Monday, 2 September 2013

Where Next? Devolution, localism, and the key to securing Britain after 2014

Scottish Nationalists like to ask British Unionists; “What can you offer us other than the status quo?” Better Together says it would like to offer the devolution of more powers to the Scottish Parliament after a No vote in 2014. Now even senior Conservative MPs are suggesting constitutional reform: the Tory vice-chairman Michael Fabricant yesterday suggested a new Act of Union to bring “proper symmetry between all the four nations.” I too would offer more devolution.

I believe the devolved parliaments have done great things. I myself am currently a benefactor of Holyrood’s refusal to introduce university tuition fees in Scotland. As in federal states like Germany or the United States, devolved power allows for a more responsive government that can more effectively focus on issues of local concern, notably in Scotland’s case healthcare and education. As in America, the federal structure allows areas with devolved power to act as “policy laboratories” – the smoking ban is a notable example of this, being introduced first in Scotland, and when shown to be a success, introduced UK-wide.

Yet is this an argument for more powers to the devolved assemblies – “Devo-Max” as it has been called? Not necessarily. Exactly what Devo-Max entails has not been fully explained, but there is a general assumption that it will entail some form of transfer of tax-varying powers from Westminster to the Scottish Parliament. I do not believe this should be allowed to happen: that the Scottish Parliament should gain tax-varying powers while Wales, Northern Ireland, and the regions of England still operate under a unified policy is fundamentally unfair. Nationalists claim that this is not a “Union of Equals”, but this proposal will only succeed in increasing the inequality. Economists and politicians have warned of a “race to the bottom” between Scotland and the rest of Britain – that the two parts would cut corporation tax rates more and more to attract business. This is bad for business as companies will not know where to go or how much to pay; bad for the government, as if one keeps cutting taxes to attract business or increase economic growth, one will eventually become a victim of the law of diminishing returns; and bad for the people on both sides of the border, as vital businesses and industries move out to where the tax is lower. Potentially, the compliance burden for businesses on both sides of the border would be duplicated for each side’s taxes. Furthermore, the Scotland Office estimates that the tax compliance costs for Scottish businesses could double to more than £1 billion if a separate Scottish tax system was introduced. So, in the name of fairness and efficiency, Westminster should not bow to Scottish demands for tax-varying powers, but then the Nationalist parties could legitimately make the argument that London is seeking to keep the Scots down and refuses to give them what they want.

Furthermore, the process of federalism and devolution in Britain is incomplete. England does not possess its own devolved assembly, and while many compelling arguments exist for and against the creation of such an assembly, the West Lothian Question remains unresolved. The most notable and most unfortunate example of this came in 2003, when New Labour pushed an increase in university tuition fees in England through Parliament with the votes of its Scottish MPs, in spite of the fact that their constituents would be completely unaffected by the fees increase, education being a devolved matter.

The West Lothian Question is indeed a compelling argument for a devolved English Parliament. An equally compelling argument against such a Parliament is that England is too big for such devolution and an English First Minister would rapidly overshadow the British Prime Minister on the international stage. An argument can be made for devolving power to the regions of England, and New Labour in fact legislated for referendums on such devolution in 2004. However, the decisive rejection of a regional assembly for the North East, despite (or perhaps because of) the support of John Prescott, has put such plans on hold indefinitely.

Thus we are at an impasse. England is too large for its own Parliament, yet regional devolution has been rejected for reasons I will discuss in a moment. To solve the West Lothian Question, it has been suggested that legislation pertaining to England only should be referred to an English Grand Committee in Parliament, a good argument, but one that does not provide any more responsive government than in the current arrangement in England. Furthermore, the devolution of further fiscal powers to Scotland is inefficient and fundamentally unfair to the rest of Britain, but failure to do so could lead to Nationalists making the argument that Westminster is holding back Scotland and leaving it unable to fulfil its aspirations, making independence the only way forward.

My own belief is that the regional assemblies were rejected because people have no sense of identification with the regions. While Scots and Welsh identify heavily with their countries, just as the English do, there are no comparable levels of identification among people in the North East with their region, particularly since it lacks a proper name beyond a dreary geographic identifier. And yet, when one asks where a person is from, they will far more often say; “I’m from Glasgow”, or “I’m from Newcastle” than they will say “I’m from Scotland” or “I’m from England” (and even more often than “I’m from the North East”). Additionally, English people identify far more with the traditional counties of England than they do with regions.

I believe, therefore, that the solution lies in localism. I said at the beginning on this blog that I would offer more devolution. I would indeed devolve more powers, but not to the Scottish Parliament or Welsh Assembly, or even to an English Parliament. I said earlier that people identify far more with their towns, cities and counties than their regions, and here lies, I think, the solution.

What I suggest is that all the powers currently held by the devolved Scottish and Welsh assemblies be devolved even further to the lowest practical level of government. Thus, town, city, county, or borough councils get to be responsible for health policy, agriculture policy, education policy, and all other powers that they can practically exercise. The devolved assemblies currently do not control welfare policy, but I see no reason why that particular power could not be extended as well. They would even be able set their own council tax rates.

Certain minimum standards for, for example, healthcare and education would of course be set by the ministries in the central government in London. Barring certain extreme cases of incompetence, corruption or emergency that would require intervention, however, the devolved county and town assemblies would otherwise be left alone.

While this may seem impractical, we do have to remember that the councils have been administering the health and education systems and executing government policy from Westminster in their areas for years. Thus, they already have the administrative structures in place to take over policy from Westminster. One of the reasons that Scottish devolution was such as smooth process was that prior to 1997, there was already a large degree of “administrative devolution” through the Scotland Office. Much the same arrangement exists today in the councils.

I see council devolution as an excellent solution for a number of reasons: Firstly, power is moved much closer to the people: if people in a county or town are annoyed by, for example, a hospital closure or other changes the health service there, I think they stand a far greater chance of getting their council to change policy than if they had to take their complaint to Westminster or even Holyrood.

Secondly, it allows for services to be tailored for the needs of a smaller community. Vital services like benefits and the NHS are taken out of the hands of the Westminster, meaning that the main parties no longer get to use them as political footballs at elections. Such politicking over the NHS has created a huge degree of uncertainty in our most vital service. Removing these responsibilities from London will also likely free up a great deal of money and resources, which links well with the current obsession with reducing government waste, and also allowing the government to spend more time debating matters of high politics, something I believe has been neglected in Britain in recent decades.

We must, of course, consider that fate of the Scottish Parliament and the Welsh Assembly under this new devolved arrangement. With their powers now devolved to the local councils, the Scottish Parliament and Welsh Assembly will become unnecessary and expensive layers of government that the councils simply won’t listen to if their policies don’t benefit their people. Ultimately, it will mean that the only real thing the devolved parliaments will have left to do is dissolve themselves. A sad fate, certainly, particularly for the Scottish Parliament, which has only existed for slightly over a decade after its three hundred-year hiatus, but I believe that the loss of the parliaments is a small price to pay for a reform that will make the entire country more democratic, and policy-making more responsive to the people.

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