Options for an English Parliament: policy powers and financial arrangements

Ongoing Constitution Unit research is exploring options for an English Parliament. Two of the most fundamental questions concern what policy powers such a body would have and financial arrangements. Jack Sheldon suggests that an English Parliament would be likely to have policy and fiscal powers resembling those of the Scottish Parliament, and that a new funding formula would be required to cover the costs of devolved services. These developments would have major implications not only for England but also for the other parts of the UK.

Since last autumn Professor Meg Russell and I have been working on a research project exploring the options for an English Parliament. Although there have been various calls over the last 20 years to establish such a body, how might it actually work in practice? Two of the most fundamental questions, which have major implications for other aspects of institutional design, concern what policy powers an English Parliament would have and what kind of financial arrangements would be possible. This blog post focuses on these questions.

What English Parliament supporters have said

English Parliament supporters emphasise restoring equality among the UK’s nations, in light of what they see as the unfairness of present devolution arrangements. It is thus unsurprising that they have often set the powers of the Scottish Parliament as a benchmark. The Campaign for an English Parliament (CEP) state prominently on their website that they campaign for an institution ‘with powers at least as great as those of Scotland’. This demand has been echoed by MPs who are in favour, including David Davis, Frank Field and John Redwood. In the aftermath of the Scottish independence referendum Redwood wrote that ‘As we seek to put into legislation what Gordon Brown called Home Rule for Scotland we must do the same for England’.

To the extent that they have addressed finance, advocates of an English Parliament have focused on criticism of the Barnett Formula, which provides more generous per capita government spending in Scotland than in England. Eddie Bone of the CEP has linked the continued use of the formula to ‘closures of A&E departments and council services across England’. Frank Field has likewise been highly critical of the formula, saying that ‘it is totally unacceptable that the poor in [his] constituency should be less well supported than the poor in Scottish constituencies’. Proponents have said less about what sort of financial arrangements they envisage following an English Parliament’s establishment.

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Three monkeys on the back of English fiscal devolution

The fiscal powers of English local authorities are extremely limited. In recent years there have been many proposals for significant fiscal devolution to take place, but little progress has been made on this agenda. In this post Mark Sandford argues that there are three fundamental reasons for this: the nature of the UK state, the complexity involved and equity considerations.

The mid-2010s have seen an unprecedented number of proposals for devolution of fiscal powers to local authorities in England. The coalition government’s ‘devolution deal’ policy, together with the substantial fiscal devolution granted to Scotland in the wake of the 2014 independence referendum, have encouraged many stakeholders to believe that English local government is on the cusp of a breakthrough in the balance of revenue-raising power between local and central government (Morrin and Blond 2015; Centre for Cities 2015). Some have produced reports containing substantial proposals for fiscal devolution to English local authorities (Centre for Cities 2015; ICLGF 2015; ICLGFW 2016; London Finance Commission 2017; EEF 2017). Associated concepts such as place-based budgets, raising borrowing caps, commercial councils and local government restructuring have also attracted attention as potential solutions to English local government’s financial challenges.

I suggest that these hopes and plans arise from an over-optimistic reading of the political landscape. Most of the key drivers of the apparent ‘devolutionary turn’ in England are ephemeral and highly dependent on ‘constitutional entrepreneurs’ and windows of opportunity. Developments in Scotland, Northern Ireland and Wales are matters of high politics. English devolution deals and the retention of business rates by local authorities were largely driven by former Chancellor George Osborne. Inertia and Brexit will drag hugely on all policy innovations in the 2017–22 parliament. The confusion of local administrative boundaries, public bodies and contested local identities have long frustrated strategic approaches to local governance in England.

But this type of political headwind is priced in by commentators. There are three more fundamental reasons why fiscal devolution in England was always likely to face insurmountable obstacles, which relate to the nature of the UK state, the complexity of the change implied, and to local equity. These have been largely lost in the warm glow of consensual causes such as inclusive growth and regional prosperity. They run beneath the day-to-day debate on policy solutions, and offer a more cultural account of the critical relationships at issue.

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Labour’s unavoidable English question

In 2015, the Conservative government implemented ‘English votes for English laws’ (or EVEL) in the House of Commons as a way of responding to the ‘English question’. Labour, by contrast, has had relatively little to say in this area – but were the party to form a government in the near future, it would be required to take some tough decisions. In this post, Michael Kenny assesses the possible routes forward for how Labour might respond to EVEL, in particular, and broader questions about English governance and devolution across the UK.

Brexit and its potential implications saturate British politics. But attention has lately shifted away from some of the complex constitutional questions which were aired in the days and months before the UK’s negotiations with the EU began. These include the thorny issue of how the UK government will handle the very different perspectives on Brexit which are held by the governments of Northern Ireland, Scotland and Wales – which will move back to the foreground when the government formally requests the consent of the Scottish and Welsh parliaments for the European Union (Withdrawal) Bill currently passing through the Westminster parliament. Whether Labour in Wales and Scotland opt to oppose Brexit will be of particular importance in political terms.

A related, but distinct, issue which all of the main parties will have to consider soon is how those parts of the complex body of coming legislation which affect England in distinct ways, will fare. And this in a context where it is still taken as given, in Westminster at least, that the UK government can represent the interests of the entire UK and England at the same time, even when the current administration depends for its survival upon a small party that is based in Northern Ireland only.

The previous Conservative government introduced a complex and convoluted system – known as ‘English Votes for English Laws’ (or EVEL) – to handle such legislation, and sought to make political capital out of its ability to answer the English question – one of the great Cinderella issues of British politics.

Whether these opaque rules will be enough to deal with the increasingly political character of English national identity is a moot point. But in EVEL and the patchwork model of metro mayors and newly created combined authorities it has created, the government at least has something to say on the subject of English devolution (even if what Theresa May herself thinks about these changes remains a well-kept secret).

Labour, in contrast, seems to have little to say in this area – aside from promising a constitutional convention which feels like a fig leaf, rather than a signal of intent.

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The electoral system for an English Parliament: options and implications

Ongoing Constitution Unit research is exploring options for an English Parliament. One essential question for such a body is the choice of electoral system. In this post Jack Sheldon and Meg Russell focus on the possible implications of using FPTP as compared to using AMS or another proportional system. They conclude that the choice of system would have substantial effects on an English Parliament’s likely political dynamics.

Since last autumn we have been working on a research project exploring the options for an English Parliament. Although there have been various calls over the last 20 years to establish such a body, how might it actually work in practice? One question that would need to be addressed is the choice of electoral system. In this post we focus on the possible implications of alternative systems.

Models for an English Parliament and likely electoral systems

Our research has identified two primary models for an English Parliament. Some proponents, including Conservative MPs John Redwood and Andrew Rosindell, want a ‘dual mandate’ body, whereby members of the UK House of Commons sitting for English constituencies would meet as the English Parliament on certain days. This clearly implies that members of the English Parliament would be chosen by first past the post (FPTP), at least so long as it continues to be used for UK general elections.

The alternative model is for a separately-elected English Parliament, equivalent to the existing devolved legislatures elsewhere in the UK. Proponents of this kind of change have generally said little about the choice of electoral system. FPTP has not been used for any new institutions in recent years and so a proportional system is more likely. AMS is used in both Scotland and Wales, and given these precedents it seems the most likely system to be adopted. A major part of the rationale for establishing an English Parliament is to bring more coherence and symmetry to the UK’s constitutional arrangements. UKIP’s 2017 election manifesto, which included a proposal for a separately-elected English Parliament, explicitly suggested that an English Parliament should be elected under AMS, while in correspondence  with the authors senior Campaign for an English Parliament figures have stated that ‘the electoral systems for all the devolved administrations should be the same’.

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EVEL won’t worry the new government – but the West Lothian question may well do

Following the election result some pundits have suggested that English votes for English laws might be an obstacle to the government, given its reliance on support from non-English MPs, whilst others have suggested the procedures might provide the government with an enhanced English majority. In this post Daniel Gover and Michael Kenny explain that neither of these possibilities is likely to occur. However, the territorial balance of the new Commons could cause the West Lothian question to come back to the fore – though not solely in relation to England.

Amidst the swirl of punditry and opinion unleashed by this month’s general election result, attention has once again turned to the ‘English votes for English laws’ reform (otherwise known as ‘EVEL’) recently introduced in the House of Commons. EVEL aimed to address concerns about the capacity of MPs from outside England to exercise a determining vote on England-only legislative matters. Some pundits have suggested that it may well represent an acute obstacle, of the Conservatives’ own making, to the prospects of Theresa May’s minority government given its reliance on support from MPs outside England. Others, by contrast, have wondered whether EVEL might give her the enhanced majority she needs to govern England. In fact, neither of these possibilities is likely to occur.

Indeed, some of the more outlandish claims in circulation about EVEL supply yet more evidence of how poorly understood this set of procedures still is. In our in-depth analysis of its first year of operation – Finding the Good in EVEL, published in November 2016 – we argued that the EVEL procedures should be simplified, made more transparent, and be better explained by government. But, although EVEL itself is unlikely to greatly hinder this minority government in parliament, some of the wider issues underpinning the ‘West Lothian Question’ (to which EVEL was a very belated answer) may well resurface, and it is worth pondering those at this particular moment.

EVEL and the West Lothian Question

The arithmetic of the new House does mean that questions of territorial representation could well become divisive and difficult for Theresa May, and these may add to the formidable set of challenges ahead of her. But to understand these, we should first remind ourselves of the iconic West Lothian Question posed by the late Tam Dalyell in response to proposals for devolution in the 1970s. Dalyell raised two distinct issues. His central complaint was that, were devolution to be implemented in only certain parts of the UK, MPs who represented seats where devolution applied could, in principle, determine outcomes for those who lived in non-devolved parts of the UK, whilst MPs representing the latter could not do the reverse. Implicit within this, however, was a second observation: that devolution might legitimise the idea that any UK administration needed a ‘mandate’ to introduce legislation for territories where it was not the majority party.

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The 2017 election manifestos and the constitution

Over the past two weeks the political parties have published their manifestos for the snap general election. In this post Chris Caden and Fionnuala Ní Mhuilleoir summarise the constitutional content, covering proposals relating to Brexit, the possibility of a constitutional convention, devolution, House of Lords reform, electoral reform, human rights and freedom of information.

Theresa May’s surprise election announcement left the political parties with the challenge of putting together manifestos in a matter of weeks. The Conservatives, Labour, the Liberal Democrats, the Green Party and Plaid Cymru all published their manifestos in the week beginning 15 May. UKIP followed on 25 May and the SNP on 30 May. With much of the election debate centring on whom the public trust to lead the country through the biggest constitutional upheaval in recent history, Brexit is unsurprisingly covered by all the parties. Attention on other constitutional issues has wavered somewhat as a result, but Labour and the Liberal Democrats both propose a constitutional convention to review aspects of the UK’s constitutional arrangements. The manifestos also lay out a variety of options in areas such as House of Lords reform, devolution, electoral reform and human rights.

Brexit

Negotiating Brexit is a major theme for all parties. The Conservative Brexit commitments include ending membership of the single market and customs union so that a greater distinction between ‘domestic and international affairs in matters of migration, national security and the economy’ can be made. This means negotiating a free trade and customs agreement between the UK and EU member states and securing new trade agreements with other countries. Theresa May’s party aims for a ‘deep and special partnership’ with member states. A successful Brexit deal would entail regaining control of borders, reducing and controlling net migration, but maintaining a ‘frictionless’ Common Travel Area for people, goods and services to pass between Northern Ireland and the Republic of Ireland. The manifesto controversially maintains that ‘no deal’ is better than a bad deal for the UK.

Labour also accepts the referendum result, but rejects ‘no deal’ as a feasible option and envisages something more akin to a ‘soft Brexit’. The party would scrap the Conservatives’ Brexit white paper and replace it with an agreement maintaining the benefits of the single market and customs union; the government’s proposed ‘Great Repeal Bill’ would be replaced with an EU Rights and Protections Bill to ensure no changes to workers’ and consumers’ rights, equality law or environmental protections. The party pledges to immediately guarantee existing rights for all EU nationals in the UK and UK citizens in EU countries, and would also seek to remain part of various research and educational projects such as Horizon 2020, Erasmus and the European Medicines Agency. Additionally, membership of organisations like Eurojust and Europol would be retained. Labour commits to no hard border between Northern Ireland and the Republic of Ireland.

Unlike the Conservatives and Labour, the Liberal Democrats and Greens pledge a second referendum after a Brexit agreement is concluded, which in each case would include an option on the ballot paper of staying in the EU. Preventing a hard Brexit is the first priority for the Lib Dems and as a result the party promises to fight for the continuation of UK membership of the single market and customs union. It also pledges to protect the rights of EU citizens living in the UK and UK citizens abroad, to maintain UK participation in the Erasmus+ programme and other EU-funded schemes, and to retain the European Health Insurance Card. The Greens set out a similar agenda.

The SNP wishes to mitigate what they see as the damage of Brexit with the proposal that Scotland should remain in the single market. The party seeks additional powers for the Scottish government including powers that will be repatriated from Brussels to the UK like agriculture, fisheries, environmental protection and employment law. Plaid Cymru, meanwhile, pledges to make sure ‘every penny’ of European funding for Wales is replaced by the UK government and that the Welsh share of the money promised by the Leave campaign (referring to the £350 million for the NHS) is delivered. It also demands that the UK government seeks the endorsement of each UK devolved legislature before any trade deal can be signed.

UKIP supports leaving the single market, the customs union and the European Court of Justice. The manifesto outlines that no ‘divorce’ bill should be paid to the EU and that Brexit negotiations will be complete by the end of 2019.

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Devolution in England: a review

On Monday 10 April Professor Tony Travers of the London School of Economics (LSE) spoke at a Constitution Unit seminar on devolution in England. The talk covered the history of English devolution, international comparisons, and some thoughts for the future amidst the current Brexit-dominated political landscape. Kasim Khorasanee reports.

English devolution – the delegation of powers, responsibility, and accountability from central Whitehall/Westminster government to sub-national levels – has had a fitful and uneven history. Its inevitable comparators are the devolution processes to Northern Ireland, Scotland, and Wales which took place from the late 1990s onwards. All three received national devolved governments and legislatures. More recently, Scotland and Wales have been the subjects of significant fiscal devolution. England, on the other hand, appears to have been left out in the cold – having no devolved government outside London, and both fewer MPs and lower public expenditure per head of population than other parts of the UK. Professor Travers explained that historically this trade-off was seen as necessary to maintain the Union – it was felt that an assertive England would dominate any federal union, for example its budget would be significantly larger than a federal UK government’s. However, devolution to the other UK nations had stirred something of a burgeoning sense of English identity.

English devolution – a brief history

Taking us on a canter through the history of English devolution, Travers began with Labour’s aborted attempts in the 1970s. The Kilbrandon Report (1973) recommended regional devolution within England, as well as legislatures for Wales and Scotland. The Layfield Report (1976) emphasised the importance of local accountability and responsibility for financial matters. Both failed to be implemented, and attempts at Scottish and Welsh devolution played a key part in the fall of the Labour government. The ensuing Conservative government in the 1980s brought to an end a number of significant devolved entities – metropolitan counties, the Greater London Council, and the Greater Manchester County Council. It was under Tony Blair’s Labour government that devolution received its new life. However, while Scotland, Wales and Northern Ireland received devolved assemblies, regional devolution within England was stopped short by the North East referendum (2004). But the North East was offered ‘nothing like’ the powers devolved to Scotland and Wales. An opposition campaign, illustrating their point with a life-sized white elephant, convincingly defeated the devolution proposal by 78 per cent to 22 per cent. This left the idea of regions ‘doomed – possibly forever’. In terms of new elected bodies, the only significant change was hence the resurrection of London-wide government, with the establishment of the Greater London Assembly and London Mayor in 2000.

City regions and fiscal devolution

Travers flagged that ‘city regions’ have since taken over as the focus of English devolution efforts. He drew a parallel between Tony Blair’s presidential governing style, and his push for city regions to be led by further directly-elected mayors. This enthusiasm was carried on by David Cameron, who continued to build on his predecessor’s policy. City regional mayors were made a condition of greater devolution to combined authorities. Travers emphasised that the current legislative framework for English devolution envisaged highly ‘bespoke’ devolution across the country. In doing so he highlighted that this could result in wide – seemingly random – disparities in the functions devolved to different city regions. One area which appeared quite resistant to change, however, was fiscal devolution. Although the aforementioned Layfield Report, and more recently the London Finance Commission’s reports (2013 & 2017), called for localised responsibility for taxation, central government has traditionally been highly reluctant to implement this. Travers acknowledged that responsibility for local business rates was being devolved to local government by 2020, but pointed out that it was being offset by the phasing out of the central grant to councils.

To put the UK’s lack of fiscal devolution in context Travers drew on international comparisons. He cited OECD statistics setting out the UK’s sub-national tax-raising as 1.6 per cent of GDP. By comparison Sweden, Canada, and Germany all had figures of over 10 per cent, the OECD average sitting at 8.8 per cent. The UK was very much an outlier in this respect (see below).

Similarly there are far fewer taxes devolved to London when compared with other capitals such as New York, Berlin, Tokyo, and Paris. In sum there would have to be far more radical change than currently envisaged to bring the UK into alignment with OECD trends.

Current government policy

From speaking to civil servants, Travers identified that Theresa May’s Conservative government intended to shift its emphasis away from devolution. The current ongoing processes for the May 2017 elected mayors, the 2018 mayoral election in Sheffield, and the potential for a ‘North of Tyne’ combined authority and mayor, were the extent of the devolution policy horizon. In a piece of analysis which drew chuckles from the audience he cited the number of UK budget mentions of the phrases ‘devolution’, ‘Northern Powerhouse’, and ‘mayor’ between March 2013 and March 2017. There was a spike in mentions after the coalition – between 2015 and 2016 the average number of mentions of the three phrases per budget document was 31, 14, and 13 respectively. However this dropped sharply in Philip Hammond’s March 2017 budget to eight, one, and zero mentions respectively.

Mayors and communal identities

Travers suggested that the experience of London indicated that the introduction of directly elected mayors for city regions across the UK could have significant implications. As well as having a generally higher turnout compared to local elections, London’s mayoral elections have helped cement the idea of London as a political unit in people’s minds. Devolution can reinforce a sense of difference from the whole, and Travers drew attention to the fact that the three significant ‘Remain’ regions in the EU referendum – Greater London, Northern Ireland, and Scotland – were also the subjects of significant devolution (though the balance of votes in Wales was for ‘Leave’). In the case of London this sense of civic identity had not yet gained enough momentum to push for Scottish or Welsh-style devolution. However, Travers did note an increase in the number of news articles discussing London independence. He suspected that the incoming 2017 elected mayors would – as London’s mayor had historically done – lobby for increased powers once in office. As a body the mayors could hence potentially become a lobby for English devolution. Given the consistent electoral popularity of London’s mayors, and some of the high profile candidates for the incoming May 2017 mayoral elections, these positions might also increasingly prove a staging ground for national political careers.

Reflections

In considering why England was so centralised Professor Travers reflected on a variety of explanations – the historic power of the Crown, the end of Empire, and the conflicts with local government across the 1970s and 80s. Ultimately, he expressed uncertainty about the reason, but suggested that national politicians in the UK appear to instinctively have little faith in sub-national government. Ultimately the future of English devolution is tied up with wider forces – the fate of the Union, austerity and the financing of the state, and the Brexit process.

About the speaker

Professor Tony Travers is a Professor at the LSE, and Director of the LSE London research centre

About the author

Kasim Khorasanee is a Research Volunteer at The Constitution Unit