Leaders grapple with "push me pull you" of devolution

17 September 2014 -

Eager to set up a contingency for a potential No vote in Scotland, politicians have proposed a federal government structure for Britain. But could it amount to an English Parliament pushing others away?

Jon Bennett

The referendum on Scottish Independence is in the final straight and polls suggest it’s going to be tight. And with the first votes yet to be cast, let alone counted, a wave of separatist anger is being held back by the flood wall of polling day. Not from Scots who crave independence – but from politicians in England who are furious at the “goodies”, in the words of Christopher Chope MP, that are being thrown north of the border. Far from putting the issue of devolution to bed for a generation, it will become an even more widespread talking point if the No campaign prevails.

Discussions on a new settlement for Scotland – which are inevitable whatever the referendum result – will no doubt have to deal with the question of Scottish MPs and their influence over policies in the rest of the UK. If English, Welsh and Northern Irish MPs have no say over taxes in Scotland, why should Scottish MPs exert influence over tax rates elsewhere?   

The answer being championed by Conservative MP John Redwood, which is supported by UKIP and apparently backed by MPs from other parties, is a federal UK and an English Parliament.  

Under that system, the UK Parliament (imagine the debate on where it should sit) would vote on federal policies – defence for example – and the Parliaments of individual nations would vote on devolved policy areas. While a federal Europe is an anathema to large parts of the Conservative party and to UKIP, the argument suggests that federalism as a centralising force is a bad thing, while federalism as a force for devolution is good.

There’s logic to the proposal. It offers greater simplicity than the Labour and Lib Dem preference for devolution to the city level, and appears to have more popular support that the regional devolution that failed to get off the ground under Labour.

But, is it really a powerful solution to tie the UK together, or a temporary sticking plaster? The most recent calculations by the Centre for Economics and Business Research (CEBR) show how different the dependence on public spending is between the different parts of the country. By measuring public spending in the UK by region as a share of regional GDP, huge discrepancies have been highlighted. London provides a net subsidy of 20.3% of GDP. Northern Ireland receives a net subsidy of 29.4% and Wales receives a subsidy of 26.0%. Scotland can claim to be in balance, though this depends how you apportion revenues from North Sea oil – and campaigners against independence have recently pointed to the 2% per head increase in welfare spending that Scotland currently enjoys.

How long could these transfers continue under a federal system before voters to the English Parliament started piling on the pressure to stop this “bank rolling” of other nations? It could be that the future driver of devolution would be an English Parliament pushing others away rather than other nations looking to cut their ties.

Jon Bennett is managing director of corporate communications consultancy Linstock Communications