Devolution: A Decade On - Justice Committee Contents


Examination of Witnesses (Questions 120-140)

RT HON KENNETH CLARKE MP, LORD TYLER CBE AND PROFESSOR VERNON BOGDANOR

19 FEBRUARY 2008

  Q120  Chairman: London can actually make its own decisions about crime and about the congestion charge—not about the Health Service, but it has its own democratic process.

  Lord Tyler: Chairman, that is precisely my point. That reinforces the resentment outwith London that London, where all this power lies anyway, seems also to have that extra dimension.

  Mr Clarke: It has no powers over the Health Service. I come from the East Midlands, my constituency is in the East Midlands, and actually that is where I come from as well. That probably affects my view. There is no part of the United Kingdom where regional consciousness is weaker than in the East Midlands. The inhabitants of Corby do not associate their interests with those of the inhabitants of Skegness and it is a completely debunked concept. It is what is left over when you have defined other regions, so I think I probably come from the part of the country where there is least demand for regional government and where the abolition of the regional assemblies is popular. If people ever noticed the existence of the Assembly, they are now welcoming its dismissal. If you wished to go to more devolved power locally, which I would like to actually, you have got to go to the smallest possible local unit that is practical and efficient and will be in contact with the residents. Their county is pretty big, but the idea that some regional body that does for Northamptonshire and Lincolnshire as well is just ridiculous to my constituents and they are not interested in it. The Government knew that and so they, therefore, went to the North East, where I would have thought that regional feeling was as strong as in Lord Tyler's South West. In fact the people in the North East preferred a more local system of local government and feared the bureaucracy of regional government and I think regional government is pretty dead in England now. It would be a very reckless government of any complexion that tries to revive it, whereas more devolved local power is called for. The snag is, as someone who has done some of the jobs you have touched on, the fact is that people are all in favour in principle of devolved responsibility but, as Alun knows, they go straight to the Secretary of State, or the First Minister, or whatever, the moment the local variation that has been decided on is in their opinion, out of line with their own preferences.

  Q121  Chairman: We are going to come back to some aspects of this in a moment, but I want to ask you, since you make the point, do you now feel that the creation of a regional tier of administration so that certain policies are dealt with on a regional basis, which happened, of course, under the Government of which you were a member, was unnecessary or mistaken?

  Mr Clarke: We had some regional offices, and I used to agitate for a regional office for the Government, and Michael Heseltine did, but it was in the very narrow context of urban regeneration, inner city policy, all that kind of thing, which, you remember, was in its embryonic and controversial days in the late 1980s and whilst we were in office in the early 1990s as well. That was because we found there were little local offices of departments who tended to compete with each other even more ferociously than the headquarters of different departments competed with each other. Michael Heseltine and I, I think you would agree, had a somewhat naive view that we should just have one office to help co-ordinate policy and look rather more—an awful phrase I never use—holistically, as it were, at the relationship between the government and the region. In fact, the present government, when it was in its phase of driving towards regional government, made these regional offices of government far too powerful and you found there were officials regarding themselves as in an executive role in delivering lots of government policies in their region. That is why I would now give more power to the local authorities we have got and argue about what tier it should be rather than go for any more regional government.

  Lord Tyler: Chairman, I do not think we should let Kenneth Clarke get away with just simple naivety.

  Q122  Chairman: He is not as naive as he looks!

  Lord Tyler: No. I never thought of him as being naive, but, clearly, there is a distinct difference between the way in which Britain has developed regional administration, governance, without any real accountability over the last 40 years—it goes back at least as long as that—at the very same time where comparable countries in other parts of the world, notably in Europe, have moved away from that degree of centralisation and colonisation, sending colonial government out to the different parts of the United Kingdom; and all the great command economies of Europe have decentralised very effectively with local accountability, some of them, of course, under the influence of British constitutional lawyers, while we have not taken our own medicine. I think that the trend of recent years, of which, of course, devolution to Scotland and Wales where there is significant divergence, has not been applied in the rest of the United Kingdom.

  Professor Bogdanor: Can I get back to the point about London, Chairman, because I think it is very important. The new arrangements in London have meant that people now identify more with London than they do with England. There is an IPSOS-MORI poll from 2004 which shows that 65% of Londoners identify with London, and 57% with England. I take this to mean that the feeling of not being noticed, the sense of alienation, has lessened when you have a powerful figure such as the Mayor to speak up for you in London. Therefore, I believe that one practical answer to the English Question is to establish directly elected mayors in other conurbations in England so that there is someone who speaks, not just for London, but for Manchester, Leicester, Nottingham and all the other major cities of the country. I think this lies at the root of the English problem. It is not primarily a constitutional worry—that is a matter that concerns only academics like me—it is a political one.

  Chairman: Mr Kawczynski, do you want to ask at this point about the select committee?

  Q123  Daniel Kawcyznski: Actually it was a supplementary. Mr Clarke, you mention the East Midlands. Could I tell you that in the West Midlands, if you represent a seat like mine, Shrewsbury, which is right on the border with Wales, this issue of the difference between Wales and England is magnified to a huge degree. I have to tell you that I am constantly fighting for my constituents to get the same type of treatment at my local hospital that people get from coming across the border from Wales, and also you can get certain operations coming from Wales which my constituents cannot get. Also, the hospital loses nearly three million pounds a year because of the different rates that the Welsh authorities pay to the English authorities. How would you deal with the border areas such as mine, which really are facing significant financial difficulties as a result of devolution?

  Mr Clarke: I think the biggest hostility to the idea of devolution tended to come from the border areas. Devolution had been debated almost forever in this House before it finally happened, and in my experience, certainly so far as the Labour Party was concerned because they had more people up there, they had more trouble with the North East and northern Members of Parliament than they had with anybody else in trying to make progress with Scottish devolution, and the same is true of Wales, and you are bound have border problems. It is a magnified version of what I say is the difficulty. Even on lesser matters, you give more discretion to the local government, which everybody says in principle they are in favour of. The moment you give it, people talk about the postcode lotteries and start arguing about deviations which they see taking place across the border next-door. They go rushing off to the Secretary of State, or, if they cannot get to him directly, their Member of Parliament to insist to the Secretary of State that uniformity should be imposed. I am now totally reconciled to Welsh devolution, I do not think it would be totally remotely sensible to try to reverse it, and I think these border strains are bound to continue, and so I sound a bit like Professor Bogdanor saying that some of this is just the inevitabilite. If one should have a slightly different system on two sides of a border, you are going to find that on one side of the border, and it may not always be the same side, people are going to get irked by comparisons that they make with what is happening on the other. I do not think your constituents will be cheered up by anyone saying that the solution is to make you much more under the control of a regional government based in Birmingham. I suspect they would prefer London, by and large, to being under the governance of Birmingham.

  Q124  Daniel Kawcyznski: I think you are right here.

  Mr Clarke: In my case it would be Nottingham where the headquarters would be, but I do not think the inhabitants of Derby, Leicester and Northampton or rural Lincolnshire would be remotely happy with having to put up with a regional government in Nottingham.

  Chairman: Do you want an opportunity to deal with the Committee point, Michael?

  Alun Michael: Yes. Can I mention for the interests of the Committee, the Welsh Affairs Select Committee, on which two of us sit, is looking at cross-border issues at the moment and there might be some interesting resonance between the work of that select committee and this one.

  Q125  Daniel Kawcyznski: Thank you. I just wanted to follow up with a question on the Select Committees. Mr Clarke mentioned the West Midlands Select Committee. We would not necessarily like to be run from Birmingham, he is absolutely correct in that, but could I just say that nothing has happened over the last six months. The Government said that we would have Regional Select Committees. Nothing has happened. They have not been created. The Regional Minister for our area from Hodge Hill, Liam Byrne, has never been to Shropshire, and it took a debate I had to have in Parliament to get him to agree to come down. He is very focused, in my estimation, on Birmingham, which is the area he represents, and rural counties such as mine feel very neglected if we have this regionalisation. My question is really, if the Government says it is going to have Regional Select Committees, surely the Regional Ministers, which in our case is Liam Byrne, should be given proper offices to run this job properly and be accountable to all the areas rather than just having it in theory and then not having anything done?

  Mr Clarke: I regard it as a gimmick and public relations to have appointed a minister for each of the regions. It was the time of "the big tent", the new harmony, the father of the nation and the acknowledgement that people need to feel government more in touch with them. We have had two regional ministers in the East Midlands so far. I have only just discovered what the name was of the first one and I cannot remember the name of the one we have got now, but the previous minister did no harm and, as far as I am aware, she has moved on to a different department and has a sensible job. The last thing I would do is start giving them money and officials and an office to do their regional bit. That is probably because I have problems with regional government, and I feel sorry for these parliamentary secretaries. We did get ministers attached to cities when we were in, but they were attached to the taskforces in inner city areas, and I used to bully my colleagues who had drawn the short straw and had volunteered to do this to go in once every six months. There were some very good and marvellous projects but it was a particular little aspect of policy we asked them to devote their time to in addition to their ministerial roles. The Regional Ministers that we have got now all already have what should be full-time jobs in departments which they combine with their constituencies and they have got executive tasks to carry out, they have got legislation to take through this House. They have other real full time jobs, and I think the additional roles of regional ministers were invented jobs with no facilities, no clear idea of what they were meant to do. I think what they are supposed to do is get their name in the local newspaper, particularly near the more marginal seats from time to time, but I would like to see it all gently fade away as an experiment.

  Q126  Chairman: Could I ask Lord Tyler if he thinks the Select Committees have any importance or are, indeed, manageable within the parliamentary system?

  Lord Tyler: As an ex MP rather than a present one, I am rather hesitant to talk about the way in which your House deals with these matters, but the fact is that it has not been possible to set these up for six months because it has been so difficult to find members to serve on them who are not going to be, frankly, government members in many cases way beyond the natural representative proportions of that particular region. For example, in the South West it would be very difficult to have enough backbench Labour members sufficient to man that committee. This is one of the reasons why I think this has not happened. I think the major point is, surely, from the point of view of the House of Commons and devolution more generally, this is no substitute for holding to account the government office for that region and the development agency for that region. Having a minister or a select committee occasionally looking over the books, as it were, is not a sufficient degree of accountability and, therefore, I do not necessarily subscribe to the gimmick description, but it certainly has proved to be an inadequate answer to a very real question of real devolution, real decentralisation within England.

  Q127  Julie Morgan: I wanted to ask you what you thought of the idea of an English Parliament and what would be the strengths and weaknesses? This is to all of you really.

  Professor Bogdanor: I think an English Parliament would be an absurd solution, and I do not think it would reduce the sense of alienation. If an English Parliament were to be sitting in Luton or Bradford, that would not make people feel that they were better represented than they are now. There is no federation in the world, to my knowledge, where one of the units contains 85% of the population. Many years ago the Royal Commission on the Constitution, which reported in 1973, looked at this question and said it was simply not a practicable proposition. Nothing has changed since that time to alter that verdict.

  Mr Clarke: I am against an English Parliament. I think it would rapidly lead to demand for an English Executive on devolved matters, which is what the Scots have got and the Welsh have got. I actually think it would be a threat to the union steadily, because it would start giving 85% of the population now their distinctive, separate institutions. I think there is no wide English demand for a separate Parliament at all. There is a little group that would like one, but the average Englishman thinks that they have got a Parliament, which is the Westminster Parliament. I think resentment could certainly well be sorted out so long as you could tackle what I regard as this niggle that sometimes English matters are settled against the majority votes of the English MPs. An English Parliament, I think, would be quite a dangerous remnant of that because it would take a little step further this sense of separate identity. I have to say, the Nationalist MPs in the other parts of the United Kingdom, particularly in Scotland, to whom I defer in their political skill—I think our old colleague Alex Salmond is an extremely skilful politician—lose no opportunity to accentuate on both sides of the border any sense of separate identity between the Scots and the English, any twinge of resentment that the English feel against the Scots, just as much as any twinge of resentment that the Scots feel against the English, and an English Parliament within a separate English executive would be going down a path which I suspect the Scottish Nationalists would approve of much more than me.

  Lord Tyler: I agree with both my colleagues here. I think we must recognise that the English Parliament would automatically need a separate English administration and a separate English Executive. I do not think there is any public demand for that, and the complexity that would be caused by interrelationship not just with the United Kingdom Parliament but with the United Kingdom Government would be so wasteful in terms of resources and energy that I think it would very soon be decided that we should dispose of it again, and of course it would be absurd. I do not think that there is a public demand for that. There is, however, as I have already suggested, a very considerable concern in various areas of England that they are not well served by the present levels of responsibility within our hierarchy of governance. I support, and I think many people do, the general principle of subsidiarity that decisions should be taken as close as possible to the people they are going to affect, and having a separate English Parliament in London or on Runnymede Island, or wherever, is not going to answer that question.

  Q128  Julie Morgan: Could I ask Kenneth Clarke if you agree with Sir Malcolm Rifkind's proposals for "English votes for English laws"?

  Mr Clarke: No, I do not, but our taskforce has not quite finished its report yet.

  Q129  Julie Morgan: Are you considering that in your taskforce?

  Mr Clarke: Malcolm and I, as you may gather from my opening statement, are broadly agreed that the question should be asked and should be answered. I do not agree with the remedy that one should stop asking the West Lothian question, which has been said by various people, and Malcolm has come up with one answer. I do not think our taskforce would come up with exactly the same answer as his but in principle we are heading in the same direction. When Malcolm recently made the news with his solution, I was familiar with is as, he had put it forward on several occasions—it is one way of tackling it. All my taskforce is doing is giving advice to David Cameron and the Shadow Cabinet—I am not spokesman for the Conservative Party, it is for David Cameron and the Shadow Cabinet to decide what the policy is. They have got Malcolm's proposal before them as well, so they can compare it themselves when they receive ours.

  Q130  Julie Morgan: Do you think that the next Conservative manifesto will address the English Question?

  Mr Clarke: I do not know. I would not want any responsibility for the next Conservative manifesto, but my guess, however, is, yes, it will. As a Conservative Member of Parliament, I would be very surprised if we put a manifesto forward at the next election which did not address the West Lothian question. Just to make it clear that our position on devolution, is, I trust, on balance, to accept devolution—there is no question of reversing devolution. With hindsight, we made a mistake in being so reluctant so long in allowing devolution to take place.

  Lord Tyler: I think the Rifkind proposal is absolutely absurd. It would be a constitutional minefield. Just to take a couple of examples, suppose legislation is going to be sent to a Grand Committee, an English Grand Committee, but it is then discovered, as a result of some amendments during that process, whether it is in committee or at some other stage, that there are elements which affect Scotland and Wales, what do you then suddenly do? Do you take it out of that committee and create a new committee? What do you do when it comes to the Lords? Nobody seems to have addressed this question. I understand there is reference in the note which I understand members of your Committee, Chairman, have seen. Are we to have a unicameral system for England, or bicameral? If it is to be bicameral, do Scottish peers get excluded from all the debates on that issue? What happens if there are amendments in the Lords which seem to impinge on Wales? Quite a lot of English law impinges on Wales in a way that it does not on Scotland. Away you go. What if there is some reference to transport which does not really seem to fall within the purview of that committee as far as London is concerned, because London has specific transport? It is a minefield and, in particular, it seems to me it would draw the Speaker into some invidious decision-making which would be completely outwith the present role of the Speaker. It would make him intensely political, particularly, of course, as it might well be the case that English members of Parliament had a majority for one party which was different to the majority for the United Kingdom party as a whole. Given that there is already, of course, a curious anomaly in the first past the post system that one party gets more votes than another in England and yet gets less seats in the House of Commons, the opportunities for real political conflict and gridlock will be greatly increased by the Rifkind proposals, and I am amazed that any such experienced parliamentarian should put it forward.

  Professor Bogdanor: I believe that Lord Tyler has understated the difficulties. I think it would be actually profoundly dangerous to the future of the United Kingdom, because if you have one party with a majority in the United Kingdom but another party with a majority in England, the government with the majority in the United Kingdom could not say it had a policy on health or education because that would depend on what the English MPs thought. Sir Malcolm Rifkind tries to get round that by saying the Grand Committee will just consider the committee stage of bills, but that would mean on almost every occasion on a matter of education or health, when a bill was reported out the majority of Parliament would disagree with the Committee's report and so you would get gridlock—the sort of thing that has existed in the United States you have had in America since 2006 with a Democratic Congress and a Republican President. It would bring government to a halt. I think it is significant that the only other party that is championing English votes for English laws is the SNP, because it wants to separate Scotland and England, and, I must say, I profoundly hope that the Conservatives, who are a unionist party, do not go down that road. There is one further point to make, which Lord Tyler hinted at, that this problem arises primarily from a political imbalance in Scotland. If the Conservatives and Labour Party had roughly equal seats in Scotland, this problem would not arise, and perhaps it is worth thinking back to 1955 when the Conservatives had not only a majority of seats but a majority of the votes in Scotland in that general election.If we could get back to a more equal position for the Conservatives, if this could gain more support in Scotland, or, alternatively, as Lord Tyler has hinted, if the electoral system were to be changed so as to reflect opinion more accurately in Scotland, this problem would not arise. I think it would be wrong to have a complete upheaval of the British constitution to meet that particular political problem. As I said a moment ago, I profoundly hope that the Conservatives, who are a unionist party, do not go down that road.

  Mr Clarke: Can I briefly come back, Chairman. I answered the narrow point. I do not agree that the English Grand Committee is the way of going forward. That is what I took to be Malcolm Rifkind's proposal. My two colleagues have actually put it much broader and have pronounced by answering the West Lothian question in general, giving their objections to it. I do not agree with either of them. I do not believe this argument that it is not possible to identify a comparatively small amount of legislation which is totally English in its consequences and content. In fact, a select committee of this House in 1999 recommended that we should start more clearly identifying the territorial application of legislation, which is now being done. If you look at, nowadays, the Queen's Speech, it usually identifies which country's legislation it applies to. I have seen bills produced where individual clauses tell you which they identify to. We do not pass legislation where subsequent high court proceedings begin with submissions from both sides as to whether this bill actually applies to the jurisdiction of Scotland or the jurisdiction of England and Wales; it is plain and obvious; and you will not get the Speaker into invidious arguments, in my opinion. That is my first point. The second one I have already made, so I will not repeat it greatly. I really do not see the whole thing as a great challenge to the union. In fact the challenge to the union is not yet a challenge but the point of view of unionists, as I am. The irritating thing is the mounting English resentment of this residual opportunity for governments to pass things against the English majority. I think, if we can, we should look at the party politics. I realise there are party sensitivities. I am not a great partisan in my old age, so I try to rise above it, but I understand why the Labour Party is more concerned than we are. At the present time, for the foreseeable future, you are not going to get a Conservative government in the United Kingdom which does not have an overall majority in England. It is impossible. It is conceivable, though it has not happened very often, that you might get a Labour government that does not have an overall majority in England. The chances of getting a Labour government in the UK but a Conservative overall majority in England is actually quite slight in modern politics, but the idea of a Labour government in the UK with no overall control in England could happen—probably will happen. There are two things we have to tackle, unless you are just a partisan that wants to stop such a UK Government being able to do anything in England. You have got to stop the deadlock, as described, you got have to stop the English MPs being able to wrest control from UK government altogether. You have got to give the Government the power, the Parliamentary ability to veto the English MPs running wild, but you must give the English MPs to opportunity to stop detailed English measures being passed that they do not approve of either. The English Grand Committee is one way of approaching it. But what should happen is the two will negotiate, as they do in America—they are used to that—the executive of one party and congress of another. It is not deadlock in the United states—they negotiate, they compromise: it is called politics. We are used to the tyranny of the majority party here, but compromise politics might be quite good for the English from time to time.

  Chairman: I have to remind the Committee and the witnesses that we have other witnesses to come who have different points of view from theirs. We will be questioning this very eloquent group of witnesses in about 10 minutes or so.

  Q131  David Howarth: Can I come back to this point about the electoral system. It seems to me that the electoral system lies at the heart of the problem, both in terms of the constitutional problem and the likelihood of there arising these differing majorities and in terms of alienation. Let us just take Ken Clarke's example of the student fees first. If the United Kingdom Parliament had been elected on PR, not any PR system, then there would be no fees, the majority would have had its way, and so, on the whole, these anomalies might arise under a PR system but they would be less likely to arise. On the second part of the question, as defined by Professor Bogdanor, the question of alienation, is not part of the problem that because of first past the post we inevitably elect unpopular government, but the Government is unpopular not because of what it does, it is unpopular on day one because only a third of the people voting have voted for them.

  Lord Tyler: Very briefly, I think there is a specific English dimension to this, which is, of course, that the first-past-the-post has given majorities to one party in recent years when the votes have gone in different directions, putting it mildly, and so I think there is a situation, and in a sense Ken Clarke has put his finger on it, that some of the frustration—I do not think it is widespread public frustration, but there is a political (small P) frustration that it would seem that the English Members of Parliament are not representative of views in England and, therefore, there is both a mood towards trying to be more decentralist in the way in which I suggested, but there is also a concern that we might end up with a situation where there was a considerable body of policy being developed for England that was extremely unpopular even in sheer party terms. In a sense the reaction to the English Question to those that feel strongly about this, whether it is for the Rifkind proposal or for an English Parliament, is let us have a separate executive because we think that might be more representative than the present UK-wide Executive. It is not about just having a debating chamber, a Grand Committee, because you cannot have a Grand Committee which takes decisions and nobody acts on those decisions; you have got to have some sort of administrative executive arm. It is a frustration about the disconnect between people's opinions in England and what is then served up by governments, and, clearly, whatever system of electoral reform was developed could improve that, but I do not think it is the whole answer because I think also there is the issue about decentralisation which is, I think, equally important.

  Professor Bogdanor: Mr Howarth is right to the extent that if you had a proportional system, the West Lothian question would not be as acute as it is, to put it mildly.

  Mr Clarke: No party would have an overall majority either. I am against PR. I think it is a very good discipline for the public. They are given two broad coalitions, three probably—

  Q132  Chairman: I do not think we have time to put the arguments for and against PR.

  Mr Clarke: —and they have to choose one or the other.

  Q133  Chairman: It was raised as a question because there were specific implications for what we are discussing here.

  Mr Clarke: I am not going to give you my view on PR. Belgium and Italy is good enough for me!

  Chairman: Even I will resist the temptation to demonstrate the fallacy of that argument by asking Dr Whitehead to move on to another topic.

  Q134  Dr Whitehead: In the context of the apparent rejection of some of the proposals—English Parliament, regional assemblies, regional select committees—Professor Jeffery suggested to us the one potential solution to the English Question would be simply to demarcate more closely the difference between England, Scotland and Wales and the rest of the United Kingdom by essentially giving devolved bodies more powers, further fiscal autonomy, and therefore, by default, as it were, the UK Parliament would become more an English Parliament. Is that a suggestion that has any merits, in your view?

  Professor Bogdanor: You would have to devolve legislative powers from Parliament, and I do not think even those who favour regional devolution favour the devolution of legislative powers to the North East and North West, and so on.

  Q135  Chairman: I do not think that is the basis of the question. I think the basis of the question is that if fiscal autonomy, for example, is given to Scotland, then there is a much clearer differentiation between Scotland and England.

  Professor Bogdanor: I am sorry, I misunderstood your question. I completely agree. One of the arguments against English votes for English laws is that the block grant that Scotland receives is decided at Westminster by decisions based primarily on English programmes; and you are absolutely right that if Scotland had fiscal autonomy, then the arguments against English votes for English laws would be weaker. I believe that it would be better for Scotland to have responsibility to raise the money that it has spent. It would probably mean better value for money: one tends to be more careful about spending money that one has raised oneself. It seems to me sound, canny and good government that a body that spends money should also be the body that raises it. I apologise for misinterpreting your question.

  Mr Clarke: The Scottish Government does have power to raise its own income tax, I think, but, very wisely, has chosen never to exercise it. I personally am not in favour of more fiscal autonomy. You would merely have the problem of the council tax writ large, I think, but in a country of this size fiscal autonomy is quite difficult to manage. Of course, I approve of local authorities having their present ability to raise their own revenue by council tax. The moment you go into any form of taxation of that kind you have got to find a base for it, and we always end up with a property tax as a separate base, and then, because of the different income and economic prosperity of different parts of the country, you have to have a national system of compensating grants to make it fair, and that is fatal to the local autonomy. It is true of every part of the United Kingdom that they believe they live in a county which is uniquely discriminated against by the central government grant system, and that feeling destroys all sense of accountability in the local authority. I know of no local authority that has got into trouble over spending, of whatever political complexion, which has ever said, "It is our responsibility." They always say, "It is the fault of central government for not giving us enough grant." Until you solve that problem at present local government level, I would not start wading into a fresh new tax to give autonomy to any regional body.

  Lord Tyler: According to the BBC, the Prime Minister said yesterday there is an issue about the financial responsibility of an executive or an administration that has £30 billion to spend but does not have any responsibility for raising that. In any other devolved administration in the world, there is usually financial responsibility that requires not only the spending of money by the administration but also its responsibility to take seriously how it raises money. This, I think, is a very interesting development. It goes a great deal further than anything he has said previously. This is in reportage, so I cannot confirm whether it is exactly what he said, but he is also reported as saying, "Mr Brown also said the review was not a one-way street and some powers could be returned to Westminster." I think that is a novel suggestion which would surprise some people. I agree very much with Professor Jeffery's analysis that some degree, not fiscal autonomy, as Ken Clarke says, but some degree of fiscal decentralisation is absolutely critical, because I think we are all aware of how frustrated are members of local authorities throughout the United Kingdom, I think, by feeling that they are simply agents of spending departments rather than that they actually have any room for manoeuvre. I think it answers to some extent, if you like, the Shrewsbury problem. It is not just that the spending on either side of the border is different but in England nobody feels that they have any direct role in deciding the priorities for that spending. I think that is a very important issue.

  Q136  Dr Whitehead: I was going to reflect briefly on Ken Clarke's point. We do, as a result, I think, have the most ferociously stringent financial equalisation system of any country in the world or state in the world except for New South Wales, I understand. Would an alternative route, and I wanted to offer Paul Tyler a moment to reflect on his written submission, as indeed you have said in your submission, be to radically decentralise power to English regions, possibly not with ferocious equalisation? What do you mean by radically decentralising power to English regions? Would you see it as a solution to a number of the issues that have been raised this afternoon?

  Lord Tyler: I touched on it earlier when I said I thought the accountability of two very important services as far as the public are concerned would be outwith any sort of public accountability. I see no reason why sub-regions rather than necessarily the regions that the Conservative Government set up, some of which are much more easily identified than those rather amorphous and indiscriminate boundaries, should not have responsibility for health, for police services, for planning, for development, and some of those may indeed be relatively small sub-regions. We should look to international examples, and I know Dr Whitehead has looked at them in the past. In Canada, in the United States there are a number of states that have very considerable areas of responsibility which are much smaller in resources and population terms than some of our counties. Again I quote the case of Cornwall, which has a very considerable sense of self-identification and is now to have a unitary authority. There seems to be no reason whatsoever why they should not have more devolved powers and more responsibility in the terms that the Prime Minister is now hinting at for raising a greater percentage of their income.

  Professor Bogdanor: I accept that both the health and Police Services need to be made more accountable; that is something that we in England ought to look at. I am not sure I agree that this is best done at regional level, for the sort of reason that Mr Kawczynski gave earlier—that people in Shrewsbury do not feel much sense of identity with those in Birmingham. For many people in England the regions are simply ghosts, they do not exist, and, therefore, I think the solution would have to be to strengthen local authorities. But, as has been said, the consequence of that must be some sort of postcode lottery, because the greater the degree of decentralisation you have, the more it is the case that the benefits which people receive and the burdens they bear will depend on geography and not only on their needs. That is the price that has to be paid and the people and their elected representatives have to work out whether it is a price they want to pay. Decentralisation is not a costless good.

  Chairman: I am afraid I am going to have to rather strict because there is one important question I want to get asked before we end this part of the session at 5.30. I am going to ask Mr Sharma to ask it.

  Q137  Mr Sharma: It has been suggested that a lot of the negative feeling associated with the English Question could be addressed by reviewing the Barnett Formula and modernising arrangements for the distribution of public funds in the UK. What are your views on this?

  Mr Clarke: Everybody agrees that the Barnett Formula should be reviewed. They have for the last 20 years. Lord Barnett himself would very much like to bury the formula. I am glad to say that this is a matter for George Osborne as far as my party is concerned. Nobody seems to have been able to come up with an acceptable alternative to the Barnett Formula. It will have to be addressed at some stage. At the moment it does play quite a disproportionate role, because it has few friends. Hardly anybody understands it. I think I do. I would have a go if had more time, I have had 18 years messing around with this stuff, and it is used as a source of resentment on both sides of the border. People have the most exaggerated sense of its impact. More and more English people do believe that their money is being used to pay for things in Scotland that they cannot get in England.

  Q138  Chairman: Particularly in my constituency.

  Mr Clarke: Particularly on the border, like yours and Mr Kawczynski's. But more and more Scots believe this is an unfair English attack upon them and is an English threat to start cutting back on what is spent in Scotland, and so I look forward to the genius who is going to be able to disentangle this and modernise the Barnett Formula. It has been used to fan resentments, but, I agree, this feeling of unfairness about how the money is distributed is there, so I hope that either this government or an incoming one can put that to rest. If we can tackle the political problems I talked about earlier, it might take a bit of the sting out of Barnett, which tends actually to be the biggest single cause, I think, of resentment.

  Q139  Chairman: Professor Bogdanor, are you he? Are you the genius who is going to resolve this problem?

  Professor Bogdanor: No, certainly not. I think there is a lot of misunderstanding about the Barnett Formula. Many people do believe that Scotland has gained extra money as a result of devolution, which of course it has not. It is true that the Barnett Formula has, for reasons which were unforeseen at the time at the time, benefited Scotland, although I do not think that it has benefited Wales. I believe that Wales has done rather badly out of it. I think the basic problem of the system, as Kenneth Clarke has implied, is that it is very difficult to get an objective standard of need, of how much each area needs. It is very difficult to weigh up, for example, rural deprivation against inner city deprivation. I believe that is a problem with the distribution of grant to local authorities as well. Any revision of the Barnett Formula would have to confront that problem. There is also a political danger: it might appear as if we were trying to punish the Scots for having chosen devolution by cutting the amount of money they received, which I think would undermine the whole purpose of devolution. I think it is worth stressing that Scotland does not do better as a result of devolution and that any social benefits which the Scots receive, such as free University tuition, or free residential care for the elderly, have to be paid for somehow within the Scottish budget.

  Mr Clarke: I agree with those last two sentences, in case anyone asks.

  Q140  Chairman: Lord Tyler?

  Lord Tyler: I think Professor Curtis in his evidence to the committee suggested this was not quite such a huge issue in the public mind as it is amongst the chattering classes. I think the Barnett Formula is likely to remain for some time yet because it is a very convenient place on which people hang all their problems of feeling aggrieved. Lord Barnett has quite rightly identified that, whatever else it has done, it has given a focus to people's feeling of grievance, which I suppose has a temporary value anyway, but it does not, of course, relate to need, and I entirely endorse what Professor Bogdanor says, but evaluating the actual requirements of different forms of need, which is attempted, of course, within England, rather ineffectually but it is attempted, is going to have to be extended to Scotland and Wales eventually, though I think it is not going to come very quickly.

  Chairman: At that point, to the three witnesses, who could have talked to us for the rest of the evening, much to our enjoyment, thank you.





 
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