The coalition UK Government has published its full coalition agreement today. Called, imaginatively, The Coalition: our programme for government, it’s available here.
On a quick read, it has two notable features. One is that it contains no clearly-set-out procedures for managing the coalition or handling differences between the parties. This contrasts with many other similar agreements, which hinge on setting out such procedures (see, for example, the ‘Working Together’ section of the 2003 agreement between Labour and the Lib Dems in Scotland, available here). Clear agreed procedures for these matters have been considered key to the smooth running of the coalitions like this. If this omission hasn’t been dealt with shortly, it may bode ill for the longer term success of the new government.
The other is its devolution commitments. The three commitments made in the early policy agreement – a commission to consider the West Lothian question, implementation of the Calman Commission recommendations for Scotland, and a referendum on further Welsh devolution – are included. There are some additions.
For Scotland, there is a commitment to ‘review the control and use of accumulated and future revenues from the Fossil Fuel Levy’. This is a slightly weaker commitment for the future, reflecting the release of proceeds of the levy to the Scottish Government that the new government has already made.
For Northern Ireland, there is an endorsement of devolution and the existing institutions and agreements (necessary to reassure nationalists, given the pro-Union and unionist positions taken by the Conservatives). There is also a commitment to produce ‘a government paper examining potential mechanisms for changing the corporation tax rate in Northern Ireland’. This has to be regarded as a sop to a widespread view there particularly among unionists that this power would help them compete with the lower tax rate in the Republic, and was set out in the Conservatives’ election manifesto (and reiterated by the new Secretary of State, Owen Paterson, earlier this week). It of course means that Cameron, on the visit he’s paying to the North today, has a present to take with him. But the economic objections to it are strong, and the option was rejected by the inquiry carried out for the Labour government by Sir David Varney in 2007 (available here). It’s hard to see how the conditions now are substantially different to those when he looked at the issue.
For Wales, there is a promise to ‘take forward’ the Sustainable Homes LCO following the debacle of its failure at the end of the last Parliament. As this order fell, the whole process needs to be recommenced in the National Assembly, though, so it’s not as simple as this suggests.
The puzzling part of the agreement relates to finance. Here, the agreement says
We recognise the concerns expressed by the Holtham Commission on the system of devolution funding. However, at this time, the priority must be to reduce the deficit and therefore any change to the system must await the stabilisation of the public finances. Depending on the outcome of the forthcoming referendum, we will establish a process similar to the Calman Commission for the Welsh Assembly.
The first sentence of this overlooks the fact that the Holtham Commission has yet to publish its final report (it’s due in June). It amounts to a complete deferral of any action on the block grant for Wales – one which Welsh interests might find more convincing if it were accompanied by some sort of timescale and clear commitment to action in due course. It also overlooks the need for administrative overhaul of the existing arrangements, made by both the Holtham Commission and the Lords Select Committee on the Barnett Formula, echoed by the SNP in their election manifesto – and which would not involve any extra spending at all.
But the second sentence, and the promise of a ‘process similar to’ Calman, is odd beyond words. The Calman process in Scotland had many faults, but at least it started in Scotland, with an initiative of the then leader of the opposition in the Scottish Parliament, and a resolution of the Parliament as its formal basis. (Its adoption by the UK Government happened later.) Has the Assembly Government been consulted about this? Have the other parties in the National Assembly? There’s been no mention of it before now, and if this is simply a London initiative, it suggests that Wales’s constitutional development will remain emphatically in London’s hands for some time to come.
Regarding its ‘devolution literacy’, the agreement takes a leaf out of the Lib Dem manifesto. There is no explicit distinction in the body of the agreement between devolved and non-devolved functions, but the back cover notes
The Government fully supports the devolution of powers to Northern Ireland, Scotland and Wales. As a result of devolution, many decisions made by UK Ministers or in the Westminster Parliament now apply to England only. The Northern Ireland Executive, the Scottish Executive and the Welsh Assembly Government make their own policy on their devolved issues. This document therefore sets out the agreed priorities for the Coalition Government in Westminster.
The problem with this approach is that it enables devolution to fall off the new government’s priorities. There are many areas where policies pursued at Westminster will have spill-over effects for devolved matters. For example, any increase in university tuition fees (which the agreement leaves to the Browne review) will have profound effects on universities in Scotland, Wales and Northern Ireland. A UK Government that overlooks the effects of its policies on devolved governments is liable to run into serious problems.