It was nowhere near as close as many hoped or feared but 1.6m UK citizens still said they wanted out. The prime minister has reaffirmed his commitment to the vague devo-max promises made late in the day. Fearing the rise of UKIP, his backbenchers insist that the ‘English question’ needs sorting too. Despite the uncertainties, constitutional change is coming.
Scotland will sort itself out I’m sure. The backlash would be too great if they did not get something acceptable to the Scottish government. The Tory backbenchers would no doubt like to see public spending in Scotland brought into line with England but the PM seems to have committed to the Barnett formula that allows higher Scottish spending, while oil revenues offer him a justification to defend that.
The problem with committing to Barnett is that it hurts Wales. Unlike Scotland, Wales gets more from the public purse than it pays in (maybe £12billion a year) but if its block grant was funded on the same basis as Scotland it would get another £300m a year. (I’m simplifying but that’s basically the case).
The UK government could of course just change the Barnett formula so Wales and Scotland were treated equitably. However, a greater ‘hand out’ to Wales will not go down well with the backbenchers or the English nationalist party that masquerades as UKIP. It might also mean less cash for Scotland. A future Labour UK government does appear to have promised some sort of Barnett reform but the details are vague and, anyway, they’re not in power.
Cameron has to face up to solving the Barnett issue because without doing that he can’t deliver “English votes for English issues”. At the moment, the level of public spending in England helps determine the size of the Welsh and Scottish block grants. Thus any vote on, say, English education that involves a change to spending levels is not an England-only issue because it affects the Welsh and Scottish budgets. Welsh and Scottish MPs will continue to be justified in voting on English issues for as long as Barnett continues.
Thus any constitutional reform of England has to first address how Wales and Scotland are funded. But it is surely not impossible to come up with a new formula that calculates the Welsh and Scottish block grants based on an equitable assessment of their needs (i.e. the extent of deprivation there and the cost of delivering services).
Once you have a new formula there is nothing to stop a federal parliamentary system for the UK, the ‘home rule for all’ option. Here the Commons becomes the English Parliament and the parliaments of all four nations have fiscal and domestic responsibilities. The Lords, meanwhile, is replaced with a UK-wide new elected chamber that deals with defence and other UK-wide issues. England has a first minister. The UK has a prime minister. They might belong to different parties.
There might need to be some policy alignments between the nations or a retention of some UK-wide domestic issues. For example, significantly different levels of unemployment benefit and state pensions could lead to some awkward population movements. But you could leave welfare payments (except housing benefit which is ultimately a local issue) at a UK level.
Most importantly, a federal UK could only work if there was some form of wealth redistribution between the nations. This happens within the EU and would be the cost of retaining some form of political unity and collective safety. In essence what would happen is that Wales and Northern Ireland, using whatever replaced Barnett, would get a subsidy from England, plugging the hole in their finances. If they wanted to spend beyond that they would have to use their tax and borrowing powers.
UKIP would moan but surely would not be in an electoral position to do much about it now the England question is solved. (The EU issue would still be there but I have enough faith in the English electorate to vote to stay in any European referendum .) Labour would lose some influence in England but not in the UK. They won’t like that but democracy means it is unfair for them to govern England unless they can get a majority there. The Tories would be happy because they had saved the union, increased their influence in England and hurt UKIP. National identity in the four nations would be recognized.
The biggest question mark would be whether the English electorate would accept the subsidy of Wales and Northern Ireland. But that already exists and polls say they want to keep the union and believe in social justice. This is the cost.
I’m sure the devil is in the detail but I’ve put the same level of thought into this as the back of the envelope vows made by the UK parties just before the referendum.