An English Parliament is only common sense
In the wake of the decision of the Smith Commission to give more tax raising powers to Holyrood without scrapping the Barnett formula, concerns about how England is governed have been thrust into full view and will now dominate the political horizon. This time the English look like they are ready for a fight to correct the unfair and imbalanced devolution settlement that left them without a First Minister and their own Government in 1998. Since then, Scottish and Welsh parliaments have flourished whilst England looks nervously at the prospect of being broken-up into concocted ‘Regions’.
Yet the answer to this most pressing of questions is still a long way off. There are multiple proposals floating around, some of which are clearly ridiculous such as the former Tory MP Harold Elleston’s desire to re-establish the old Viking Kingdom in the North of England or calls to hand independence to Yorkshire First and Cornwall to Mebyon Kernow. These last two examples are easily shown to be based on ‘fiscal fantasy’ as both Cornwall and Yorkshire are dependent on funding which is transferred from other parts of England.
However if a Devolved English government is created and a UK federal system is established then the bank of last resort, 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. Yet without an English government, Regions of the “former” England who get into financial crisis could find themselves in an isolated position and competing with the Welsh, Northern Irish and Scottish governments for financial aid. This will run a risk of serious consequences, as Sterling would appear unstable to world-wide financial markets. To see that this would occur, you only need to remember the UK Treasury having to underwrite UK debt in order to reassure the financial markets in January 2014, or the strongly adverse reaction in the money markets of 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 Sterling’s value in the money markets.
This is also partly because the smaller Devolved UK nations are loss-making, 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 net contributors of tax revenue for the whole of the UK. What could lead to economic problems is the Treasury’s acceptance that it over funds Scotland, Wales and Northern Ireland due to the Barnett Formula whilst doing nothing to correct it. It is only Scotland who doesn’t want to accept this, laying claim to the majority of North Sea oil as this could allow them to spend without accountability. It is important that the English quickly find common ground, otherwise we will be 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 the UK. It is the only rational, coherent and structured constitutional answer.