The Labour Party’s future in England is on a knife edge

The English Question needs an answer

The domino effect that was caused when David Cameron, Nick Clegg and Ed Miliband vowed to give more tax raising powers to Holyrood, without scrapping the Barnett formula first, has pushed the issue of how England is governed to the forefront of the UK debate. Due to the SNP’s strengthened position in UK politics, it appears the English are now eager to correct the unfair and imbalanced devolution settlement that left them without a First Minister or their own Government in 1998. Leaving the English Question unanswered is no longer an option!

Yet the answer to this most pressing of questions is still a long way off. Rather than seeing progressive solutions put forward, we have been subjected to numerous, half-baked or ill-conceived proposals, some of which are clearly ridiculous or lack any shred of fiscal credibility. The two examples that immediately come to mind are the calls for Cornish and/or Yorkshire independence, both reliant on funding transferred from other parts of England . Although these two suggestions are on the extreme side, they do highlight a most significant problem – how do you balance localised decision making and funding with fiscal accountability? If areas across England want to take on more responsibility in terms of decision making, how do you ensure that services remain uniform across the whole of England and the UK ?

Understanding the two different approaches to the English Question

At the moment there are two distinct camps in the battle to answer the English Question. Currently both appear to be polarised along party political lines. The Conservatives are calling for a top down approach of “English votes on English laws” (EVEL) which favours devolution for England starting at Westminster . Meanwhile, Labour wants the bottom up approach of Regionalisation for England that rejects Westminster ’s involvement.

The tricky question is how do UK political leaders find a satisfactory solution that welds these two elements together so that a fair, long lasting settlement can be achieved? At first glance this may appear to be an impossible task, with views and opinions on both sides of the debate becoming increasingly entrenched due to the lack of political leadership on offer.

On the one hand we see that there are many who believe that Labour’s Regionalist approach is unconcerned with keeping England together. On the other you have the “who speaks for England” view, where many believe that the people of England face discrimination and disadvantage by comparison to our UK neighbours, ignoring the population and geographical dominance of England.

Yet all hope is not lost because, on closer examination, it’s clear that both sides have more in common than they realise. Both are now campaigning for more localism and delegation of power to community decision makers via an agenda called “decentralisation’.

Linking an English Parliament with decentralisation of power within England is common sense

So, there is common ground and a viable solution, but for it to work we would require the creation of an English government to ensure that the devolution of power to England ’s local communities is carried out in a structured and coherent fashion. An English government could facilitate an ordered de-centralisation of power, combining elements of both the aforementioned approaches.

The equation is simple: An English government balances sustainable devolution and decentralisation to local communities.

This would also placate the rising patriotic English desire for a collective voice for England whilst facilitating the needs of those who want de-centralisation of power to occur.  It is truly ‘better together’ – an English Parliament would be created first (devolving to England ) and then decentralisation implemented. However for this to work an English Government would need to be democratically locked at its conception to local de-centralisation within England.

Highlighting English concerns with regionalisation

This is where an English government helps the regionalist lobby achieve what they want. It is clear that regionalism is not popular in England as the English desire a consistent and united voice for England . Many in England believe that, without this collective voice, England will be broken up into conflicting parts and would cease to exist. They would point out that the inward looking nature of local government would naturally overlook wider issues. That is the by-product of ‘localism’.

So the potential pitfall of regionalisation is the inevitable temptation for each region to pursue self-interest at the expense of the greater collective good. Cash rich regions could refuse to financially help poor regions or “Urban City Regions” could be pitted against rural towns and villages.

It is vital that regionalists recognise the pursuit of local self-interest as a potential fatal flaw, otherwise we might just find ourselves entering a period of internal conflict and financial instability. That is why an English Parliament linked with decentralisation (based wherever the people of England decide) is the only way forward for England and the UK . It is the only rational, coherent and structured constitutional answer available.

Understanding that the bank of England is the bank of last resort will halt the growing call for Scottish independence

If a devolved English government is created and a UK federal system is established then the ‘bank of last resort’, or the Bank of England, will still provide support to all the devolved nations and regions. The last resort of all, the English taxpayer, could still be relied upon to dig even deeper into their pockets.

Without an English government, regions of the “former” England who are unfortunate enough to experience financial crisis could find themselves in an isolated position, competing with the Welsh, Northern Irish and Scottish governments for financial aid.  This will run the risk of serious consequences, not just to the individual region, but to the UK as a whole. Sterling could appear unstable to world-wide financial markets.

To see the likelihood of this occurrence, you need only remember back to when the UK Treasury had to underwrite UK in order to reassure the financial markets in January 2014 debt because people suddenly thought the YES vote could win. Another example was the adverse reaction in the money markets to Alex Salmond’s hints that Scotland may not pay its share of the UK debt if denied Sterling . Internal financial arguments within the UK will inevitably impact on the value of Sterling in the money markets.

Linking ‘collective decision making with decentralisation’ will require courage from Labour Politicians. They would have to ignore the SNP mantra that England is too dominant and must be broken into smaller pieces. The Scottish nationalist agenda is clear – they would like to see England effectively “erased”, with a view to dealing with smaller regions over which they would have an economic and strategic advantage. If Labour can ignore the SNP then they will see that giving England a collective voice will lead to rational policies that link taxation and spending with accountability for all within the UK . One way that Labour can outmanoeuvre the SNP is by creating an English Labour party that oversees and ensures that England speaks as a whole whilst decentralisation occurs.

However, before this can be implemented it is vital that these political leaders accept that there is a distinct difference between the 3 Celtic countries of the UK and local government within England . Political leaders must spell out urgently to all the nations of the UK exactly who the lender of last resort will be in the event of a financial crisis. If the UK breaks up and several independent countries emerge, the Bank of England would cease to be the bank of last resort for Wales , Northern Ireland and Scotland – England would be under no obligation to bail them out. The only responsibility for English taxpayers would be to England at that point. This is partly because the smaller, devolved UK nations are financial loss-makers, something that was confirmed in the House of Lords report 2009 when it discussed funding issues of the UK .

It is also obvious to those who want to see it, that 85% of the UK ’s taxpayers live in England and are the main contributors of tax revenue for the whole of the UK . This final point needs to be firmly established as it is the Achilles heel for the SNP. Scotland would think more carefully about the question of independence if it were not clear who would bail them out in the event of a financial crisis, a point we have seen used in the run up to the Scottish Independence Referendum.   Combining the two approach will help to answer the ‘fiscal accountability’ question, but it will tackle the unfair allocation of resources and spending across the UK as well. If the Labour Party has the courage to adopt a National Federalism for the UK then they will ensure that their beloved localism will flourish along with their return to power. It an opportunity that the Labour Party cannot afford to miss.