Keeping the UK together

Our previous article, on the case for a federal solution to the UK’s challenges (see “The case for Federalism in the UK”, 16.05.16), has elicited several responses, and there is clearly more interest in the rather dry subject of political governance and structure than we expected.

The main challenge for any federal structure for the UK is widely seen to be England, which as a sub-unit of the United Kingdom would be too big for any pretence of equality between the component countries. England would comprise around 85% of the federal UK by population, which is a far larger proportion of the whole than in any other developed federal state:  the two next largest sub-units compared to the whole are usually considered to be Ontario, which is around 38% of Canada by population, and New South Wales, which is around 32% of Australia.

This analysis ignores a number of 2-unit states such as Trinidad and Tobago, where Tobago is a very minor part of the whole, or Tanzania, where Zanzibar, while only a small part of the whole country, retains an element of home rule.  More significantly, it ignores the case of the Russian Federation, where Russia itself dominates the country and Russians make up around 80% of the ethnic mix of the overall population, figures surprisingly close to the English presence in the UK.  But it is fair to say none of our correspondents put forward Russia as a role model for a federal Britain.

Unfortunately, the obvious solution of dividing England itself into smaller units, so that it fits better into the federal jigsaw, does not seem to be practical. England has been united for well over 1,000 years – it is one of the earliest nation states in Europe and retains a strong sense of identity – and the mooted divisions into, for example, Wessex or a revived northern province would be artificial and unlikely to gain traction.  Indeed whenever the government tries to promote and create a regional political tier, the electorate almost universally rejects it as expensive, unnecessary and unwanted.  Nor is such aversion to extra layers of government unique to the English:  the French have found it difficult to create a vibrant provincial layer of government between the state and the départements, and only those provinces with a well-established sense of identity such as Brittany or Corsica seem to have much traction with the public.

Some of our respondents observed that part of the problem was the position of London. London dominates the UK, while in many cases seeming to be almost alien to much of the rest of the country in its concerns and economy.  Should London be a separate province in a federal UK, and if so what would its relationship with the rest of England be?  Should the federal capital be deliberately positioned somewhere else, to avoid the over-centralisation that the UK is so prone to?  Many, perhaps most, federal countries have a capital city which is different from either the largest city or the financial centre, and for example Manchester (which is being actively promoted by chancellor George Osborne as the centre of the “powerhouse of the north” and a counterweight to London) would be much more central to the four component nations.

But what is clear from those who responded to our article last week is that there is widespread agreement the government cannot do nothing, cannot ignore the sea change in British politics that the SNP’s victory in Scotland has produced.  Despite the euphoria of his unexpected victory, the scale of the issues facing David Cameron is beginning to become apparent.  Quite apart from managing a still nascent recovery and an unbalanced economy where the twin deficits on the fiscal and current accounts remain too high – a challenge which would be hard enough on its own for a government with a small majority – he has three further tasks any one of which could define his premiership and his place in history.

First, he wishes to keep the United Kingdom in the European Union.  Secondly, he wishes to keep Scotland in the UK.  And thirdly, he wishes to keep the Conservative party from tearing itself apart.  While all of these are possible, and the most likely outcome at the end of this 5-year parliament is still on balance that he will succeed in all three, none of the three is guaranteed.  And the most interesting feature of the three-part problem is that failure on any one of the three will quite possibly precipitate failure on the other two as well.

It is for example very hard to see Scotland remaining in the United Kingdom if English votes demand a UK exit from the EU; and were both those unions to fail, the third union, between the pro-business pro-Europe wing of the Conservative party and the more inward-looking xenophobic wing, would not long survive them.

Cameron realises that these twin issues of Scotland and the EU will dominate his premiership.  The first full week of his government was replete with statements and gestures on Europe – many of them rather more constructive and conciliatory than the sound-bites of the campaign trail – and it ended with a meeting between Cameron and Nicola Sturgeon, the SNP First Minister of Scotland.

That meeting was by all accounts more positive than might have been expected.  Sturgeon and Cameron are far apart on the political spectrum, as the First Minister candidly admitted, but that does not mean they cannot work together.  History is replete with unlikely partnerships between political opposites – Reagan and Gorbachev, for example, or Anwar Sadat and Menachem Begin – and Cameron and Sturgeon do at least share one common goal, that of a prosperous Scotland.

It is true that most of the Edinburgh meeting consisted of Cameron offering extra powers to Scotland, and Sturgeon asking for yet more on top.  That is probably inevitable given the nature of devolved government.  But perhaps there is one more offer that he can make to the SNP.  And that is to join the UK’s negotiating team in Brussels as the government seeks changes to the EU.

To have the SNP – most probably represented by Alex Salmond, their senior statesman and foreign affairs spokesman – alongside George Osborne in these talks would serve several purposes.  First, it would give substance to Cameron’s promise that he will “listen to the voice of Scotland”, and on a matter they hold dear as well.  Secondly, it would present the EU not with a narrow party line but a more rounded UK team.  Thirdly, assuming the talks do not fail completely, by giving the SNP some ownership of the outcome there is the hope that they will be more forceful in their campaign in support of continued EU membership.  And lastly, no team can fail to be strengthened by the inclusion of Salmond, still arguably one of the canniest politicians in the country.

Of course privately, the SNP might be horrified by the offer.  It has all the makings of a trap:  they will be given responsibility without ultimate power, and tarred by the Conservative brush.  The fate of the Liberal Democrats, whose reward for their coalition with Cameron in the last parliament was so bitter, will loom large in front of them.  But equally they can hardly turn down and publicly spurn the chance to help shape Scotland’s relationship with the EU.

But for David Cameron, there is almost no downside.  And for this most surprising and unpredictable of prime ministers, it might just be the master-stroke that helps him keep all three of his unions intact.

 

This article builds in part on an earlier article published by the Official Monetary and Financial Institutions Forum – see www.omfif.org – the material of which is used with permission.