Category Archives: Labour

How Labour messed up 1998-model devolution

It’s intriguing to see various senior figures from the New Labour era call for a return to something much more like new Labour to revive the Labour Party. Those figures seem to overlook how responsible New Labour’s politics and legacy are for the mess Labour now finds itself in. (On the nature of that mess, I agree with quite a lot of what Paul Mason says here; it is very clearly a structural problem caused by the collapse of an electoral coalition, not just a question of policy detail or leadership.)
New Labour helped create the mess, at least in its territorial dimension, in two particular ways. First, its political economy depended on getting London to generate large tax revenues to pay for redistributive benefits and much of public services in the rest of the UK, and satisfying those already owning property in London through a property boom. This has left a lasting and damaging legacy by creating or at least magnifying huge inequalities and resentments arising from different regional economies and levels of prosperity.  (In technical terms, it sought to use a huge vertical fiscal imbalance to redress horizontal inequalities.  What actually happened was that those horizontal inequalities increased.)
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Filed under Devolution finance, Elections, English questions, Labour, Scotland, Wales

Devolution, territorial politics and the general election

This post also appears on the Constitution Unit’s blog, here. Constitution-unit.com has a number of other election-related posts which are well worth reading.

It is hard to think of a general election that has ever been so freighted with questions about the UK’s territorial constitution. It is hardly an overstatement to say that the outcome of the 2015 election, and actions of the government that takes office after it, will either reshape the UK significantly or ease the way to its breakup. This post considers what the manifestos tell us about what the various parties propose to do and how they propose to do it, when it comes to the reshaping of devolution arrangements across the UK, and then discusses some of the issues that will loom larger after 7 May.

The pro-UK parties

The 2015 manifestos contain a welter of devolution-related commitments. Those in the three pro-UK parties (Conservative, Liberal Democrats and Labour) are all strikingly similar, though not identical. For Scotland, all commit to implementing the Smith Commission’s recommendations, and to retaining the Barnett formula. (Interestingly, they do not commit to the UK Government’s white paper Scotland in the United Kingdom: An enduring settlement, raising the possibility they could scrape off some of the barnacles that paper puts on the Smith proposals). Labour want to go further in a ‘Home Rule bill’ in unspecified ways, though it appears that wider scope for the Scottish Parliament to legislate on welfare matters is key to it. These commitments rather resemble those made by the same three parties in 2010 about the implementation of the Calman Commission’s recommendations, though with Labour somewhat breaking ranks with the two governing parties.

There is also similarity when it comes to Northern Ireland: endorsement of the peace process and commitments to support it, along with the economic rebalancing package agreed as part of December’s Stormont House Agreement. For Conservatives and Lib Dems, this includes support for sustainable public finances, welfare reform and corporation tax devolution subject to adequate progress being made on financial matters. Labour’s commitments appear to embrace similar policies, but are confusingly worded. They say they will: Continue reading

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Filed under Conservatives, English questions, Labour, Lib Dems, Northern Ireland, Plaid Cymru, Scotland, SNP, UK elections, Wales, Westminster

‘The Staggers’ post on income tax devolution and Scottish Labour

Guy Lodge and I had a post in the New Statesman’s politics blog, The Staggers, on Friday about income tax devolution in Scotland. 

Since this went up, there has been further coverage of the story.  John McTernan came up with a rather doubtful proposal in Friday’s Scotsman – calling for substantial welfare devolution (including key UK-wide redistributive benefits like Job Seeker’s Allowance), but no fiscal devolution.  Saturday’s Guardian leader highlighted the importance of a ‘proposition that goes beyond the status quo’ from the unionist parties as part of their campaign in the Scottish independence referendum.   Scotland on Sunday’s coverage includes the front-page lead, a detailed analysis piece, and a leader Unsurprisingly, Alex Salmond is making the most of Labour’s disarray. 

The Staggers post can be found here, and the text is also below. 

Labour must not retreat from further devolution to Scotland

Those concerned about the survival of the Union would do well to turn their attention away from David Cameron’s “seven months to save the UK” speech and look instead at developments taking place in the Scottish Labour Party. Worryingly, just at the moment when the Yes camp appear to be gaining some momentum in the polls, Scottish Labour appears to be retreating from providing Scottish voters with a clear alternative to independence in the form of additional powers for the Scottish Parliament. Continue reading

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Filed under Labour, Referendums, Scotland, Scottish independence

Devo More as a plan for a revivified Union

Monday’s Herald had a story based on an interview with me (here), based on something I’ve written as part of the IPPR’s Devo More project.  In this paper, I set out the Devo More strategy as a whole, and explain how it fits with the political traditions of each of the major UK-wide parties.  There are two key arguments: much the same package of devolution serves the interests of all three traditions and the parties that currently embody them pretty well, and that this approach to further devolution will reinforce the Union not weaken it.

I’ve written a comment piece for the Herald which summarises the chapter and its overall argument.  That can be found here, and its text is also below.  The chapter on which all this is based can be found on the IPPR’s website here.

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Filed under Conservatives, Labour, Lib Dems, Publications and projects, Scotland

Wales’s new fiscal package: the UK Government response to Silk

Friday’s news had ample coverage of the UK Government’s decision about financing Welsh devolved government, following the Silk Commission’s Part 1 report from last November.  No doubt the looming anniversary of the publication of the Silk report triggered a certain sense of urgency.  Despite promises that the UK Government would produce its response in ‘the spring’ (and strong hints this would be earlier in the spring rather than later), that has been delayed and delayed.  At the end of June, Secretary of State David Jones said it had been postponed until after the summer, and now pretty late in the autumn it has finally materialised.

There has been wide coverage of the UK response.  The Western Mail’s article by David Cameron and Nick Clegg is here, and their news coverage is here, here and here.  BBC News coverage is here, and analysis here.  The Guardian’s story is here.  The official Wales Office press release is here, and the written ministerial statement is here.

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Filed under Calman Commission/Scotland bill, Conservatives, Devolution finance, Intergovernmental relations, Labour, Lib Dems, Wales

Devolution literacy and party conference policies

The party conference season always produces a crop of policy announcements that are meant to be eye-catching.  The extent to which these are thought through is often doubtful, though – these are announcements for political purposes, not necessarily to work in the real world. That also means how their devolution implications is addressed is often rather sketchy.   Regular readers of this blog will know that concern about ‘devolution literacy’ is a long-standing one of mine, and one which I find has slowly but materially improved over the courts of the 2000s and 2010s.

Either devolution has bedded itself into party-policy framers’ consciousness, or something has changed.  When he made his announcement about free school meals for 5-7 year olds in England, Nick Clegg was keen to point out that funding would be given to the devolved administrations to decide whether to follow suit.  (The political pressure to do so will be considerable, of course – a lot of parents’ and poverty groups will be asking pointed questions about it.)  And that’s all well and good; the Treasury’s Statement of Funding Policy provides that spending on the schools budget has a 100 per cent comparability percentage for Scotland, Wales and Northern Ireland – so any extra spending on that budget automatically triggers a full population-related comparable payment.

Ed Miliband’s widely-trailed announcement about cancelling a cut in corporation tax and instead making one in business rates (strictly, non-domestic rate or NDR) is more problematic.  The aim is to favour smaller businesses, which may not be incorporated (or have profits), but which necessarily occupy business premises.  Like Clegg, Multiband will apparently announce a change for England, with funding for devolved governments to make a similar cut.  The problem is that this is not what the Statement of Funding Policy says.  NDR is only 100 per cent comparable for Wales, where a complex England and Wales pooling mechanism currently exists.  Even there, there are plans for change following the Morgan Review last year (BBC News summary here, full documentation here).  In Scotland and Northern Ireland, NDR is 0 per cent comparable – because it’s regarded as fully devolved.  So any decision for England would not automatically trigger comparables for Scotland or Northern Ireland.

There are ways to resolve this, of course.  The easiest is probably the messiest – a one-off concession relating to adding a specific block of money to the devolved governments’ budgetary baselines.  (If the comparability percentage were changed, it would lead to further complications in future.)  Even then, though, there is no guarantee whatever that devolved governments will use the extra money in the way UK Government might desire.  (Indeed, the Scottish Government has been imaginative in making use of NDR as an instrument of local economic policy – extra charges for out of town superstores, for example.)  But the point is that Miliband’s attempt to make an impression by reshaping where the burden of business taxation falls has run into the practical realities of how the post-devolution, fiscally decentralised UK functions.  While Miliband deserves 8/10 for effort in thinking about the problem, it’s only 4/10 for success in doing so.

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Filed under Devolution finance, Labour, Lib Dems, Policy issues

The UK-Welsh Government agreement on borrowing powers and Barnett convergence

The agreement between the UK and Welsh Governments on borrowing powers and finance announced on Wednesday has been much trumpeted by the Welsh Government.  In truth, it’s hard to see that it adds up to a great deal, and it raises more questions than it answers.

The press statement relating to the agreement can be found on the Wales Office’s here and the Welsh Government’s here.  The Agreement itself is on HM Treasury’s website here, and the ‘technical annex’ (which considers the operation of the Barnett formula in relation to Wales) is here.  My own earlier posts on these negotiations, and the Welsh Government’s approach to them, can be found HERE and HERE.

It’s worth remembering that this ‘intergovernmental’ process was adopted by choice of the Welsh Government, which sought to ensure that these issues were kept out of the remit of the Silk Commission.  That of course makes the work of the Silk Commission all the harder, as matters which relate to how devolved government in Wales is funded are excluded from its remit.  That was the subject of particular criticism in a Lords debate on the subject back in July.  In effect, Silk can only consider half the subject.  A Welsh Government official defended this to me on the ground that the issues regarding both borrowing and the block grant were now clear, thanks to the Holtham Commission, and what was left was the political matter of resolving them.  Implicitly, the Welsh Government bet that it could get a better deal by negotiating them directly with the UK Government, rather than letting them form part of the remit of the cross-party Silk Commission.

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Filed under Devolution finance, Intergovernmental relations, Labour, Wales, Whitehall