. There is also no consideration regarding policing that the conspicuous and remorseless trend from small local forces to extremely large ones may not be uniformly welcome.

Finance                                                                                                                                                The most serious issue missing from Implications is that of local government finance. It is surely impossible to deal with local governance holistically without considering how (and how much) money for local services is raised, and the influence/control local voters will have upon it. This is a crucial omission. Whether revenue is raised by a local income or property tax, its administrative complexity and cost are challenges. Moreover, the former may be seen as a Trojan horse for regional government. Allowing LA’s freedom to set their own taxation level to raise income above the block grant/fees and charges, opens up a can of worms in central government’s view, regardless of who is in power. Not only does it place an element of public spending potentially beyond Westminster control, but makes possible serious inequalities in services deliberately being opened up within the same nation[6]-the principle behind the Bevan (centralised) and Morrison (locally run) argument regarding the NHS. The Council Tax cap, imposed by successive governments, regardless of party, is a fundamental restraint on local democracy in that central government prevents voters from making the “wrong” choice. Implications fails to address any of these fundamental principles. The result is a thin and partial document which is in danger of hardly being noticed in respect of the local government content, and certainly fails to address the needs of the whole of England.

The ‘West Lothian Question’                                                                                                    Concerning the effect of devolution on England and the ‘West Lothian Question,’ there are three possibilities: 1) the question is not worth answering because it’s not a big deal and many/most English people actually do not care 2) the question can be answered by an English Parliament or EVEL 3) answering the question with an English Parliament/EVEL is in effect English separatism and will cause the breakup of the UK. We must remember that not only is this being considered in the context of more powers being promised to Scotland, but that the Barnatt funding formula, which is uniquely favourable to Scotland at England’s expense, will remain intact. But there is also a factor which (understandably) is not contained in the Implications document. While independence was on the Scottish referendum ballot paper, ‘Devo Max’ was not. We have the odd situation that a major constitutional change that was specifically excluded from the referendum vote is now presented as a done deal. Moreover, the extra powers were suggested in what is widely regarded as a moment of panic by three politicians, one of whom will certainly not be an MP after the GE, another may not, and a PM who may not still occupy that office.

Referenda                                                                                                                                                We must remember that the referendum represents a recent and massive constitutional innovation, previously judged incompatible with parliamentary sovereignty in this country. The history of the UK referendum is a somewhat disreputable one of questions being put to a popular vote to avoid party splits and get governments out of a political mess, rather than as well thought out policy proposals for the good of the country. The 1975 European Community (Common Market) vote was Harold Wilson’s way of keeping the Labour Party united. The votes to establish Welsh and Scottish devolution were intended (ironically) to dish the nationalists because it was feared they would win Labour seats,[7] while a low turnout in the London mayor/assembly referendum, and comparatively low ones in Wales and Scotland, were ignored.[8] The requirement for local referenda concerning grammar schools and in order to raise the Council Tax above 2% represent attempts to gain party political advantage by Labour and Conservatives respectively, not the use of an impartial constitutional instrument. To go ahead directly with ‘Devo Max’, which further destabilises our constitution and the Union-and was not on the independence ballot, without full national discussion is unacceptable. Moreover, it is strongly arguable that while independence is only a matter for a referendum in Scotland, the transfer of exceptional powers with potentially such serious consequences for the Union, while leaving the Barnatt Formula unreformed, logically ought to trigger a vote in the rest of the UK, particularly in England.

The referendum had previously been regarded with suspicion in this country as something often used by dictators, from confirmation of Napoleon III and Hitler’s power or of the Soviet constitution to Crimea’s recent ‘independence’ from Ukraine and incorporation into Russia The post-war changes in the French constitution can also be seen as being more about embedding partisan political power than gaining good governance. The previously noted almost unanimous use of referenda in the UK to gain party advantage or avoid party splits, contrary to their publicly stated purposes, suggests that it is most often used for reasons in this country we might describe as corrupting democracy rather than enhancing it. There is also a fundamental problem regarding the wording of a referendum question. Questions which suggest the positive answer ‘Yes’ (such as in the Scottish vote) or contain the word ‘remain,’ encouraging support for the status quo, show the immense difficulty of constructing neutral wording. It is difficult how controversy can be avoided over the wording on the EU in-out referendum ballot paper. Such a question ought to include the consequence of leaving will create a ‘sovereign,’ or ‘independent’ Britain, which those in favour of membership are unlikely to agree. But wording such as “Should Britain remain in the EU” contains the loaded status quo word remain. Is it even possible to achieve a neutral wording in referenda? There is a strong argument that it is not.

The Smith Commission                                                                                                                       The Commission was set up in great haste after the referendum, reinforcing the sense of panic engendered during it. There were only four weeks for public submissions and no input from anyone outside Scotland. This is disrespectful to the other nations comprising the United Kingdom. Unilateral action such as this suggests that the Union no longer exists. Decisions of constitutional import surely deserve to be carefully considered. The Commission has acted as if devolution of Income Tax rates, thresholds and certain benefits are matters of no concern to the nations of the UK and that their economies are sealed. Although the block grant would be changed to match any decisions on taxation by the Scottish Parliament, this creates a situation of the worst of both worlds where Scotland can vary tax at the rest of the UK’s expense and use the revenue for some different priorities to some degree-but one which will always be insufficient for the separatists, but the Block Grant/Barnatt situation remains. National Insurance, Corporation Tax and the majority of the VAT raised in Scotland will not be devolved. The Scottish Government will have complete power over services such as health and education-those which determine how people vote, but not over all the money required to run public services, a proportion which will still come from the UK budget after great expectations have been raised in the referendum. At the same time, devolution means that other parts of the UK (especially England) are contributing towards services over which they have no influence.

Crown property in Scotland and revenue is to be devolved ownership of Crown property, suggesting an independent country. Devolution of control of onshore minerals is not going to satisfy the SNP, which covets the whole of the North Sea oil resource. In any case, onshore minerals in the rest of the country contributes to the UK budget, while those in Scotland only to its budget at the same time as the Block Grant and Barnatt Formula remain. The idea that the proposals will enhance mutual co-operation and partnership is wishful thinking. That they “will not cause detriment to any part of the UK as a whole nor to any of its constituent parts”[9] is more reminiscent of the conclusions of a party political manifesto rather than a believable, certifiably unbiased and rigorous public report. The ability to levy Income Tax is the prerogative either of a nation state or a component of a federal state. The statement under the heading “Permanence of the Scottish Parliament” that “UK legislation will ensure that the Scottish Parliament and Scottish Government are permanent institutions”[10] is either meaningless under the convention that no parliament can bind its successors, or suggests that the Commission believes Britain already has a federal constitution.

Paragraph 7 of the UK Governmental Analysis for the Smith Commission[11] is worth quoting in full-

To be successful for both Scotland and the rest of the UK, devolution must enable Scotland to have the best of both worlds.[12] This means ensuring that Scotland continues to benefit from the advantages of remaining in the union, while building on and enhancing the existing benefits of devolution. Devolution allows decisions to be made which reflect Scottish circumstances in key areas, bringing government closer to the people of Scotland. At the same time, it should sustain those core elements of the union that are key to the collective prosperity of all the nations within the UK. The most important are those that underpin an effective currency union, with a strong, independent, central bank and financial stability across the whole UK. This includes a credible UK-wide fiscal policy-which enables all nations and regions of the UK to pool financial resources, manage financial risks and borrow as a single and credible participant in international-a banking union; and the free movement of goods and people.”

 

In other words, of the United Kingdom, only a customs union is to be left.

 
Future effects of Scottish additional powers                                                                                ‘Implications’ states that interest in the West Lothian Question has been reignited by the Scottish referendum-a vote we must remind ourselves the separatists lost. But actually this question has attracted very little interest over the years, with no traction gained by the English Democrats or William Hague’s previous championing of an English Parliament. The greatest injustice to England is that it subsidises Northern Ireland, Wales and Scotland. The former two nations can be described as requiring economic assistance, but certainly not Scotland-particularly since the crux of the separatists’ argument is that it can stand on its own feet as an independent country. This genuine injustice to England is of course exactly the one issue that is not going to be addressed. Moreover, the effect of giving Scotland more powers while Scottish Enterprise already uses taxpayers’ pounds to entice companies and investment north of the border means that with more powers, they will be able to offer greater incentives and compete even more effectively, while still being subsidised by England. If anything has been ignited in England regarding the consequences of devolution, then it is because of the unwise promise of extra powers to the Scottish Parliament via the hasty Smith Commission report.

The effect of tax and other incentive competition will be particularly felt in the North-east, even if the Barnatt Formula is modified. At the same time as the Government wants to close the gap between parts of Britain and within England, it will be obliged to give extra aid to areas such as the North-east because of the additional competitive advantage Scotland will receive. More powers for Scotland also revives the question of regional government, comprehensively rejected by the North-east previously. Given that there are no natural regional boundaries or identities in England, either artificial ones would need to be created, or powers devolved to local authorities on an ad hoc basis as proposed. To balance the advantages given to Scotland these would need to be considerable-in effect creating federalism by stealth.[13] The suggestion that these should include primary legislative powers is tucked into the ‘Implementation Issues’ section with no supporting information or context, and buried among proposals for all tiers of local government. Primary legislative powers, once gained in one part of the country will inevitably be seized on in others, rather than risk being ‘left behind.’ Nor is there any consideration in the document of the effect on the Westminster Parliament. Federalism would be the logical result. England dominates with 85% of the UK’s population, so creation of an English Parliament is impossible. Thus, artificial regions would have to be created.

Finance-the necessity of UK-wide accountability                                                                              The paper implies that the issue of MP’s voting rights is the most serious kind of injustice, which needs to be rectified by some kind of EVEL. However, as previously noted, it is the disparity in financial contributions which constitutes the most serious imbalance at present (which could be solved via the Barnatt Formula), with this situation set to worsen with extra powers for Scotland. EVEL does not address the financial injustice to England. It is also based upon ignoring past constitutional practice and involves a fundamental misunderstanding of how the UK-wide financial settlement works. Since the block grant funds a major part of Scottish spending, and would do even if all income tax is devolved, there are no specifically ‘English’ domestic matters involving public expenditure. If spending is reduced in England, it has a knock-on effect elsewhere in the UK and therefore MP’s from all its constituent parts must be able to vote. The 1973 Royal Commission on the Constitution summarised the situation as-‘Any issue in Westminster involving expenditure of public money is of concern to all parts of the United Kingdom since it may directly affect the level of taxation and indirectly influence the level of a region’s own expenditure.’[14]

Necessary effects of EVEL                                                                                                                After a General Election, the situation under EVEL could arise where a government with an overall UK majority (most likely Labour), but without Welsh, Scottish and N. Ireland MP’s voting on issues affecting England, could not implement policies on ‘English’ issues. If English MP’s were to be organised in a Grand Committee (effectively an English Parliament) then an opposition party with a majority there (likely Conservative overall or Conservative dominated/led) could block a large amount of the government’s programme-“bifurcated government would become deadlocked government.”[15] It would also inevitably not stop at blocking measures it deemed against England’s interest but desire to propose measures for which it did not have the power to raise supporting revenue. For the English majority party it would be hard to resist the temptation to whip up a sense of “It’s unfair to England” to position itself as England’s champion and gain a party political advantage, no matter arguably how necessary a UK-wide policy might be that it opposes. A reasonable, non-confrontational party leader would be in danger of being outflanked by a more determinedly ‘English’ party. He or she would have to become more confrontational or risk losing votes, or even be replaced from within their party. It would present the perplexing situation of a deadlocked parliament; in effect a minority government, when one party could have a UK-wide majority. Moreover, this would cause most notable difficulty where Labour wins an overall UK majority, but there is a Conservative majority in England. Past constitutional crises would seem tame by comparison. The very real danger exists that this would be resolved by England breaking up the Union. Thus, attempts to solve the so-called West Lothian Question are actually the answer to the ‘How to achieve English independence’ question.

Constitutional ‘reform’-no need to rush                                                                                            There is no principle that our constitutional arrangements have to be neat and pristine without any anomalies. Messy compromise is perfectly acceptable. Indeed, it is almost a British cultural/political marker. It is the ‘Reformists’ who want everything to be neat and tidy, no matter what the potentially harmful consequences are. Moreover, there must be a strong suspicion that if the position in parliament was reversed and Conservatives had the 40+ Scottish MP's, there would not be the same urgency or even demand for 'English votes for English laws.' From 1922 to 1972 the Conservative Party’s Unionist allies deprived Labour of a working majority on two occasions, despite having a devolved parliament in Northern Ireland. There was no suggestion that there was a ‘Belfast Question,’ let alone that it was of such import and injustice that it needed to be addressed. Conservative spokesmen insisted that all UK MP’s had an equal right to vote in the House of Commons.[16] The document passes over this.

What is the hurry to deal with the consequences of Scottish devolution when Britain’s constitutional relationship with(in) the EU is due to be resolved in a period of two years? It is far more sensible to undertake a comprehensive renegotiation of our position within the EU. If renegotiation results in the repatriation of substantial powers, or exit from the EU, powers and respect will have been restored to Westminster. A UK government committed to national unity could then promote the powerful uniting theme that we are 'all in it together' in the global race with some credibility as our national parliament would again be sovereign. It is this sovereign power which allows politicians to get things done. Crucially, it also gives the citizen confidence both that an elected representative really can do what the voter expects, and be held accountable. Moves to culturally rebind the nations of the UK together could go hand-in-hand with this. If this does not occur, then there will need to be fundamental review of our constitution, but to introduce EVEL now would be jumping the gun even without the objection in principle that it will prove disruptive rather than settle any question.

 
Conclusions

·         The proposals for strengthening local democracy and reducing the ‘North/South Divide’ are welcome, but must address local government finance and the questions whether ‘bigger is better’ plus the relationship between tiers across the whole current field of local government.

·         Local councils must be able to raise a very considerable amount of their finance to be properly accountable. Capping is against the spirit of local democracy and works against the decentralisation the government is commendably pursuing.

·         The referendum is a recent innovation which has been consistently misused for party political advantage-locally and nationally, and for which it is impossible to fairly frame the wording of the question. It has generally failed as an unbiased element of the British constitution.

·         The rushed nature of the Smith Commission’s work and the exclusion of input from the other nations of the UK is undemocratic, insulting and unacceptable. All of the UK must have a proper say on these proposals-and not merely in a handpicked ‘constitutional convention.’

·         By devolving Income Tax the Smith Commission proposals proposes a feature found in a federal state, although this country does not have a codified constitution.

·         The Smith Commission proposals alone will cause disruption to the Union, but without change of the Barnatt Formula to one based on need they will increase English resentment all the more.

·         Because finance affects all parts of the UK, all MP’s must be able to vote in the House of Commons. Asymmetry is the price we pay for the Union due to devolution.

·         EVEL is not is to the answer to the West Lothian Question but is likely to lead to English separatism.

·         The present rush in constitutional matters is unnecessary. The most important conclusion is that consideration of all the devolution proposals should be delayed until the position of the UK in or out of the EU has been determined.



[1] Henceforth Implications
[2] Which by responding to local differences could perform better rather than willing something from the centre which is not actually delivered
[3] And we may suspect also involves vested interests
[4] And how do they differ from the old Metropolitan councils: West Midlands, Greater Manchester etc?
[5] Bogdanor 2009, The New Constitution of Britain
[6] England being a nation, not a country-it is often unclear what ‘country’ means in the document
[7] A conversation between Tony Blair & lord Ashdown in which the former said, “You can’t have Scotland doing something different from the rest of Britain” (concerning student support) and on being reproached by Ashdown as to why he had introduced it commented, “I’m beginning to see the defects in this devolution stuff” adds weight to devolution being a party political trick-which has backfired spectacularly, Bogdanor op. cit. 110
[8] Bogdanor op. cit.
[9] The Smith Commission, 2014: 9
[10] Ibid. 13
[11] UK Governmental Analysis for the Smith Commission: 2
[12] Report’s original bold highlighting
[13] Implications: 16
[14] Bogdanor 2014, Guardian, ‘Why English Votes for English Laws is a Kneejerk Absurdity’
[15] Ibid.
[16] Ibid.

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