The English Question: Let battle commence

Today's Journal column on the aftermath of the Scottish referendum vote.

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AND so….as one of the big arguments in British politics is settled – perhaps for a generation or more – another, potentially even more fractious one begins.

Scotland may have voted no to independence on Thursday by what, in the end, was a bigger-than-expected margin, but the debate over what to do about the ‘English Question’ is only just getting going.

David Cameron will no doubt have been mightily relieved as he appeared on the steps of 10 Downing Street shortly after 7am yesterday to express his delight at the Scots’ decision to stay.

Had the vote gone the other way, the Prime Minister could just as easily have been announcing his resignation, such were the catalogue of tactical blunders which almost led to the break-up of the 307-year-old Union.

But it was not what Mr Cameron said about Scotland yesterday morning than what he said about England that was chiefly of interest in this part of the world - or, more precisely, what he didn’t say.

The morning after the referendum, in an impressive show of unity, The Journal joined together with its traditional rival on the news-stands to demand increased powers and funding for the North of England

Significantly, those now making the case for this also include the Tory MP for Hexham, Guy Opperman, who said on Wednesday that the region must be “first in line” for devolution following the Scottish vote.

But it is far from clear from Mr Cameron’s comments yesterday whether, at this stage, the option of additional powers for England’s cities and regions is even on his radar.

For all his talk of wide-ranging constitutional change, Mr Cameron appears instead to favour a rather minimalist answer to the English Question, namely ‘English votes for English laws.’

This idea, which would essentially bar Scottish MPs from voting on English-only matters at Westminster, was part of the last Tory election manifesto but vetoed by the Lib Dems from inclusion in the Coalition Agreement.

But while this may be the solution favoured by most Tory MPs, it is unlikely to find favour with the Labour Party and will emphatically not address the “democratic deficit” within the English regions.

Indeed, without some corresponding measure of regional devolution, it would leave the North even more at the mercy of domination by London than has hitherto been the case.

The other big point at issue in the fallout from Thursday’s vote will be the future of the Barnett Formula, which still hands Scotland an extra £1,623 in public spending per head than the UK average.

The three main party leaders’ absurd last-minute pledge to continue it in perpetuity will surely - and rightly – be blocked by English backbench MPs.

The formula – as its creator Lord Barnett has long realised – has been out of sync with relative need for many years and is long overdue for abolition.

In any case, a genuine ‘devo max’ settlement for the Scots, with full control over levels of income tax, would surely render the formula unnecessary in the longer run.

But while this vexed issue will doubtless fill many more columns before it has run its course, it would be wrong to conclude this one without some mention of Gordon Brown.

If Mr Cameron, through his initial complacency and inattention to vital details such as the wording of the question, came close to the being the man who lost the union, then his predecessor at No 10 was the one who saved it.

In the closing days of the campaign, the former Prime Minister managed to do what nobody else had managed up to that point – to make a compelling emotional case for Scots to stick with the UK together.

By appealing to traditional Labour values of solidarity and sharing, he managed to stem the haemorrhaging of support to the Yes campaign that had briefly threatened to become an avalanche.

As others have pointed out, it is time for some historical reappraisal of Mr Brown, who as ITN’s Tom Bradby said yesterday, can now credibly claim to have saved both the financial system and the Union.

Tories may deride him as a “failed Prime Minister,” but he was not, he was merely an electorally unsuccessfully one.

It was his great misfortune to get the job in an era where presentational skills had become increasingly important, and sandwiched between two showmen like Tony Blair and Mr Cameron, those were skills he self-evidently lacked.

One thing he has never lacked, though, was passion.  And he certainly put it to very good use in the cause of keeping our country together.

Barnett calls for his formula to be scrapped (again)

Poor old Joel Barnett.  He would no doubt like to be remembered for being an effective Chief Secretary to the Treasury in the Callaghan government and for being, along with his old boss Denis Healey, one of two surviving nonagenarians who served in that administration.

Instead his name is forever linked to the wretched funding formula which he devised in 1978 as a short-term fix and which, 36 years later, still ensures average public spending per head in Scotland is some £1,600 more than in England and Wales.

Barnett has long been embarrassed by his formula and first called for it to be scrapped when appearing before the Treasury Select Committee in 1998.

In 2004, he went further, calling for his name to be taken off it.   This was reported at the time by myself and my then Journal colleague David Higgerson and our story can still be found at an online archive.

Now he has repeated his call in the wake of the absurd pledge by Messrs Cameron, Clegg and Miliband to guarantee the formula's survival in perpetuity in the event of a no vote to independence in tomorrow's referendum.

He told The Telegraph: "It is unfair and should be stopped, it is a mistake. This way is terrible and can never be sustainable, it is a national embarrassment and personally embarrassing to me as well."

Lord Barnett is now 90.   Is it too much to hope that he may yet live to see his wish fulfilled?

Barnett Formula pledge is undeliverable and wrong

I was dismayed to read that the party leaders - and Gordon Brown - have pledged to continue the Barnett Formula as part of their three-point 'guarantee' to Scottish voters ahead of Thursday's referendum.

The formula, which gaurantees Scotland a higher level of public spending per head than anywhere else on the British mainland, has been out of sync for many years and, as the former Welsh Secretary John Redwood points out, is particularly unfair to Wales and the Northern English regions which have similar levels of need.

It won't alter my support for the Better Together campaign, but the future funding arrangements for the different parts of the UK need to be based on a new assessment of relative need, not a short-term political fix.

My suspicion is that the pledge will actually be undeliverable.  I can't imagine for a moment that
English MPs will stand for it in the long run, even if they are keeping their mouths firmly shut at the moment for fear of playing into the hands of the Yes campaign.

The politician who should be most ashamed of himself for allowing this absurd pledge to form part of the last-ditch appeal to wavering Scottish voters is Nick Clegg, whose party has previously called for the replacement of Barnett with a needs-based formula.   Given Clegg's track record of U-turning on previous agreed party policy, however, perhaps we shouldn't be too surprised by this.

In any case, the new powers envisaged for the Scottish Parliament, including the ability to raise their own taxes, ought to enable Scotland to move closer towards financial self-sufficiency rather than continuing to rely on block grants from Westminster.  In this sense, maintaining the Barnett Formula in perpetuity would fly in the face of the moves towards federalism that Gordon and others are now belatedly advocating.

3pm Update:  It seems they are not keeping their mouths shut after all.   I very much fear that the pro-Union campaign is going to fall apart over the next 24 hours as a result of this stupid and unnecessary attempt to bribe the Scots.

Another nail in the coffin of Barnett

I sometimes wonder how many times the noble Lord Barnett will have to disown his own formula, and how many critical reports on the infamous system of regional funding will have to be published, before the government finally decides to do something, but hopefully the latest intervention by a House of Lords committee will nudge things another few centimetres in the right direction....

All quiet on the Barnett front

Why has it all gone quiet over the Barnett Formula? And could it be anything to do with Glasgow East? Here's my column in today's Newcastle Journal.

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Earlier this year, a brief flurry of excitement went around the Westminster village that Gordon Brown might be about to do something that few thought possible for a Scottish PM.

The Treasury had ordered a study into the workings of the controversial Barnett funding formula which governs the allocation of public spending within the UK - surely a precursor to its eventual abolition.

At the same time, Labour, the Tories and the Lib Dems agreed to set up a Commission to look at the Scottish Parliament’s powers and funding, likely to include consideration of whether the Scots should move towards greater financial self-sufficiency.

Could the 30-year-old formula, long a source of disquiet in the North-East on account of the tens of millions of additional spending it awards to Scotland, finally be on the way out?

BBC Political Editor Nick Robinson certainly thought so, proclaiming on his blog that "the skids appear finally to be under the Barnett Formula.”

I myself was slightly more circumspect, commenting on these pages that the long battle for a fair funding deal for the North-East still had a way to go yet.

Since then, though, nothing. Maybe Mr Brown has thought better of it. Maybe the various reviews, studies and commissions are taking longer than expected to come to fruition.

Most likely, it's been put on the back burner pending the resolution of other political crises requiring more immediate attention.

The issue, of course, has not gone away. This week's report by the regional think-tank ippr north once again underlined the case for reform.

It found that although the gap between Scotland and the North-East in terms of public spending has narrowed in recent years, it still stands at £716 per head.

The report's main author Guy Lodge said the Barnett formula was no longer "fit for purpose" and should be replaced.

"It does not result in a fair distribution of spending, and is becoming an increasing source of tension between the nations of the UK," he added.

In its response to Thursday's report, the Treasury certainly gave little indication that anything was about to change.

It said there were "no plans" to change the Barnett formula, describing it as "a fair allocation which reflects population shares in the different nations of the United Kingdom" - which is pretty much what it's been saying for the past 11 years.

But whatever the reason behind the apparent lull in government activity around the issue, it is doubtful that much more is going to happen in the next fortnight at least.

Why? Because on July 24, voters in Glasgow East will go to the polls to elect a successor to Labour MP David Marshall, who resigned his seat on the grounds of ill-health last month.

Like Crewe and Nantwich, like Henley, this was undoubtedly a by-election that Mr Brown could have done without.

The main opponent will be Alex Salmond's Scottish Nationalists, and even the slightest movement on the Barnett Formula is bound to be exploited.

Mr Salmond, indeed, got his retaliation in early in his response to Thursday's report, saying: "It is abundantly clear that the motivation of both Labour and the Tories on this issue is slashing Scottish spending."

He claims that, far from being subsidised by England, Scotland's oil revenues are actually subsidising the rest of the UK to the tune of £4.4bn a year.

Does Glasgow East represent any sort of threat to Mr Brown, given that Mr Marshall had a majority of 13,507and had held the seat for Labour since 1979?

Well, ordinarily, no - but these are not ordinary times and the Prime Minister's record in by-elections thus far hardly inspires confidence.

Furthermore, there is one aspect of the Glasgow East contest that carries a particular danger for Mr Brown - the fact that it is taking place in his own Scottish political backyard.

If he can't win this one, Labour MPs will justifiably start to wonder whether he can actually win anywhere.

Mr Brown can at least take comfort from the fact that the by-election is taking place two days after the start of the summer Parliamentary recess, reducing the scope for plotting.

But the fact that even Harriet Harman has been talked about during the past week as a possible replacement demonstrates the extent of the trouble the Prime Minister is in.

My guess is that Labour will hang on, and that the immediate danger for Mr Brown will recede until the start of the conference season in September.

But as for the future of the Barnett Formula, the Prime Minister finds himself as caught between a rock and a hard place as he ever was.

It was, I think, always Labour's hope that it could safely ignore the problem, and that the formula would simply wither on the vine as spending between the different parts of the UK gradually converged.

It has now become clear, though, that this process will take so long that unless something is done sooner, the union could well fall apart in the meantime.

Reforming the Barnett Formula might have been one of the many radical things that Mr Brown dreamed of doing once he got to Number Ten.

Now he's there, though, he has found himself far too preoccupied simply with staying alive.

At long last....

Just when you thought that the Brown Government was going to do absolutely nothing to address the English Question...up pops today's Telegraph with the revelation that that Prime Minister has ordered a review of the infamous Barnett Formula.

The figures on how the formula awards Scotland an extra £1,500 per head in public spending per year speak for themselves, but a good practical example of how this operates was recently uncovered by the Newcastle Journal which revealed that the £16bn Crossrail project would automatically mean an additional £1.6bn for Scotland - irrespective of whether it needed it.

I have to confess I had given up hope of anything being done about it this side of the general election. In a Journal Column last November, I argued that Labour's real opportunity to reform the formula came in 1999/2000 when the party was riding high politically and public expenditure as a whole was rising so sharply that the adjustment could effectively have been concealed. Now, the politics of the situation have changed utterly, with the SNP now very much in the ascendant, while public spending is no longer rising anything like as fast.

I can only imagine that Mr Brown has either become convinced that the formula is wrong in principle - a view that would be hard to reconcile with his treatment of the issue while at the Treasury - or that he has concluded that the rising level of English discontent over the issue outweighs the obvious political risks from north of the border.

March 6 update: There appears to be some doubt over whether the Telegraph story is actually true, but if so I wouldn't blame the newspaper for that. The Government has been speaking with a forked tongue over this issue for at least a decade. My hunch, for what it's worth, is that while there may be no changes planned to the BF as yet, something is rumbling in the Whitehall undergrowth.

Gordon Brown and the sound of chickens coming home to roost

Today's weekly column picks up on David Cameron's latest attempt to address the English Question, but focusing less on his pledge to create an "English Grand Committee" and more on the background to how Labour got itself such a mess on the issue.

Of all the politicians in the UK, Gordon Brown bears more responsibility than any for the ongoing "English backlash," given his repeated refusal to reform the grossly iniquitous Barnett Formula despite a critical Treasury Select Committee report on the issue as long ago as 1999.

In my column, I argue that Labour had a great opportunity to tackle Scotland's disproportionate share of public spending under the formula in 1999/2000 when the party was riding high politically and public expenditure as a whole was rising so sharply that the adjustment could effectively have been concealed.

That opportunity has now been lost. The politics of the situation have changed utterly, with the SNP now very much in the ascendant, while public spending is no longer rising anything like as fast.

"New Labour’s refusal to reform the Barnett Formula when it was in a position to do so is a metaphor for its entire performance in government. It had two majorities of 160 plus. It was faced by an opposition which wasn’t capable of running a whelk stall. It had a chance to do difficult but necessary things for the long-term benefit of the country. And it didn’t do them."

The piece can be read in full on my companion blog HERE.

English Votes by English Laws by just another name

I'm with Gareth Young rather than Iain Dale over the Tories' plans for an "English Grand Committee" as set out in yesterday's Observer.. With all due to respect to the superior intellect of Sir Malcolm Rifkind, this is simply the old policy of English Votes for English Laws dressed up in new clothes.

As Gareth points out on the Campaign for an English Parliament Newsblog, not the least problematical aspect of the proposal is the idea that the Speaker would have to rule on which bills, or parts of bills, were English-only, or English-and-Welsh-only on those areas which are devolved to the Scottish Parliament but not to the Welsh Assembly.

"If, as suggested, it is up to the Speaker to decide what is and what is not English legislation then the impartiality of the Speaker will be compromised. A brief look at Gorbals Mick’s record on impartiality should alert people to the dangers of this. Even if it were up to some higher, or more impartial, authority than the Speaker to designate bills as English-only then it would inevitably cause arguments before the bill is even drafted."

To be fair to Iain Dale, he is a supporter of the CEP and he argues that an English Grand Committee would be a stepping stone towards that eventual aim. Possibly in the longer-term, but I would argue that in the shorter-term, the introduction of further assymetric devolution into the constitution will actually make things worse rather than better, and make it more likely that the end of all this will not be a union of four equal autonomous nations but four wholly independent states.

That said, the distinction between an English Grand Committee and an English Parliament will probably be lost on most voters. The Tories will doubtless get some public support for this, simply for being seen to do something about the problem while Labour continues to bury its head in the sand.

The upside for Labour is that, with the next election not due until 2009, Gordon Brown has 18 months to expose the policy as unworkable, and maybe even to come up with an alternative proposal that is, although if I knew how he could dothat without handing his Scottish heartland over to the SNP lock stock and barrel, I'd probably be sitting in his chair.

Scrapping the Barnett Formula would take much of the current heat out of the issue, but Brown cannot now do that without handing a huge propaganda victory to Alex Salmond. The sensible time to have done it, as he was warned at the time, would have been in 1998/99, when Labour was still reaping the benefit of the devolution dividend.

I have taken a fair amount of mockery down the years for taking an interest in this subject - when my son was born the joke in the Lobby was that he would be fed on Barnett Formula Milk - but I always knew it would become a big political issue one day, and now it has.

Barnett strikes again

They've abolished tuition fees, introduced free eye care and dental check ups, dualled "their" bit of the A1 between Newcastle and Edinburgh, handed out extra central heating grants, brought in free personal care for the elderly....and now the Scots are getting rid of prescription charges as well.

There's always a price worth paying

"Unemployment is a good and fair price to pay for low inflation."

- Norman Lamont, 1992, House of Commons. *

"Are you saying that lost North jobs are an acceptable price to pay to curb inflation in the South?" "Yes, I suppose in a sense I am."

- Sir Edward George, 1998, in reply to a question from yours truly.

"If you want to keep the union together, the Barnett Formula is a small price to pay,"

- Tony Blair, 2007, speaking at the Liaison Committee of senior MPs.

* Unclear as to whether this was his own phrase or one written for him by his researcher, D. Cameron.

Is Middle Britain finally starting to wake up to Barnett?

The Barnett Formula is usually presented as an item of political arcania of interest only to those of extreme anorak tendencies, but today's Daily Mail front page about the consequences of Scotland's great public spending power demonstrates that it is not.

As I have been arguing for most of the past decade, both on this blog and in numerous columns in the Newcastle Journal, the fact that public spending north of the border is some £1,200 per head higher than in England has real implications for real public services that affect real people. It was only a matter of time before someone came up with a really emotive example that brings the story to life, and the row over blindness drugs has seemingly done that.

What is set to make the situation even more combustible is that the new Scottish First Minister Alex Salmond is also highly critical of the Barnett Formula - not for the same reasons as many English MPs, but because he thinks it doesn't go far enough.

I've been saying for a long time that, one day, the need for reform of this unfair and outdated formula will become a political issue of the first order. I suspect I won't have that much longer to wait.

Why Ken Livingstone is right about the Scots

Source: Public Expenditure Statistical Analysis, HM Treasury, May 2006. Hat tip for graphic: Conservative Home.