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The Unionist way forward

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Photo: ALAMY During the Scottish referendum campaign, in a moment of panic (justified or otherwise), the Prime Minister and others agreed a rapid timetable for additional devolution of powers to the Scottish Parliament and Executive. The morning afte...

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The Unionist way forward

Photo: ALAMY

During the Scottish referendum campaign, in a moment of panic (justified or otherwise), the Prime Minister and others agreed a rapid timetable for additional devolution of powers to the Scottish Parliament and Executive. The morning after victory, the Prime Minister announced that, in tandem, there would be a broader set of constitutional reforms to tackle the notorious “West Lothian Question”. His English votes on English measures proposals face attacks from three sides – from those favouring a full-blown English Parliament; those favouring devolution at a lower level within England, to regions and cities; and those (particularly in the Labour Party) who believe there may not be any need (or if there is a need, no hurry) to introduce restrictions on Scottish MPs from voting on measures predominantly affecting England.

The Conservative Party must now choose whether it is fundamentally a Unionist party or an English Nationalist party. It's current policy constitutes effectively a renunciation of the Union. Something has to give.

The English Nationalist view would be that England is a country like Scotland and Wales and Northern Ireland, and that if the other countries of the United Kingdom are to have devolved powers that must apply to England too – whether via an English Parliament or English votes on English measures for Westminster MPs.

The Unionist position, by contrast, ranks the unity and integrity of the United Kingdom above the unity and integrity of any individual component of the United Kingdom. Because the English population constitutes more than four fifths of the UK population as a whole, an English Parliament (whether in the form of a separate entity or a Grand Committee of English House of Commons MPs voting on English-only laws) would have almost all the relevant powers and influence of the United Kingdom as a whole. Such an arrangement would de facto replace the Union as one country with a collaborative confederation of four largely separate countries, with that federation dominated by one country – England. In the case of the Grand Committee option, it would effectively make it impossible ever subsequently to have a Prime Minister of the Commons coming from anywhere other than England.

The Unionist cannot accept that. In my view (and this has been my view ever since the Welsh Assembly was first agreed) the Unionist position must have four elements:

The rejection of dominance — The Unionist, regarding Britain as one entity, must reject the idea that any region should dominate in influence or affluence. The governance units in any new arrangement must be of broadly the same order of magnitude.

The rejection of federalism — We should conceive of whatever new arrangement arises for the Union as a form of regional governance. There is no passing of fundamental sovereignty to “states” or “statelets” of the Union. Sovereignty must remain with the Crown in Parliament. Governance through regional assemblies or “parliaments” should be understood as a scaling up and deepening of local government via county councils or regional authorities, not a passing down of sovereignty from Parliament to federal units. One implication of this is that there is no need for any "constitutional convention" or "written constitution" setting the relationships involved; neither is there any need to consider questions such as the role of the House of Lords. These assemblies are just a grand-scale form of local government – nothing more.

The rejection of permanence — Like any form of non-sovereign local government, future reforms might change things considerably, reorganising boundaries or relevant subdivisions. And responsibility for how such governance works must remain with the Crown-in-Parliament. The most important part of Cameron’s promises of further devolution to Scotland that must be repudiated (for he made no promises in my name or after having secured any agreement from the Conservative Party, let alone the country) is that the Scottish Parliament should be made “permanent”. Scots voted No to independence, not yes, so they rejected the idea that Scotland should become a separate state with full individual sovereignty.

The “if one suffers, we all suffer” principle — The argument for additional governance layers, from the Unionist perspective, is nothing to do with the intrinsic merits of governance by that means. Many folks are taking this opportunity to push their own preferred forms of local government. But arguments about whether regional or big city assemblies are a good form of government are irrelevant. I believe assemblies and “parliaments” are manifestly a bad form of government. But as a Unionist, my belief is that we must have common forms of governance throughout the Union. So if two components of England-and-Wales, say, are going to have assemblies (Wales and London), then we all must suffer that way of doing things for a while. I would hope that, in fifty years or whatever, we shall all come to our senses, see what a daft way of doing things this is, and in due course abolish the whole of them. But in the meantime we are where we are and must make the best of it.

Bearing these principles in mind, it appears to me that the Unionist way forward must be as follows.

– We should have, throughout England and Wales, a series of regional and city assemblies that is each of a similar population scale to those in Wales, Scotland and London — i.e. perhaps between four and eight million persons each. That means somewhere between six and ten additional regional assemblies. I note that it also means additional devolution of powers to counties or small cities is of no use here. We need all the assemblies to be of approximately the same size.

– These assemblies should have powers to set income taxes in particular, along with a range of other taxes such as stamp duty on house purchases, social insurance (a regionally-based form of National Insurance, probably taking the form of a Health Insurance, a Pension Contribution, an Unemployment Insurance, Sickness Insurance, etc), and others. They should have powers to spend money on health, education and the police. They should have no powers to raise debt. They may have powers to set certain civil law matters that were local in nature, along with local implementations of health and safety rules and some aspects of business regulation. They may have some powers relating to corporate taxes on business activities that were local in nature. They should receive VAT revenues though the levels would be set nationally.

– There should be a Parliament in Westminster, almost identical to that now – in particular elected with MPs from all areas of the Union having the same voting rights. That Parliament would have responsibility for defence, cross-regional policing, trade, trans-regional transport networks, trans-regional energy networks, interaction with international bodies such as the EU, criminal laws, civil laws such as they related to cross-regional or national activities, competition laws, minimum health and safety standards, minimum national regulatory standards, foreign policy, and other such matters.

– The Westminster Parliament would fund its activities and departments via taxes on transport (e.g. fuel duty, air passenger duty), excise duties, tariff income, duties on corporate activities that were national in nature, royalties on Crown claims such as minerals (e.g. oil revenues – though I note that, arguably, Scottish oil revenues should be formally regarded as accruing to the Scottish Crown), and certain other activities that were national or cross-regional in nature. The Westminster Parliament would also be responsible for all debt raising.

– In addition to the above, the Westminster Parliament would set, each year, a portion of each region’s GDP that it would have to set aside in taxes, to be placed into a common pot. The Westminster Parliament would then consider whether to supplement that pot via debt-raising or repay debt using some of the funds in that pot (along with servicing debt from Westminster’s other revenue streams). The revised pot, after new debt-raising and debt repayment, would then be allocated by the Westminster Parliament to the regional assemblies as into-region transfers. That should not be done via any automatic formula. There should instead be an explicit vote each year on the allocation of regional funds. (So another element of Cameron’s personal promises to Scotland – again, not in my name – that should be repudiated is the idea that the Barnett formula will be retained. That is not because Scotland should necessarily receive less than the Barnett formula – it might well receive more, sometimes. It is because regional transfers should be explicitly agreed in the new system of much greater regional expenditure autonomy.)

– Westminster should be responsible for the funding of (or securing from the private sector or otherwise of funds for) inter-regional or national transport networks (e.g. motorways, railways, airports). Westminster should have powers to engage in other forms of discretionary capital projects within particular regions. For example, Westminster might want to establish and build a military school in a particular area. That should be its prerogative and cost, not the responsibility of the regional authority.

Note that I am not assuming that the regions must correspond to existing regions. At this stage, as far as I'm concerned, Wessex, Kent, Mercia, East Anglia, Northumbria and Cumbria could be the regions.

Such an arrangement could be made to work, while retaining the essential character of Westminster politics and the integrity of the Union. It would neuter some of the centrifugal forces created by Labour’s half-baked devolution — forces that would be greatly amplified by either an English Parliament or an English MPs Grand Committee on English Laws. No one would assume that a Cumbrian Assembly leader were the prime minister of a country. They would therefore quickly cease to ascribe the same significance to the officers of the Welsh Assembly and government. In due course, they might even undermine some of the sense of difference of the Scottish arrangements (though of course Scotland was different – with its own laws and Crown – even before devolution, so there should be no aspiration to destroy, altogether, the sense that Scotland is a country unto itself – it always has been). That would be highly desirable – in fact, almost the main point of the whole arrangement. I consider it highly unfortunate that the media allowed a contrast between the "Scottish government" and the "Westminster government". There is ultimately one government of the UK – and Scotland has chosen to continue to be ruled via it.

The above sketch seems to me to be the Unionist path. The Conservative Party now faces the great dilemma: does it want, fundamentally, to be a party for the English or a party for the Union? Cameron's current proposals may have many merits, but Unionist they are certainly not.

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Andrew Lilico
Dr Andrew Lilico is Executive Director and Principal of Europe Economics. He is a Fellow of the Institute of Economic Affairs and Chairman of the IEA/Sunday Times Monetary Policy Committee.

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