With all the speculation about what impact a large contingent of SNP MPs (or other regionally-based minor parties like the DUP) might have at Westminster after 7 May, it is worth looking at experience in some other countries. This situation may not be something the UK is used to, though it was key to how British politics worked in the late nineteenth and early twentieth century once the Parnell/Redmond Irish Party became the dominant electoral party in Ireland. There are more recent parallels from two other parliamentary systems with minority nationalities: Canada (and the Bloc Québecois), and Spain, particularly with Convergència i Unió but also other parties from Catalonia, and indeed the Basque Country and Galicia.
To make sense of what has happened in Canada, it’s necessary to know a bit how Canadian politics works. Federal and provincial party organisations are quite separate there, except for the New Democrats. The main party of Quebec ‘sovereignism’*, the Parti Québecois, has limited itself to Quebec provincial elections (as has the federalist Parti Libéral du Québec). Its counterpart for federal elections, the Bloc Québecois, was established in 1991, between the 1980 and 1995 referendums and after the failure of the Meech Lake process that was expected in Quebec to lead to a renewed form of federalism including a special status for Quebec. Its first leader, Lucien Bouchard, had been a minister in Brian Mulroney’s cabinet and an advocate for the Meech Lake deal. The Bloc was highly successful in its first election in 1993, winning 54 of 75 Quebec seats, and with the implosion of the Progressive Conservative Party it found itself forming the official opposition to the Liberals in the 1993-97 Parliament. It remained the dominant player in Quebec federal politics until 2011, winning over 40 seats in each election (and usually over 50) except for 2000, when it won 38.
A little while ago I submitted a formal memorandum of evidence to the Silk Commission, for part 2 of their inquiry into constitutional matters relating to Welsh devolution. It is concerned with constitutional issues – not what might be devolved, but how, in structural terms. In particular, I discuss the relationship between a separate Welsh legal jurisdiction and the ‘reserved powers’ model of legislative power for the National Assembly, and what such a legal jurisdiction needs to involve (rather than what it might involve).
My memorandum is now available on the Commission’s website here, and can also be found HERE.
One reason why this blog has been so quiet for the last few weeks is that I’ve been trying to finalise work I’ve had underway for some time on what I call the ‘more or less federal model’ for devolution finance. The idea behind this project was to see what sort of lessons could usefully be learned from the financing arrangements in federal systems for financing devolution in Scotland, Wales and Northern Ireland; how to extend devolved tax-setting powers in a workable way, and reconcile these with securing an equitable distribution of resources across the UK. That work is now completed, and the paper is due for publication by the Institute for Public Policy Research next week. It’s a detailed and chunky piece of work, drawing on data published in GERS, the Northern Ireland Net Fiscal Balance Reports, and by the Silk Commission, and I hope it will be a valuable contribution to the current debates in Scotland and elsewhere about the future of devolution.
There will be a launch of the event at the Royal Society of Edinburgh on George Street in Edinburgh at 8.30 am on Friday 25 January. Speakers will include me, Guy Lodge of IPPR, Willie Rennie MSP, leader of the Scottish Lib Dems, and a Labour speaker. There’s information about it on the IPPR website here, and anyone would like to attend should email Glenn Gottfried of IPPR at G.Gottfried@ippr,org to book a place.
Guy Lodge of IPPR and I have an article in today’s Scotsman, about the right lessons to learn for devolution finance from the problems of sub-state borrowing in southern Europe. The article can be found here. Below is the original copy we filed, with some hyperlinks added.
DEBT AND FISCAL DEVOLUTION: LEARNING FROM CLUB MED
It was inevitable that the eurozone crisis would cast a shadow over the debates about Scotland’s constitutional future. The SNP have already been forced to rethink their commitment to take an independent Scotland into the euro, opting instead to stick with sterling for the foreseeable future. Developments in Italy and Spain mean the spotlight has now turned on those who support further enhancing the powers of the Scottish Parliament instead of independence. For many the case for handing Scotland greater tax and borrowing powers has been badly damaged by the sight of Valencia, Catalonia and most lately Andalucia – Spain’s indebted autonomous communities – queuing up for bail-outs from the Spanish government. Does the UK really want to replicate the situation in Italy where the central government has been forced to take over the finances of a fiscally autonomous but bankrupt Sicily?
The Treasury – which has just ended a consultation on Scottish borrowing – is clearly looking hard at Club Med’s problems. It no doubt thinks the UK has dodged a bullet by ensuring that devolved governments cannot run up similar debts. But that would be to draw the wrong lesson, getting both the politics and the economics wrong.
In fact, there are two lessons that can be better learned from southern Europe’s current travails. The first is that hard budget constraints – that devolved budgets cannot be open to politically convenient top-ups from central government – are vital. The problem with the Spanish regime for financing the autonomous communities is that regional and central state finances are hopelessly entangled, which means that bailouts are regarded as being on offer, and (outside the Basque Country) powers to set tax rates have never been used to depart from the rates set years ago before the taxes were devolved. Spanish fiscal devolution has involved a slow, incremental deconcentration of tax powers, without ever fully separating the finances or tax powers of each government. Worse, overlaps in functions and political choices by the central government may have driven up borrowing. Catalonia regularly complains that the central state has deliberately under-invested in central government infrastructure functions in Catalonia, using the money saved (much of it generated by Catalan taxpayers) to spend elsewhere. Consequently some Catalan regional spending is needed to fill that gap (it is therefore over-simplistic to regard the problem as ‘regional overspending’ – the central state is also partly responsible for the perilous state of the autonomous communities’ finances).
Last Friday, Hamish Macdonell suggested in a story in the Independent (available here) that the UK Government was considering a ‘clarity act’ in relation to a Scottish independence referendum. This is part of the ‘will UK take charge of the referendum or not?’ rumour mill that has been running for some weeks, stoked by some at Westminster. (A contradictory view to Macdonell’s can be found in this story from last Friday’s Herald.)
What’s novel about Macdonell’s story is that it is the first time I’ve heard such a suggestion reported in public, though it would be astounding if it weren’t the case. After all, the summer months saw visits to Ottawa by Gus O’Donnell, in June, and by David Cameron, in September. It’s very hard to believe that they wouldn’t discuss parallels between Scotland and Quebec with federal government officials and ministers while they were in town. If they did, the Clarity Act will have been top of the list. The Canadian federal government remains very proud of the Act, which was the last move in time in the last wave of ‘mega-constitutional’ politics, and they see it as having pretty much definitively nailed down the lid of Quebec separatism. Many other features of the UK Government’s constitutional strategy come straight out of the Canadian federal playbook as well. The hard line about asserting the integrity of the Union, the effect of withdrawing UK functions and contracts, the pointing-out of difficulties with the SNP’s plans for obtaining independence and the sort of a country an independent Scotland would be, the demands that the SNP set out its plans much more clearly: these are all established techniques used by the federal government there.
This is rather a long post. In it I discuss the background to the Clarity Act, particularly the 1995 Quebec referendum and the Supreme Court of Canada’s 1998 opinion in the Reference re the Secession of Quebec. I then turn to the impact of the Clarity Act itself, and conclude by considering what lessons the UK might learn from this.
What led to the Clarity Act: the 1995 referendum and the Supreme Court’s opinion on the secession of Quebec
The Clarity Act was passed by the Parliament of Canada in 2000. (It’s available here, and the Wikipedia entry here has a good discussion.) It’s worth setting out briefly the sequence of events that led to the Act.
I had an article in the Scotsman yesterday, about Murdo Fraser’s plans to establish a separate right-of-centre party if he is elected as Scottish Conservative leader. I’ve previously discussed these issues HERE and HERE. The article is available from the Scotsman‘s website here, and the copy I submitted is below – my title is different to the one they chose, of ‘Involved voters like devolved parties’. (The paper also added a sub-head which I didn’t write, referring to ‘separatist’ systems – which would not be my preferred adjective to describe a multi-national state.)
Murdo Fraser’s new party: not so much breaking a mould as adapting to reality
Murdo Fraser’s announcement that, if elected as the new Scottish Conservative leader, he would disband the existing party and create a new centre-right one operating only in Scotland has created a good deal of excitement. If the aim was to get the Scottish Conservatives back into the news, it has emphatically succeeded.
What Fraser is proposing – two geographically distinct parties occupying much the same political space, and collaborating in state-wide politics but otherwise ploughing their own furrows – is very reminiscent of Germany. The Christian Social Union in Bavaria is separate from the Christian Democratic Union in the other Länder (states), but they occupy similar political space, don’t campaign in each other’s territory, share a single candidate for Chancellor at federal elections and co-operate in the Bundestag in Berlin. The CSU dominates Continue reading
I spoke earlier today at a conference about ‘The new National Assembly’ in Cardiff. This is a summarised version of my talk, which also appears on Wales Home here. The slides from my talk can be seen here.
The referendum in March 2011 marked a huge change in Welsh devolution. It was an emphatic endorsement of the principle that the people of Wales wanted an extensive form of devolution, with the National Assembly taking responsibility for a wide range of functions as set out in Schedule 7 to the Government of Wales Act 2006.
One way to think about this change and what it means is to use a framework I developed to think about extending devolution in Scotland, which I used in an article published in Scottish Affairs of summer 2009. I distinguished there between four models of devolution:
- Model 1: ‘Local administration of distributive functions’ such as health, education, housing, or planning, but with the overall policy set elsewhere. That would imply funding simply by way of grant.
- Model 2: ‘Self government of matters of local concern’, with the regional-level institutions determining not just how those ‘distributive’ services are provided but what sorts of services there should be, and doing a limited amount of ‘place-shaping’ through powers over economic development, land use planning. That would imply grant funding, perhaps with limited tax powers. Continue reading
One smaller sideline of the Eurozone’s financial crisis is news that Madeira has only just ‘discovered’ an extra €1 billion of borrowing that had not previously been disclosed. There’s a rather sketchy report from the FT here, and a better one from the Wall Street Journal Online here.
Madeira is an odd place. Although Portugal as a whole is highly centralised, Madeira (and the Azores, another set of distant islands) have a very high degree of autonomy. It has a population of around 268,000, and has had the same governor continuously in office since 1978 – a circumstance that often reflects a traditional, patronage-based politics. The ‘extra’ €1 billion isn’t huge in the overall scale of Portugal’s debts which are close to 100 per cent of its GDP (€229 billion) and given that Portugal has already been bailed out to the tune of €78 billion. Portuguese bonds were downgraded by Moody’s in July to Ba2, meaning they count as ‘junk’. This hole in Madeira’s accounts comes on top of a previous error of €568 million, and was only discovered by the diligent efforts of Portuguese and IMF statisticians – it wasn’t disclosed in Madeira’s own accounts.
But this nonetheless means that there has been undeclared debt amounting to €5850 per Madeiran resident, uncovered at a time when it further damages confidence in Portugal’s ability to manage its public finances (and when similar problems arising from sub-state borrowing are attracting scrutiny in Spain too).
This all adds to the problems of devolving meaningful borrowing powers to the UK’s devolved governments. There is a difference of view here, between the UK Government (where the Scotland bill and Command paper propose borrowing through HM Treasury), and the Scottish Government and the Scotland Bill Committee in the last parliament, which have called for a separate power to issue Scottish bonds. It’s hard to see how such incidents as that in Madeira will do other than alarm HM Treasury about the implications of such bond-issuing powers.
Murdo Fraser’s announcement last Sunday that, if elected as their new Scottish leader, he would disband the ‘Scottish Conservatives’ and create a new centre-right party has created a good deal of excited discussion. I’ll be commenting directly on Fraser’s proposal in another post, but in order to do so sensibly it’s necessary to talk more broadly and comparatively about political parties in regionalised or federal systems like the UK.
Comparatively speaking, the UK is very unusual in maintaining three Britain-wide parties in a substantially decentralised, multinational state. Some federal systems maintain single party systems: Australia, the United States and (largely) Germany are cases in point. But these are not multinational systems. Multinational systems like Canada, Belgium or Spain have all developed fragmented party systems, where parties operate only in parts of the territory of the state, not across the whole state. Belgian parties operate only in the Flemish or French- Continue reading
Wednesday’s meeting of the plenary JMC must have been squeezed into the diaries. Both Carwyn Jones and David Cameron had their question times in the National Assembly and UK Parliament respectively earlier in the day, as well as other public functions.
The meeting has produced two genuine and welcome steps forward. One is its communiqué (available here), which is a good deal fuller and more informative than previous such communiqués have been. It gives us a reasonable idea of what was discussed – mutual co-operation and the state of the economy and public finances. ‘Mutual co-operation’ no doubt included discussion of ‘respect’ as well as the general principles of intergovernmental liaison, as well as amending the disputes avoidance and resolution procedure. (It will be interesting to see what changes exactly that involves.) Economic and financial issues clearly included each government’s pleas regarding UK economic policy as well as their own more direct financial concerns. While it’s hardly explicit about what was said by whom, it’s a great step forward to get something that’s as clear and useful as this is.
The second step forward is an annual report for the whole JMC process, which is available here. This appeared last year as well, but it’s a novelty for the UK Coalition Government and a very welcome one. (The 2009-10 report can be found on the Scottish Government website here.) The report summarises all activity within the JMC framework over the last year, including dates of meetings of the JMC in its Domestic and Europe formats, the Finance Ministers’ Quadrilateral (JMC Finance in all but name, now), and what was discussed at those. It records four meetings of the JMC (Europe), two of the JMC (Domestic) and two of the Finance Ministers’ Quadrilateral. Again, it’s not hugely detailed or revealing, and except when it comes to the issue of disputes there aren’t any great surprises here. Indeed, it carefully dances around some questions concerning the JMC (Europe), which stopped meeting Continue reading