A federal future for the UK

Reproduced from Future UK and Scotland

The United Kingdom has set up federal systems across the world but has been reluctant to embrace the principle itself, whether in relation to its constituent nations or to Europe. In the latter context, indeed, it has remained the ‘f-word’. Now almost everyone is talking about federalism as a new way of approaching the Scottish issue, a third way between devolution and independence, and as a device for fitting the United Kingdom together as a whole. As usual, when so many people agree on an idea, however, they do not agree on its meaning.

Federalism has both a specific, narrow meaning and a broader one. In the specific sense it refers to a set on institutions providing for the division of power between two orders of government, each of which has guaranteed status and competences. There are mechanisms for linking them and introducing a territorial element at the centre, via a second chamber representing the federal units, or intergovernmental councils or conferences. There is usually some principle for sharing resources, known technically as fiscal equalization.

In this sense, federalism would not work in the United Kingdom, although it did have its advocates a hundred years ago, in the form of ‘home rule all round’. England is far too big and there is no system in the world in which one federal unit has 85 per cent of the population. An English government could hardly live together with the UK government, since the former would have vastly more power and resources, which is not usual in federal systems. Nor is there any serious demand in England for federalism. An alternative sometimes canvassed is to divide England into regions but no versions of this proposal envisage them having the same powers as the Scottish Parliament or indeed any legislative powers at all. The last effort to regionalize England in 2004 was massively rejected in a referendum in the first place it was proposed, the North East. There is talk currently of city-regions, not a new idea but a revival in attenuated form of the metropolitan counties that existed between 1974 and 1986 but this has nothing to do this federalism. These are administrative units mainly concerned with infrastructure investment and talk in the media and among regional politicians of Scottish-style devolution is wide of the mark.

Federalism in the broader sense refers to a way of thinking rather than institutions. It is about the principle of dividing power and ending the monopoly of the centre. This implies both territorial decentralization and reform of central government to enhance the role of the territories. It also encompasses the idea of allocating resources according to some agreed principles. In the UK, we do not yet have this federal spirit. Whitehall and Westminster have hardly changed at all as a result of devolution. The Treasury remains immensely powerful and insensitive to territorial differences. The Labour and Conservative parties are not federal in their own structures and ways of working.

A UK operating in the federal spirit would not provide a solution to the West Lothian Question or complaints about the Barnett Formula, but would help in thinking these matters through. UK federalism would necessarily be asymmetrical, as devolution is, allowing different parts of the union to develop their own institutions according to local needs. If England does not want its own parliament but is concerned about Scottish MPs voting on purely English matters, some version of English votes for English laws (now known as EVEL) could be devised. If people in England want decentralization within England, this can be addressed even though it does not give them the same as Scotland. There will never be agreement on how to divide up resources but something more principled than the Barnett Formula could be devised. Above all, the federal spirit would curtain the power of the centre and rein in the grasp of the Treasury.

Such a spirit could spread to the European level, if UK politicians could accept that the European Union is, in the broad sense, based on federal principles. Scotland, Wales and Northern Ireland, in turn, could develop their own links into Europe, as they are already doing. They would also have a say in developing UK policy in Europe and the UK’s stance in regard to Europe as a whole. There is even less sign of this thinking in Whitehall and Westminster, where all the parties seem determined to assert old-fashioned parliamentary supremacy. It is, moreover, those elements in UK politics who are most hostile to federalism within the UK who are most resistant to Europe.

UK says review of EU shows bloc must relinquish power ‘in many areas’

The European Union must relinquish power “in many areas” in favour of member states, British Foreign Secretary Philip Hammond said on Thursday, announcing the end of a two year review of his country’s relations with the bloc.

Prime Minister David Cameron has promised to renegotiate Britain’s ties with the EU to try to claw back powers to London from Brussels before holding a membership referendum in 2017 if he wins a national election next year.

Publishing the final reports in a civil service investigation into how the EU affects British life in 32 areas from health to immigration, Hammond said the review had found the 28-nation bloc needed to reform itself to be more open, competitive, flexible and democratically accountable.

“They underline the need for the EU to focus on those areas where it genuinely adds value,” said Hammond, a possible leadership contender for the Conservative party who has said Britain must be prepared to exit the EU if it can’t overhaul it.

“There are many areas where action can and should be taken in member states rather than at the EU level,” he said, saying the reports provided further evidence of the need for a change in Britain’s relationship with the EU.

via UK says review of EU shows bloc must relinquish power ‘in many areas’ | Reuters.

Whilst the EU has many far-reaching powers, Member State governments like to take credit for the good that comes from the EU, whilst bashing what their current political affiliation views as bad.

The answer to an EU that speaks with a voice that all of it’s members can stand by: Federalism, true democracy in a Europe that appears to have a large number of disenfranchised voters.

Learn more about the aspirations for a Federal Europe at the Federalist Party and the Federal Union UK

Conservative MSP calls for a federal UK

Conservative MSP Murdo Fraser is expected to call for a federal UK in a speech at Glasgow University.

Mr Fraser will say that a federal option could create “common ground” between supporters and opponents of Scottish independence.

His proposals include a written constitution and replacing the House of Lords with a senate to represent the federated areas of the UK.

SNP MSP Stuart McMillan called the proposals “pie in the sky”.

Murdo Fraser has a reputation for radical thinking in the Conservative party.

He lost out on the Tory leadership in 2011 having argued for the Scottish party to breakaway from the UK Conservatives.

The MSP is now turning his attention to redesigning the UK if there’s a “No” vote in the independence referendum.

He believes a federal UK could be an “alternative” to independence that would unite many nationalists and unionists.

Mr Fraser acknowledges that England has shown little appetite for regional government but argues this may change as Holyrood gains new powers.

The SNP said his proposals were “pie in the sky” because they do not represent official Conservative party policy.

The Yes Scotland campaign said only independence would guarantee the powers it believes Holyrood needs.

He said the changes Mr Fraser was advocating were “simply not on the table” and the “No” campaign parties had “completely failed to reach any common position on more powers for Scotland”.

Mr Fraser, the Scottish Conservatives’ spokesman on enterprise, energy and tourism and a former deputy leader of the party, will give a lecture organised by the think tank Reform Scotland.

‘Common ground’

He is expected to say: “A referendum with a binary Yes/No question was always bound to polarise opinion.

“But is there really no common ground between these two different stances? Is there no alternative around which a substantial majority of the Scottish people could coalesce?

“I would suggest that federalism within the UK, if it were workable and could be achieved, is a solution which could unite both unionists, and many nationalists, and provide a secure framework for the future.”

Mr Fraser will argue that federalism for Scotland, Wales and Northern Ireland would be “comparatively straightforward” as the three nations have devolved administrations.

He will call for devolution to English regions, giving the example of the creation of the London Assembly and an elected mayor for the city.

Conservative leader Ruth Davidson outlined her party’s devolution proposals earlier this month

Mr Fraser’s comments go further than his party’s devolution proposals, which would give the Scottish Parliament additional responsibility over VAT, income tax and welfare if voters reject independence in the referendum in September.

The option of federalism or further devolution will not be put to referendum voters, who will be asked the Yes/No question: “Should Scotland be an independent country?”

‘Full powers’

Mr McMillan, from the SNP, said: “The ‘No’ campaign parties accepting that Scotland needs more powers is galvanising the ‘Yes’ vote.

“Scotland needs the full economic and welfare powers of independence, which only a ‘Yes’ vote can deliver, and barely a third of people trust Westminster to deliver anything. That is why a ‘Yes’ vote is so important.”

He added: “In an independent Scotland we will get the government we vote for every time, instead of Tory governments we reject – as well as saving taxpayers some £50m per year by getting rid of the Westminster tier in Scotland.”

via BBC News – Scottish independence: Conservative MSP calls for a federal UK.

 

A federal UK? Home Rule all round? We have been here before.

There are fewer truly new things in politics than you think. The present constitutional uncertainty – which, it should be said, could scarcely have been avoided – is no exception. We have been here before, all of us, even if we choose to forget our previous gallops around this track.

A century ago – on September 18th, to be precise – a bill for Irish Home Rule was finally passed. It had taken three attempts and nearly 30 years but it was passed at last. There would, once again, be an Irish parliament.

Or there would have been had it not been for the Kaiser’s War. The guns of August delayed Home Rule; Easter 1916 (and, especially, the response to Padraig Pearse’s mad provocation) killed it. Nothing would recover; nothing would be quite the same again.

Nevertheless, it is useful to recall just how similar many of the arguments over Irish Home Rule are to those we hear now about the future governance of these islands.

Here, for instance, is Herbert Asquith addressing the future entitlement of Irish MPs to sit at Westminster:

[W]hatever other changes may be made, and however far the devolution of local affairs to local bodies may be carried, the House of Commons must continue to be the House of Commons of the United Kingdom, fairly representing all its constituent parts and inviting the cooperation of each of them in the supervision of their common interests, the transaction of their common business, and the discharge of their joint and corporate trust to the Empire as a whole. It is true that for a time, and until there are further applications of the principle of devolution, Irish Members will be here with an unfettered right to vote. For the reasons I have already given, a very substantial reduction in their number makes that a matter of much less practical importance than it was, and we think it may well be found to be the duty of the House of Commons—after this Bill has become the law of the land—the duty of the House of Commons, which is absolute master of its own procedure, to anticipate in some degree further developments of statutory devolution by so moulding its own Standing Orders as to secure the effective consideration and discussion of legislation affecting only one part of the United Kingdom, by those who, as representing that part, are alone directly interested.

As you can see, the West Lothian Question was preceded by what one might deem the West Meath Question. Perhaps, in time, something like an English Grand Committee would be needed. Note, too, however, that reducing Irish representation from more than 100 members to just 42 would necessarily make it vastly less probable that these MPs could make a decisive difference to the governance of the nation. In similar fashion, and subject to the new Scotland Bill transferring significant responsibilities to Holyrood, a reduction in the number of Scottish MPs sent south may not iron out the constitutional anomaly but it renders its impact less substantial. Besides, nothing straight was ever made from the crooked timber of the British constitution. English votes for English laws is, in any case, as the historian Tom Holland quipped, an issue of great importance for the kind of people outraged by the sorry lack of an International Men’s Day.

Other concerns seem just as fresh. The Barnett Formula – nearly 40 years old and plainly in need of recalibration – was itself an adjustment to the Goschen Formula introduced in the late 19th century. Never let it be said that we move too hastily on these matters. As Asquith, again, noted:

When a grant is made to England, Scotland and Ireland at once step in and claim an equivalent whether they need it or not. […] It is in no-one’s interests to be economical and, on the other hand, it is to everyone’s interest to make fresh and growing demands upon the Imperial Exchequer.

Well, indeed. But hark too at what Edward Carson, the great bulwark of Ulster Unionism, had to say:

What is the object of the United Kingdom? As I understand it, it is that all parts of that Kingdom should be worked together as one whole; under one system, and with the object that the poorer may be helped by the richer, and the richer may be the stronger by the co-operation of the poorer. If you were to take certain counties in England at the present moment—I shall not name any, as it might seem invidious—and work out what their contribution to the United Kingdom is, you will find that many of them do not pay for their upkeep. Is that a reason that they should be deprived of that upkeep? No; and I say this further, that a worse, a more foolish, and a more impossible policy it would be impossible to inaugurate than to suggest that either Ireland, or any other part of the United Kingdom, whether large or small, should be allowed to go back in the race of progress, and civilisation, and not to be kept up to the same standard as you yourselves, or as near thereto as possible. The whole of this argument is based upon a fallacy, because the moment you make a common Exchequer you have no right to segregate any unit paying into that Exchequer towards local or Imperial upkeep. As Ireland pays exactly the same taxes as Great Britain pays, you have no right whatsoever to segregate her.

Again, this is strikingly familiar is it not? So is this:

Does the right hon. Gentleman really tell this House that he is going to have Home Rule all round? Does he say that until the other Constitutions are completed the Irish Members are to be here dealing with the local affairs of England and Scotland, and England and Scotland are to have nothing to say about the local affairs of Ireland? No. If you were in earnest you would have these schemes, whether brought in in one Bill or three all operating together. I will put it to the test. I will ask the right hon. Gentleman a question which will test his sincerity upon the subject. Will he agree to hang up this Bill until he has framed the others? Of course he will not. Do hon. Members think he would be allowed? The truth of the matter is that all this is simple hypocrisy. When you are granting to Ireland this system, which is said to be part of the federal system, there is really behind it a much deeper matter than the right hon. Gentleman has dealt with. Before you can grant a federal system at all you must make up your mind as to what is the demand, the real demand, of Ireland.

[…] Just picture what you are setting up. Do picture it in relation to the complicated system of taxation you are setting up, and which I venture to think will not last six months, and try to realise what it is that will then happen. Just think of the Irish Chancellor of the Exchequer bringing in his Budget and explaining to an Irish House of Commons mainly composed of agricultural Members that it is necessary to raise more money, and that it must come from the land, or if he had the power, which he never will have, from the industries of Ulster. What will be his argument? He would tell the Irish House of Commons, “This is a very bad system; you have got your instalments to pay to that brutal English Government; they have reserved that to themselves. You have got a great many other taxes to pay, but the one thing we are not allowed to set up is a system of taxation which we know and believe would be best for our own country. We cannot help it. It is the brutal English Government that has done this.”

As I say, there are fewer truly new things than we think. And what of feeding the nationalist beast? Well, here’s John Redmond speaking in the same 1912 debate:

[In the] circumstances of this case, the onus undoubtedly lies upon those who argue that what has proved to be good and just everywhere else in the world is bad and unjust and mischievous in Ireland. What are the main arguments against the principle of self-government for Ireland? The first of them is the question of separation, and Unionist orators, especially in the country—I notice more in the country than in this House, where they are face to face with their opponents—have constantly been saying that the Irish people want separation, and that the Irish leaders are separatists. I will be perfectly frank on this matter. There always have been, and there is to-day, a certain section of Irishmen who would like to see separation from this country. They are a small, a very small section. They were once a large section. They are a very small section, but these men who hold these views at this moment only desire separation as an alternative to the present system, and if you change the present system and give into the hands of Irishmen the management of purely Irish affairs even that small feeling in favour of separation will disappear, and, if it survive at all, I would like to know how under those circumstances it would be stronger or more powerful for mischief than at the present moment.

That might, it is true, have proved wishful thinking. Nevertheless it is another example of how today’s Scottish debate is in many respects a refreshment of the Irish argument from a century ago.

We cannot, as I wrote in the Scottish edition of The Times this week, know if the Asquith-Redmond Home Rule bill would have lasted. There are grounds for thinking it would not, not least because of the Ulster complications. Nevertheless, it might have and, more importantly, the fact it was passed at all should remind us that our own constitutional affairs can be resolved.

Of course it is more complicated now. Government has grown since 1912 and its tentacles now extend to places unimaginable a century ago. Cleaving Scotland – and Scottish finances – from the rest of the UK is not so simple as liberating Ireland a century ago. And it was a complicated enough business back then. For instance pensions, reserved to Westminster then, are an even greater issue now. Ditto the wider provision of welfare. That’s one reason why the new Scotland bill will not, in some areas, go as far as the Asquith-Redmond Irish Home Rule bill. The unravelling is a more perilous business these days.

Still, Ireland offers an example and, perhaps, a warning. To members and supporters of all parties. We have, after all, been here before.

All Lib Dems must campaign for a Federal UK

By Ross Finnie, Wed 21st March 2012

I have always supported Home Rule, involving a new constitutional settlement giving equal status to England, Scotland, Wales and Northern Ireland and thereafter each nation would promote what each considered to be the most appropriate governance arrangements within a federal state. For Scotland that meant not just the establishment of a Scottish Parliament but the transfer of the maximum amount of legislative, administrative and financial powers consonant with being a nation within a federal state.

Like most Scottish Liberals, I supported the Party’s policy position as set out in Jenny Robinson’s 1976 pamphlet: Scottish Self-Government. I was one of the overwhelming majority who voted for the motion passed at the 1982 Conference in St Andrews calling for ” … the establishment of a Scottish Parliament, elected by proportional representation, within a Federal United Kingdom … “

I believe federal Home Rule offers the most logical basis for: modernising the UK’s antiquated and inadequate constitutional arrangements and thereby providing a stable platform for the future of the UK; giving equivalence of status amongst Scotland; England, Wales and Northern Ireland; allowing the respective nations to determine their own governance arrangements in a federal structure; and allowing each nation to have economic and fiscal powers consonant with that federal structure

There is an urgent need for there to be a new written constitution that recognises the geographic and cultural diversity of the nations of the United Kingdom As Murray Leith says in his chapter in The Little Yellow Book: “Simply put, the lack of a written constitution is a problem that the UK has not addressed, and it is one that the country must consider if it is to survive as a political entity in the 21st Century. “

Our Liberal Democrat colleagues, across the UK, need to be fully engaged in the process and to understand that, in the Independence referendum debate, Liberal Democrats must be seen to campaigning for a constitutional settlement that meets the needs of the nations of Scotland, England, Wales and Northern Ireland for the 21st Century and beyond and puts the case for the continuation of the UK beyond doubt.

If, like me, you see federal Home Rule as the constitutional solution in legislative and administrative terms, then the logical extension of that argument is to see fiscal federalism is the economic solution. That has certainly been my understanding of the position over many years. The Scottish Parliament should have the powers to raise as much as possible of its expenditure needs and should have responsibility for all taxes except those reserved to the Federal UK. Borrowing powers would have to be capable of relating to UK macro-economic policy, be operated in accordance to terms that are clear and transparent.

The aim has to be to establish the creation of a modern federal British State with Home Rule for all of its constituent parts as the long-term objective. A route map for the progressive untangling of the British equals English equals British conundrum has to be put in place. Any proposal to transfer further legislative or administrative powers to the Scottish Parliament should be framed on the basis that it ultimately would form part of a federal Home Rule Settlement that would apply equally to the other Nations and Regions of the UK. Likewise, any proposal for the transfer to the Scottish Parliament of financial powers in the form of fiscal federalism should be framed on the basis that this is the system that would ultimately apply throughout the UK.

* Ross Finnie has been an MSP and was Scottish Rural Affairs Minister for 8 years from 1999-2007

Reproduced from libdemvoice.org

UK should adopt a federal system, with regional parliaments, in event of a No vote in independence referendum, say Lib Dems

THE UK should adopt a federal system, with regional and national parliaments and assemblies across the country, in the event of a No vote in the independence referendum, according to a “home rule” commission.

It suggests Scotland could raise around two thirds of all the money it spends, with the Scottish Parliament collecting almost all income tax, capital gains tax, inheritance tax and air passenger duty.

A federal government in London would retain powers over foreign affairs, defence, currency, welfare and pensions.

The Scottish Liberal Democrats hope other parties will adopt their proposals if voters reject independence in the 2014 referendum agreed by David Cameron and Alex Salmond.

The plans were drawn up by a commission chaired by Sir Menzies Campbell, the former party leader, and include a radical proposal to scrap the Act of Union between England and Scotland and replace it with a “Declaration of Federal Union”.

The report also states that different parts of the UK may wish to move at different speeds towards federalism, adding: “The move to home rule status for Scotland, in which it enjoys a federal relationship with the rest of the United Kingdom, is a first stage that can proceed ahead of the rest.”

n to the leaked report, to be published on October 17, Sir Menzies says it is his “firm belief” that the proposals are in the best interests of every part of the UK.

He writes: “The ideas and structure we have laid out are unlikely to be achieved in one leap. Our priority is to secure and entrench a broader home rule settlement for Scotland, but there can be no doubt that this would benefit from major change at Westminster too.

“Over time, we are confident that the constitutional debate in England, currently under-developed, will progress and reach a conclusion, but time will be required for that debate.

“We expect that Scotland will contribute to the terms of that debate, at least by example, but it is for people in England to determine how they wish their own national and regional identities expressed within the constitutional structures of our United Kingdom.”

The report adds: “Scotland will thrive with the fiscal responsibility and authority that comes with home rule, but that home rule settlement can only be stable if it forms part of the move to a truly federal United Kingdom. We shall promote home rule and federalism at every opportunity.”

Meanwhile, Alistair Darling, the former chancellor and leader of the Better Together campaign against independence, said the UK should remain together for economic, emotional and cultural reasons.

He claimed the SNP vision of independence, with Mr Salmond, the FIrst Minister, wanting a separate Scotland to enter a “currency union” with the remainder of the UK, was “like serfdom”.

He added: “If Scotland became independent it has got to have its own financial services regulatory regime. What you have now is a genuinely open, single market. You have to ask yourself why are you doing this, what is the purpose for it all?

“I think to enter into an economic union where we are giving up the influence we have got just now, when you have to enter into a fiscal pact which means that Scotland’s tax and spending would have to be approved by and agreed to by the UK, that isn’t freedom, that is more like serfdom.”

Reproduced from the Telegraph online

Towards a federal future for the UK: The FT

Leading up to the Scottish Independence referendum in 2014 the Financial Times published the following piece:

The “Better Together” campaign, which opposes independence, has recently gained ground. Last week the writer JK Rowling handed the pro-union side a coup by not only adding her voice to its cause, but giving £1m to its campaign. Polls show that the mini-surge by the Yes campaign earlier in the summer has now stalled.

But even if the pro-union side does ultimately prevail, the British establishment cannot assume that the status quo will simply roll on. As part of their contributions to the campaign, the main UK political parties have recently been giving thought to what might happen in Scotland should it vote to retain the union. All three have accepted that there will need to be more devolution if Scotland is to be firmly anchored in the UK.

The boldest of these plans was the one set out by the Conservatives at the start of June in a report from Lord Strathclyde. The Tory proposal promises to give the Scots substantial new fiscal powers, including control over their own income tax. The Scottish government would be responsible for financing at least 40 per cent of its budget.

True, this position is not universally held. The Labour party, for instance, is much more wary about such a radical extension of fiscal devolution. But the pledge to extend new tax-raising powers is in principle a good one. In spite of devolution, Scotland raises far less of its money spent on its own territory than the German Lander or the Canadian provinces. Given the amount of public money it disperses, Scotland should take more responsibility for raising it.

If the Conservative proposal for further Scottish devolution is the one finally adopted, this would not be the end of the matter. A shift to far greater fiscal devolution north of the border would have to be mirrored across the rest of the union. It would require a whole new constitutional settlement whose purpose would be to create a more federalised Britain. This would have three main elements.

First, Wales and Northern Ireland would need to gain similar powers to those in Scotland to raise, and vary, tax rates.

Second, the Westminster parliament would need to overhaul its procedures. MPs from the devolved regions should have less say – or none at all – on matters, such as health and education, which affect England only.

Lastly, there would be a strong case for looking again at House of Lords reform. In a more federalised Britain the upper house should contain not only leading figures from the four parts of the UK, but perhaps also delegates from the city regions.

None of these reforms are without difficulties. Other parts of the UK may have far less appetite for fiscal devolution than Scotland. Northern Ireland, for instance, receives a pretty generous deal under the current block grant arrangements.

Slotting England into a federal constitution would also be difficult. Accounting for 85 per cent of the UK’s population, it would be the dominant legislature, setting standards and regulations for the others. Were the party forming the UK government not to enjoy a majority in England, the possibilities for constitutional deadlock would be legion.

But while these are complex challenges, Britain’s main political parties have no time to lose in discussing them. If Scotland votes No to independence in September, the UK will doubtless become consumed by the 2015 general election and the possibility of an EU referendum two years later.
But the creation of a new constitutional settlement for Britain is not a matter that can be left on hold.

Reproduced from the Financial Times online.