Blueprint for Britain How should the UK run itself? PROSPECT 2016 2 How should Britain run itself? e launched our Blueprint for Britain series nate the post-election political landscape, of which powers Brit- to discuss—and answer—the questions raised ain should itself share with the EU. by the Scottish independence referendum. These are our conclusions. Even though more than a year has passed, David Cameron, Nick Clegg and Ed Miliband prom- and a general election has changed the ised Scotland new powers before the referendum, a hur- Wcomplexion of the House of Commons, those questions will not ried pledge dubbed “the vow.” The government created the go away. new cross-party Smith Commission in September 2014 to They are, at heart, the question of how Britain should now consider what those powers should be; in November of that run itself. The answer “exactly as it has done until now” no longer year, it published its report setting out the “heads of agree- seems possible. These constitutional questions have been given ment” on further devolution, and in January, the govern- life by the promises made by party leaders of new powers for ment published a Command Paper of draft clauses aiming Scotland—and the continuing strength of the Scottish National to take those conclusions further forward. But Nicola Stur- Party support since the referendum. David Cameron, stand- geon, Scotland’s First Minister, called the outline of new pow- ing in Downing Street on 19th September after the “No” victory ers disappointing. In her view, the Scottish Parliament’s room was clear, made ambitious commitments that extend beyond the for manoeuvre, particularly in the area of welfare policy, is pledges to Edinburgh: more power to the regions; a financial set- not significantly enhanced by the draft legislation announced tlement that is “fair to Scotland” but fair to other regions too; in January. more power to cities. In the same month, parties in the Scottish Parliament drew up Meanwhile, London’s exceptionalism—its role as a centre of a list of six areas where they thought new powers were due: terms global finance, its property boom and housing crisis, its size and of fixed-odds betting terminals; regulation of farming; votes for wealth, create further questions about how the United Kingdom’s 16- and 17-year-olds; stewardship of the Crown Estate; control resources should be shared and how much regions should keep of fracking licences; the Work Programme designed to encour- themselves. age employment. But in mid-March, the Commons Political and So does the complexity of Britain’s population: multi-cul- Constitutional Reform Committee described the draft clauses in tural, with high immigration, and growing fast. The UK is an the government’s Command Paper, particularly the proposal to increasingly complex society, projected soon to have the largest make the Scottish government and parliament “permanent insti- population in Europe, with one of the most successful western tutions,” as “a bit of a guddle.” Extension of the powers granted economies, and yet disparities of income and wealth—and out- to the Scottish Parliament in any legislation is also likely to be a right clashes of interest and sense of identity—between social central part of the SNP’s platform for the parliamentary elections groups and regions. in Scotland in 2016. (The party will also have to defend its record Britain has seemed for years one of the most stable countries in government, and here, as John McDermott showed in the June in the European Union, but is showing itself capable of contem- issue of Prospect, its performance has been mixed.) plating radical change in the way that it governs itself. A national The tussle over Scottish powers has left unclear the question of propensity to fudge and muddle through, often praised as “Brit- “English votes for English laws.” This surfaced with passion just ish pragmatism,” will come in handy in finding an answer, but is after the referendum, when voters south of the border reacted no longer enough. with indignation to the notion that Scottish MPs at Westminster would continue to vote on matters relating only to England, but To answer these questions, Prospect set up a panel of consti- English MPs could not do so in Scotland. tutional experts, politicians and those with a wider interest in A government paper on the implications of devolution for the outcome. England, published in December, put forward four options for • What powers should Scotland have? ensuring “English votes for English laws,” including a proposal • How should political power be shared between Westminster, to change parliamentary procedure in order to enable English the regions and the cities? How should the money be shared MPs—but not Scottish ones—to scrutinise bills relating to Eng- out—including the wealth generated by London and other land in what amounts to an extra committee stage. This is broadly cities? in line with what Jim Gallagher, who was the UK government’s • How should Wales and Northern Ireland, the poorest areas, be Director-General for Devolution until 2010, recommended in our protected? November 2014 issue. • Should the House of Lords now be reformed, as part of the This is a move that Prospect supports, although it creates its answer to regional representation? own complexities, as Vernon Bogdanor noted in our roundtable • Does the House of Commons need to be cut down to size? discussion in November. He argued that the dominance of Behind those questions looms the one that looks set to domi- England within a union of regions would render a federal system PROSPECT 2016 HOW SHOULD BRITAIN RUN ITSELF? 3 unworkable. That is too rigid an interpretation of how it might fashioned to encompass his plans for helping Manchester and work, however. For a vision of more flexibility, look at David Mar- for linking northern cities more widely, he not only allocated new quand’s argument in the June 2014 issue of Prospect: “A federal funds for transport but allowed Manchester to keep 100 per cent United Kingdom with four states, one of them much more popu- of new business taxes raised. This extends the new powers given lous than the other three, would be an oddity. But it would reflect to Manchester last year under the terms of its “City Deal.” These the odd history which has made this country what it is. If the peo- include “Earn Back,” a scheme that offers incentives to “invest ple and political classes of the United Kingdom want to make it in growth,” principally in infrastructure, in return for a share of work, they will. If they don’t, break-up is inevitable.” national tax revenues. The greatest problem, however, is in defining which mat- We can expect more of the same—and cities, or city-regions, ters should be considered “English-only.” As everyone illus- are right to clamour for it. In 2013, Boris Johnson, as Mayor of trated at the roundtable, to general comedy of a Yes Minister London, called for the capital to be allowed to keep the £1.3bn it type, essentially every issue can be defined as containing an ele- raised the previous year through stamp duty on property sales. ment of finance, and therefore relevant to the union. Bogdanor, Yet the London example illustrates the problem with greater in his response to Jim Gallagher in the December 2014 issue of devolution of funding. By definition, if cities or regions have more power to raise their own money, there is less to distribute from the “The greatest problem is in centre. This is one of the shortcomings of devolution; it weakens the ability to redistribute the wealth of the country. Poorer regions defining which matters should or cities are in danger of losing out. They are not clamouring for change, it is clear. be considered ‘English-only’” A second, serious concern with handing powers back to local areas is the risk of corruption or negligence. The exam- Prospect, pointed out that “even if all control of income tax were ple of Rotherham and other local authorities which failed to devolved to Scotland, the bulk of Holyrood’s revenue would still respond adequately to reports of extensive child abuse, or come from Westminster. This means that any variation in spend- the case of concerns about Birmingham schools, makes the ing on an English service such as health would have a knock-on point: some kind of national supervision and accountability effect in England.” remains crucial. The attempt is worth making, however. It reflects the impulse to devolve decisions to a lower level. That is worth doing. The UK ur roundtable in November 2014 on whether the has the most centralised government among the big western Barnett formula needs to be withdrawn stumbled democracies and it has become steadily more so since the First almost to a halt on this point. The formula—never World War. No other advanced democracy runs itself in that way. intended to be permanent, as its creator, Joel Bar- It is appropriate that the UK finds a way to share out the power Onett, drily pointed out at the outset in 1978 (see John McTernan that currently resides in Westminster. p11)—sets out the share of public spending that Scotland, Eng- It is likely—and in tune with the historic evolution of Britain’s land, Wales and Northern Ireland will get. Northern Ireland constitutional arrangements—that this may take place in a messy has been privileged in this formula because of the consensus patchwork. Pace Bogdanor, this is fine. on the need for public investment after the years of violence.