Federalism motion has the answers the UK needs

Through Brexit and the pandemic, our country has undergone social and political upheavals which will certainly leave a longstanding mark. But these systemic shocks are potential turning points in history where we have the opportunity to remake our politics for the better. Constitutional and electoral reform are dry subjects which fail to enthuse many in politics, let alone the general public. Overcoming that is a challenge in itself, but the current circumstances mean it has never been a better time to make the case for reform for a politics that is more open, fair and representative.

On Sunday 19 September, Lib Dem Conference  will consider a motion on ‘A Framework for England in a Federal UK’ which you can read on page 63 of the agenda. I believe it is a very important motion, addressing some key questions for the formation of a federal UK: the lack of genuine or consistent devolution for England; and the relationship between England and the rest of the United Kingdom.

Federalism can unleash great potential to empower communities, expand transparency and accountability, help to heal the wounds and divisions exposed by Brexit and to ‘level up’ the economy. Levelling up alone could deliver considerable economic growth in the ‘rest’ of the UK and lift millions out of poverty. But only federalism could do this. The kind of devolution the Conservatives and Labour have pursued has failed to truly empower communities and leaves Westminster all too often intervening and meddling in local and regional economies.

For me, the most important (and exciting) thing about federalism is its potential to genuinely empower people by radically shifting the balance of power. Under devolution, powers exercised at Holyrood, the Senedd or Stormont have in effect been delegated by Westminster. MPs can weaken those powers or withdraw them altogether, without consultation or the consent of those institutions or the people they represent.

By contrast, under federalism each set of institutions in each part of the UK draw their powers and authority directly from a constitution with a clear division of competences that can be modified only by negotiation and agreement. Each nation would be of equal status, equally empowered, and equally sovereign.

Westminster isn’t about to shut down Holyrood. Politically it would be very difficult to do. But the mere fact that it could means nationalists will always be able to point to the constitutional arrangement as proof that only independence can guarantee national identity and dignity. Federalism, if done properly, will blow their arguments out of the water and put an end to the serious threat of so called soft-nationalism. Of course, the situation is unique and different in each part of the UK. But federalism is a dynamic and innovative system of government which can deliver tailored solutions to each set of circumstances whilst maintaining a system which is overall fair, democratic and broadly accepted by the majority.

One of the biggest challenges in creating a federal UK is finding a fair balance between England and the other home nations, whilst delivering a reasonable distribution of power and decentralisation within England. Scotland is a nation and its only legitimate partner in a federal UK is England as a nation. Only a union of England, Scotland Wales and Northern Ireland will have the potential to be broadly accepted as fair and authoritative by people throughout the whole UK.

The motion before conference crucially offers the option of exploiting the dynamic and adaptable nature of federalism by preserving the territorial and notional integrity of England as a nation on equal footing with the rest of the UK, whilst also transferring power to be exercised regionally within England (option A in clause VII). This kind of devolution within federalism can deliver a fair and bright future for a federal UK.

* Robert Jones stood as the Liberal Democrat candidate in Ruyton and Baschurch ward in Shropshire in May 2021 and has been involved in campaigns and movements for federalism in Europe and the UK since 2006.

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  • John Marriott 11th Aug '21 - 9:22am

    I’m at one with you on a Federal U.K. I’ve been banging on about on LDV and other sites for years. I have little to add to what you have written. Just to say; please no English Parliament. Let’s have regional government in England instead, for reasons I have outlined many times!

  • Peter Martin 11th Aug '21 - 10:22am

    ” Under devolution, powers exercised at Holyrood, the Senedd or Stormont have in effect been delegated by Westminster. ”

    Only up to a point. But Holyrood is still dependent on the Westminster Govt for funding via the Barnett formula.

    Devolution does have its superficial attractions, but Lib Dems shouldn’t underestimate the importance of central government, especially when it has a currency issuing capability which is non devolvable. This is what has kept the UK economy afloat during the Covid Pandemic. Without Westminster and the BoE the devolved regions would be helpless.

    Australia has a much more devolved system of Government than many in the UK would appreciate from afar. Power is devolved into 6 states and two significant territories.
    It does seem odd from a UK perspective that, for example, teachers who are qualified in one state may not have their qualifications recognised in the next. Driving licences and car rego plates are based on the State of residence rather than issued nationally. So anyone moving from one to another has the hassle of unnecessary paperwork.

    Does the Federal System in Australia produce better Government? As a joint UK Aussie national I’d say largely not. The States have too many powers which they are loath to relinquish. South Australia is one of the few places in the world to be half an hour different to everyone else! When there are problems the State government blames the Federal govt in Canberra and the Federal Govt blames the State govts in their State capitals.

    We might all know that the head of the US govt is President Biden but how many heads of the individual states come to mind? I’d guess none. The central govt is always the one that calls the shots even in a Federal system.

  • @ Peter Martin

    I would agree – the amount of money, time and energy that has been expended over the different approaches to the Coronavirus has been divisive and, to my mind, unnecessary.

    No doubt the same will be the case when measures are introduced to combat the climate crisis. I would have thought that in both cases coalition government, as was the case during most of WW2, is the most appropriate way to tackle matters of such importance.

  • Helen Dudden 11th Aug '21 - 11:22am

    I agree totally. So much has crept under the radar over who has contracts and large payments.
    Meanwhile, families and others struggle to even eat. How about keeping warm soon, energy companies are making lots of profit out of misery.

  • Brad Barrows 11th Aug '21 - 12:45pm

    @Peter Martin
    Your comment regarding teaching qualifications…you are aware that Scotland’s General Teaching Council has, since 1965 (i.e. pre-devolution), decided whether teachers who qualified elsewhere in the world (including elsewhere in the UK) meet the standards to teach in Scotland. There are also, sadly, plenty of examples of teachers who have lost their registration in Scotland, whether for unprofessional behaviour or incompetence, merely moving to England to carry on teaching.

  • John Marriott 11th Aug '21 - 5:41pm

    @Peter Martin
    I suppose from what you have written on several occasions that you must have spent quite some time ‘down under’. I too spent four years of my early life living and working in Canada and what was then West Germany, both, as you undoubtedly know, federal states.

    Canada, given its size, is, like Australia, a natural candidate for federalism. Germany, because of its history (only becoming a united nation in 1871) was also a natural candidate for this type of governance.

    Now I grant you that to create a regional tier in England may be more difficult and it wouldn’t be that important for regional ‘leaders’ to be know outside these shores. Whether it’s Canada, Australia or Germany, many people have heard of and could probably identify, Justin Trudeau, Scott Morrison and Angela Merkel. I also reckon that, in those three countries, many people would know who their Premier or Ministerpräsident was. Your dismissal of our English regions as “helpless” says more about you than their competence.

    As for basing your judgement on difficulties with vehicle registration or Teaching Certificates, you want to try registering a motor vehicle in Germany to see bureaucracy in tooth and claw. Responsibility for vehicle registration rests ultimately with the administrative district, of which there are several in each ‘Land’. So, if you move to another district you have to register your vehicle there and buy new plates. That doesn’t seem to be a major bone of contention when Germans discuss their federal system.

  • Peter Martin 11th Aug '21 - 6:43pm

    @ John,

    “Your dismissal of our English regions as “helpless” says more about you than their competence.”

    You’ve misunderstood.

    It’s not about ability or “competence”. It’s about what is possible. The Westminster Government owns the Bank of England . The Govt likes to pretend they don’t and that the BoE is independent but they aren’t being honest when they say this. The BoE haven’t decided of their own volition to purchase some £700 bn of Govt bonds. They’ve done this on the instructions of the Westminster Govt.

    They just might purchase some Scottish bonds, or hypothetically, some bonds issued by the English regions, if there were devolved political entities created in the future, but they would only do this if they were told to by the Westminster govt. They are the ones in charge.

  • Peter Martin 11th Aug '21 - 8:31pm

    @ Robert Jones,

    “Unlike in a federal system, there is nothing to stop the central government from rescinding those laws and the powers that went with them…..”

    Neither is there anything to stop it in a Federal System. Ultimately Federal Law has to have primacy over State law. If the States don’t like it enough they have to leave. The American civil war was a consequence of just such a dispute between central and regional government. Ultimately the Confederacy was bought back into the fold by use of military force.

    Conceivably, the EU could have wanted to do the same to the UK over Brexit! The EU always claimed that EU law had primacy over UK law. I’m not suggesting that this was ever likely to happen though! Instead I can see a smouldering cold war continuing to fester.

  • In the US Federal system of government, States are sovereign entities that have the power to raise taxes. The federal government and the majority of states have income taxes, but their rules and rates can vary widely. The most important sources of revenue for local governments are taxes, Federal and state level grants, and service charges. For local governments the property tax, a levy on residential and commercial real estate, is the most important source of tax.
    The Federal Reserve like the Bank of England has operational independence within government. The governments sets the banks mandate but the governor and board members determine how that mandate is met.
    In addition to raising taxes, US States and local governments can and do issue municipal bonds. All money is created as a debt contract of some form whether interest bearing or not. Banks create money by lending against a promise to repay by borrowers and generally some form of collateral. Countries and states create debt contracts by issuing bonds or currency and spending into the economy on the basis of an implicit promise to repay by their taxpayers and the collateral of the economic production of the jurisdiction.
    The problems for individuals, firms, states or counties arise when the promise to repay, whether from income sources or refinancing against collateral is no longer considered credible. For states specifically that situation arises when the implicit guarantee of the federal government is not forthcoming either as a consequence of political decisions at the Federal level around moral hazard or excessive inflation nationwide that generates a debasement of the national currency and falling real wages.
    Collectively, US states spend more on goods and services and on infrastructure than the Federal government accounting for around 15% of GDP.

  • No problem with proper federalism at all. I’d also give the federal governments real powers more akin to those held by states in the US. Pretty much everything except foreign affairs and defence.

    I’d also say that the idea of England being broken into regions is necessary for this to work due to the huge disparity in population size.

    The thing about English regions though is that proponents of regionalisation have always proposed breaking it up into regions called “The North East”, “West Midlands” etc. Dull uninspiring bureaucratic divisions.

    What other European country does this? They all use their old kingdoms, Dukedoms and principalities as their model.

    The usage of “North West” and so on as names just doesn’t resonate. It completely fails to understand the way that peoples’ imagination works. If instead the regions were named after the old English kingdoms, Wessex, Mercia, Northumbria etc, no matter how daft this may sound to many readers of this board, I reckon this would capture the public imagination far better. It retains the idea of a shared heritage distinguishing them from the Scots, the Welsh and the Northern Irish – who often refer to the 6 counties as Ulster – while also separating them from each other.

    There is a reason why when the Welsh counties were reorganised in the ’70s they brought back the names of the old Welsh kingdoms and principalities of Dyfed, Gwynedd, Powys etc.

    As the Brexit referendum showed clearly, people need not only facts, figures and reason – something which lies at the base of liberalism – but they also need a dream.

    I don’t really see much in the way of selling any dreams to people at the moment from the Lib Dems.

    This needs to be fixed quick – big time.

  • Peter Martin 11th Aug '21 - 9:10pm

    @ Joe,

    “In the US Federal system of government, States are sovereign entities that have the power to raise taxes.”

    This is not a sufficient definition of a “sovereign entity”. If it were, my local council would be a sovereign entity because they have the power to impose a tax on my place of residence.

    You seem to have a problem in seeing that whereas the State of Florida can raise dollars from taxation, the Federal Govt can, in addition, create dollars. Florida is a user of dollars. The Federal Govt is an issuer of dollars. This is a huge difference and this is where dollars actually come from.

  • The fifty states are separate sovereigns with their own state constitutions, state governments, and state courts. All states have a legislative branch which enacts state statutes, an executive branch that promulgates state regulations pursuant to statutory authorization, and a judicial branch that applies, interprets, and occasionally overturns both state statutes and regulations, as well as local ordinances.
    As a central bank the US Federal reserve serves a number of functions including having the sole right to issue notes; serving as a banker to the state; acting as a banker’s bank and lender of the last resort; facilitating the functioning of the money market and providing a clearinghouse through the central reserve system.
    The Federal reserve can creates money through open market operations, i.e. purchasing securities in the market using new money, or by creating bank reserves issued to commercial banks to maintain liquidity in the inter-bank lending market. Under normal lending conditions, Commercial banks create most of the new money required in the economy through lending operations.
    The federal government spends money (i.e. creates a debt contract) to acquire real resources from suppliers on behalf of its population and balances that spending with taxation and debt issuance in the form of bonds. The central bank can buy back bonds via open market operations that swap bonds held by banks and financial institutions for shorter-term reserve liabilities with commercial banks, but this does not reduce overall indebtedness – it swaps longer term liabilities for short-term deposits at the central bank.
    Government money issuance has to be balanced with money creation by commercial banks. If private banks are creating excess money via lending then the central bank will generally need to act to reign in that expansion and vice versa during periods of deleveraging when more loans are being repaid than taken out.

  • Peter Martin 12th Aug '21 - 7:02am

    “If private banks are creating excess money via lending…..”

    You may have noticed that the commercial banks tend to lend in US dollars in the USA, Aussie dollars in Australia, Yen in Japan, Pounds in the UK etc. They lend in the Government’s currency of issue.

    Also, we all know that when Commercial banks lend they aren’t adding any net overall spending capability to borrowers. You or I can can take out a loan from the bank and go off to buy a car or whatever. But our borrowing doesn’t give us any extra pounds to spend over the course of the loan period because we have to repay them. If we include the interest we have to repay more than we borrow. The loan brings forward our spending ability to give us more in the shorter term at the cost of less in the longer term.

    Only a currency issuing Government can give us

  • Peter Martin 12th Aug '21 - 7:08am

    Sorry. I think I pressed CTL + Enter by mistake! That sent it off before I was ready!

    Anyway to continue.

    Only a currency issuing Government can give us the pounds and dollars in our wallets which are also our real positive net assets. ie Money which is ours and which is not borrowed from a bank. In the USA only the Federal govt can create these positive net assets. Not the individual states. In the UK it is only the Westminster govt and not any devolved govt or local council which can do this.

  • Nonconformistradical 12th Aug '21 - 8:39am

    “If instead the regions were named after the old English kingdoms, Wessex, Mercia, Northumbria etc, no matter how daft this may sound to many readers of this board, I reckon this would capture the public imagination far better.”
    Might be worth exploring. Here are some links to maps of ancient England or Britain:

  • John Marriott 12th Aug '21 - 8:55am

    @Messrs Bourke & Martin
    Sam Cooke told us that he didn’t “know much about history”. Well, in my case it’s not history that I struggle with, it’s economics. What I do know, to continue Sam’s lyrics, is that there is something deeply wrong with the way we govern ourselves, especially in England and attempts at points scoring do not get us very far.

    I am in favour of making people responsible for their decisions. I am in favour of ‘big government’ when it needs to be big, in areas like foreign affairs and defence. You can add to that environmental policy, trade and economic planning. For everything else, there’s local government. It can be large, like in a major city or in a region. It can be small as in the case of a Parish/Town or Neighbourhood Council. Whatever it is, it should not be the fiefdom of a few or even a single person and especially not a collection of multinationals. Above all, it has got to be democratically accountable and it has got to be allowed to get things wrong. Mind you, I’m writing this in the expectation that more often than not it will get things right. It won’t always do what everyone wants, but it will reflect a majority view as demonstrated, if necessary, via the ballot box. It will, above all, react to local needs and aspirations.

    I’ll end with another lyric, as I do not have any vast fiscal facts at my fingertips to toss around like you learned gentlemen are wont to do. They come from John Lennon’s ‘Imagine’. “You may say I’m a dreamer/But I’m not the only one”. We really cannot go on the way we are.

  • Peter Hirst 12th Aug '21 - 9:23am

    Only if it is acceptable to the devolved nations Robert. The asymmetry in population is an issue. It might seem daft though they might determine what sort of federalism we have. That is if we i.e. England want to continue with the United Kingdom.

  • Peter Martin – I suppose most of us knew that Andrew Cuomo was Governor of New York State … until he resigned!
    More importantly Dave is right. Names and history matter. Yorkshire people have no problem in identifying with the historic county but struggle with the separate bits of Yorkshire that have been bribed into having elected mayors.

  • Peter Hirst 12th Aug '21 - 9:34am

    One solution might be to hold a referendum of the people of England to see what option they prefer. At the very least it would raise awareness of the issue and our governance in general. This could lead to a more general debate about a written codified constitution.

  • David Craddock 12th Aug '21 - 9:39am

    The key point for me is the need to reverse the over centralised nature of Government in England and indeed the UK as a whole. This means reversing the incredibly harmful reduction in funding for local authorities by successive governments over the past 40 years. Localism and the decentralisation of power and funding is totally consistent with Liberal values and a USP for the Lib Dem’s. Federalism delivers this and we should not be afraid to shout about it.

  • Brad Barrows 12th Aug '21 - 9:48am

    @Peter Hirst
    The fact that England’s population is so much greater the other countries of the UK is a problem whatever proposal for a Federalism is enacted, and splitting England into regions would not solve the issue. For example, suppose Scotland were to get 10 members of a new 100 member Senate (to replace the House of Lords), and England got 80 – Scotland could be easily outvoted by English representatives if they all voted together. Suppose instead that England was broken into several regions and those 80 Senators were allocated accordingly, this would not change the electoral reality – Scotland would still just have 10 out of 100 and could easily be outvoted by English representatives if they all voted together. Therefore breaking England into regions would not reduce the issue of population imbalance between the countries of the UK and would actually work against England’s interests in terms of having a democratic structure to consider all-England laws and policies. England should have a devolved/federal arrangement with exactly the same powers as the other countries of the UK.

  • Peter Martin 12th Aug '21 - 9:49am

    @ John,

    “I am in favour of ‘big government’ when it needs to be big, in areas like foreign affairs and defence. You can add to that environmental policy, trade and economic planning. For everything else, there’s local government.”

    I know this is what Lib Dems tend to think but you’re wrong to downplay the economics of the central government. If you don’t understand it you need to put on your thinking cap. Different individual States in the Federal countries of the USA, Canada, Australia etc will have different parties in control. Nothing much changes. No-one, for example, would think of moving, or not moving, to Melbourne from Sydney because Victoria has a Labour Govt and NSW has a Liberal govt. It’s a very minor issue.

    The policies of the central Govt in Australia decide what the unemployment rate, the inflation rate and exchange rate, and so the state of the economy, will be throughout the whole of Australia.

    This is not to say that we shouldn’t have local government but just that we need to understand its limitations. It’s no different in the UK. For example the economy of the post war years was set by the Labour govt of 1945-51. Not by Yorkshire County Council. Maybe the railways should have been nationalised and maybe they shouldn’t according to your political preference. But this could only have been done by national government which simply created the money to pay for it.

  • Nonconformistradical 12th Aug '21 - 10:12am

    @Peter Hirst
    “One solution might be to hold a referendum of the people of England to see what option they prefer. ”
    Who should define the question to be asked?

    What voting system should be used?

    On what basis would you hope and/or expect people would make their choice? History? Xenophobia? Economic?

    What would you regard as a decisive result?

  • Nonconformistradical 12th Aug '21 - 10:19am

    @Peter Martin
    “If you don’t understand it you need to put on your thinking cap.”
    No Peter – it is up to you to explain your thinking in terms others can follow – and without hogging threads on LDV. Don’t push the responsibility on to others please.

    “This is not to say that we shouldn’t have local government but just that we need to understand its limitations.”
    So what do you think could/should be controlled at a local level and how should local government be financed? In plain English please, not economic jargon.

  • As an exiled native of God’s Own County now living in Scotland, could I gently advise the prolific Mr Peter Martin that there was/is no such thing as Yorkshire County Council although there is a Yorkshire County Cricket Club.

    Could I also gently suggest to Mr Peter Hirst that he reflects on what message his comment, “That is if we i.e. England want to continue with the United Kingdom” sends to Scotland and to Scottish Lib Dems about the Anglo-centric nature of first past the post UK Westminster Governance (and, for that matter, the increasingly Anglo-centric nature of the Home Counties dominated Lib Dem Party).

  • Surely the first question that should be asked of the public is if they want yet more politicians and the resulting endless laws enacted to justify their existence?

  • George Thomas 12th Aug '21 - 11:31am

    Timing of any change will be important. Currently, HS2 hasn’t reached the north of England – it may never do so with short-sighted opposition from many including LD’s – and therefore investment and benefit of the project is still advancing south-east of England while not improving beyond that and providing a dis-benefit to Wales.

    If you wait until after HS2 completed then it will be better time to create devolution in England but still there would be a dis-benefit to Wales and population disparity around the UK would only get worse.

    Tories are speaking about levelling up with a view of over-riding current levels of devolution, LD’s need to speak about levelling up with a view of protecting current devolution with a view of taking it further.

  • John Marriott 12th Aug '21 - 11:32am

    @Peter Martin
    Of course Local Government has “limitations”. So does Central Government. It’s the balance I am on about.

    Are you REALLY happy about the status quo? Surely not. I certainly don’t expect to see a Yorkshire Army in the very near future, nor a Cornish one, for that matter. I don’t know whether you have any experience of being a councillor. As you probably know, I have. Over a period of thirty years I have worked with some highly capable individuals, both colleagues and officers, although I have encountered some poor ones as well! I know that money doesn’t grow on trees.

    @Brad Barrows
    “If they all voted together”. Can you absolutely guarantee that they always will? Has it always got to be ‘England versus the rest’? Under my system, there would be a directly elected Federal Parliament, replacing the present British Parliament, which would elect a Federal Government. This body would have a revising chamber (a Senate?), whose members would be nominated by the nations and regions of the U.K., like the German Bundesrat. Everything else would be decided by the directly elected ‘parliaments’ of Scotland, Wales, NI, the six or seven English regions and, below them, directly elected local Town/Parish and Neighbourhood Councils.

  • Brad Barrows 12th Aug '21 - 1:16pm

    @John Marriott
    My point would be that whether England were divided into several regions or not, the political make up of the representatives elected to a Senate would likely be very similar and party discipline would apply so that senators would vote in blocks. Dividing England into regions would not change this reality so is not an answer to the population imbalance between the different countries of the UK.

  • Peter Martin,

    “The policies of the central Govt in Australia decide what the unemployment rate, the inflation rate and exchange rate, and so the state of the economy.” This is what the Labour government of the 1970s thought until they learnt better and Jim Callaghan had to tell his party and the country:
    “We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step. Higher inflation followed by higher unemployment. We have just escaped from the highest rate of inflation this country has known; we have not yet escaped from the consequences: high unemployment. That is the history of the last twenty years.”
    The reason Callaghan had to make this admission was the failure of prices and incomes policies and the inability to raise what were then already confiscatory rates of taxation.
    The policies adopted after WW2 (including Bretton Woods) relied on capital controls. These were circumvented by the larger International banks from the late 1950s with the creation of the Eurodollar system. International banks financed US dollar denominated loans and accumulated US dollar denominated deposits outside of the regulatory control of the Federal reserve and US government. US dollars circulating outside the US were and continue to be exchanged by Non US banks including foreign central banks. The Eurodollar market today includes a high level of derivatives trading where credit flows by the swap of financial assets and liabilities between contracting parties without the creation of money deposits.
    “I am afraid the ordinary citizen will not like to be told that the banks can and do create money. And they who control the credit of the nation direct the policy of Governments and hold in the hollow of their hand the destiny of the people.” Reginald McKenna, as Chairman of the Midland Bank, addressing stockholders in 1924.

  • John Marriott,

    we do not have to imagine the benefits or workings of federalism, We can see it – in the USA, Canada, Australia and Germany.
    Regional government is closer to the people it serves. Each region needs to be of a sufficient size to be economically self-sufficient i.e, have the ability to fund its primary needs from its own human and physical capital and natural resources.
    As you write, you need a central government in areas like foreign affairs and defence, environmental policy, trade and economic planning. But most other policy areas, that impact directly on the lives of people, are probably best directed at local level.
    There is a requirement for what is now called ‘levelling up’ or what the EU refers to as convergence but that is achieved by strategic investment in human and physical capital – partly public but mostly private sector investment in training and tangible assets or so called Industrial strategy.
    Regional governments fund themselves with taxation and borrowing. Both by direct issue of bonds and via access to central loans and grants. Central government funds itself by taxation and borrowing both for its owns needs and on behalf of regional governments.
    The central bank continues its primary function of maintaining the stability of the currency and providing inter-bank clearing for regional banks through the reserve system.

  • Peter Martin 12th Aug '21 - 2:31pm

    @ John,

    “I know that money doesn’t grow on trees.”

    Neither for you and me nor your local council. But, even if it did for a currency issuing Govt, it wouldn’t be worth the trouble of harvesting the orchard. Much easier to tap away on a computer keyboard. The usual provisos about too much inflation and not overdoing it apply. This is an enormous power to exercise and is why you might want to rethink on the balance of relative importance.

    @ Joe,

    Jim Callaghan wasn’t doing anything other than following the increasingly off beam right wing economics thinking of the time.

    There were quite a few things wrong with the economics of the 60s and 70’s. 2% unemployment was probably too optimistic a target for full employment. There was insufficient attention given to regional differences. The South of England would start to economically overheat before the regions started to thaw out. The Labour Govt didn’t understand the implications of letting the pound float and started to panic when it fell below $2. Then we had the problems of the oil price rise and the fight between labour and capital about who would pay the bill.

    None of this means that there was anything fundamentally wrong with the Keynesian thinking of the time. Like anything else it needed some improvements but to jump from that to the nonsensical monetarism which started with Callaghan and later came more into vogue with Thatcher and the Tories made no sense at all.

  • Peter Martin 12th Aug '21 - 3:09pm

    @ Brad,

    You’re quite right to say that dividing up English regions would be creating more problems than it solves. As far as most people are concerned they live in England, and then their local county. They don’t have any attachment to historical regions like Mercia or Wessex. Hardly anyone could accurately identify where they were on a map in any case.

    If most Lib Dems had their way we would have still had our MEPs. Then below that we’d have MPs. Then there would be MSPs and MRPs MRPs = Members of Regional Parliaments. Then we have elected mayors of the larger regions. I never figured out why Liverpool had two in the shape of Steve Rotheram and Joe Anderson. I asked someone who came from Liverpool once and he had no idea either!

    Then we have an assortment of parish, town and county councillors. I don’t know who they are for where I live and neither would most people.

    Democracy is a good thing but making it so complicated that hardly anyone knows who does what or what responsibilities they have undermines the whole process.

    If the Scots want to divide Scotland up then that’s their call. I don’t believe most English people want any further divisions or to divide up the country any more than it already is. But I could be wrong. So why not ask them?

  • Nonconformistradical 12th Aug '21 - 3:44pm

    @Peter Martin
    “I never figured out why Liverpool had two in the shape of Steve Rotheram and Joe Anderson. I asked someone who came from Liverpool once and he had no idea either!”
    Here’s Cllr Richard Kemp, leader of the LibDem group on Liverpool City Council on the subject:

    “Democracy is a good thing but making it so complicated that hardly anyone knows who does what or what responsibilities they have undermines the whole process.”
    For once I understand and agree with you.

    So why not work towards making those responsibilities clear and relevant to local communities and giving local authorities the power and resources to fulfil their responsibilities – at the appropriate level? Local people are likely to understand the needs and priorities of their local community rather better than Westminster and Whitehall.

  • John Marriott 12th Aug '21 - 4:32pm

    @Brad Barrows
    And MY point is that the members of any Senate would NOT be directly elected but NOMINATED by the nations and the regions of the U.K.

  • Peter Martin,

    yes, there were quite a few things wrong with the economics of the 60s and 70’s as Jim Callaghan pointed out when he commented on the history of the last twenty years in his 1976 speech.
    Stagflation was a term coined in 1965 by Iain Macleod while he was speaking in the House of Commons. Talking about inflation on one side and stagnation on the other, he called it a “stagnation situation.” That was followed by the first large crack in the Bretton Woods system in 1967, with a run on gold and an attack on the British pound that led to a 14.3% devaluation. President Richard Nixon ended dollar/gold convertibility in 1971.
    By the time of the 1973 oil shock, the system had collapsed, and participating currencies were allowed to float freely.
    Monetarism was a short lived attempt to control money supply aggregates by the Thatcher government but only served to show that this was not in the control of the state and wrongly assumed that the velocity of money was stable.
    It was not until Inflation targeting was widely adopted in the 1990s in place of exchange rate targeting that the destabilising conditions of the 1970s and 1980s were brought under control.
    It is important to learn the lessons of history. That applies equally well to economics as it does to forms of government like Federalism.
    Keynesian theory forms the basis for modern day macroeconomics and has three principal tenets of how the economy works:
    • Aggregate demand is influenced by many economic decisions—public and private.Private sector decisions can sometimes lead to adverse macroeconomic outcomes, such as reduction in consumer spending during a recession. These market failures sometimes call for active policies by the government, such as a fiscal stimulus package. Therefore, Keynesian economics supports a mixed economy guided mainly by the private sector but partly operated by the government.
    • Prices, and especially wages, respond slowly to changes in supply and demand, resulting in periodic shortages and surpluses, especially of labor.
    • Changes in aggregate demand, whether anticipated or unanticipated, have their greatest short-run effect on real output and employment, not on prices.
    No policy prescriptions follow from these three tenets alone. What distinguishes Keynesians economists is the belief that activist policies can reduce the amplitude of the business cycle.

  • @petermartin

    “Neither is there anything to stop it in a Federal System. Ultimately Federal Law has to have primacy over State law. ”

    In the USA example, the federal state which is the USA was constituted by the states, given power and responsibilities by the states, and governed by a written constitution which defines federal and state responsibilities supervised by a federal Supreme Court. The federal constitution can only be changed by super majority votes in the federal Congress and by a super majority agreement from the states.

    That is very far from the UK doctrine of the absolute sovereignty of the Crown in the,Westminster Parliament.

  • @petermartin

    “If the Scots want to divide Scotland up then that’s their call.”

    Well, the debate in Scotland is primarily about self government through independence. And it is not Scotland’s call: the Westminster government elected through English votes is arguing that it will block any decision by the Scottish Parliament.

    Incidentally, Scotland has only one tier of local government, 32 single tier authorities.

  • Andrew Tampion 13th Aug '21 - 11:06am

    “And MY point is that the members of any Senate would NOT be directly elected but NOMINATED by the nations and the regions of the U.K.”

    Such a policy, if implemented, would give power to Party leaders and to Party machines to appoint “Senators”. It would be worse than the current system of appointment to the House of lords because at least with the House of Lords some members care appointed for non political reasons. No thank you.

  • Peter Martin 13th Aug '21 - 1:12pm

    @ Hireton,

    “That is very far from the UK doctrine of the absolute sovereignty …..”

    I can’t see much difference in practice.

    “When a state law is in direct conflict with federal law, the federal law prevails”


    We had similar discussions re the EU during the referendum. EU law was considered to have primacy. I can understand why it does have to be this way if the EU wants to be a Federal Entity like the USA. A Federal UK wouldn’t be any different.


  • Martin,

    the EU is a confederation not a Federation. The membership of the member states in a federation is not voluntary while the membership in a confederation is voluntary. Therefore, the members of a confederation can withdraw their membership anytime, unlike in a federation.
    This article Swiss Federation. discusses the Swiss Federal system within which Cantons have a high level of autonomy.
    It notes:
    “The federation has been given powers in respect of subjects of national and common interest and importance. The federal list includes defence, foreign affairs, railways, P and T, banking and commerce, currency, nationalization and others.
    The Cantonal governments look after law and order, elections, construction of public works and highways, local government, public education and other such subjects.

    Regarding the division of powers, the Swiss Constitution clearly upholds the position that the Cantons are sovereign in so far as their sovereignty is not limited by the Federal constitution and as such, they exercise all rights which have not been transferred to- the federal government.”
    “Like the US Federation, the Swiss federation also accepts the sovereign equality of all the Cantons whether big or small. Each full Canton sends two representatives and each Half-Canton one representative to the upper house of the Swiss Federal Parliament—the Senate.

    The Cantons enjoy the right to determine the method of election and the tenures of their respective Senators. The principle of the equality of all Cantons in the Senate symbolizes the sovereign equality of all Cantons. The Canton of Berne has a population 30 times larger than the Canton of Uri, yet both have equal seats (two) in the Senate.”

  • @peter martin

    “I can’t see much difference in practice.”

    The federal government and federal law cannot override the constitution or change the constitution and is subject to legal scrutiny from the Supreme Court.

    In the UK, the Crown in Parliament can do whatever it likes and, as in the current repeal of the FTPA, can through ouster clauses specifically and legally put itself beyond legal scrutiny and challenge.

  • John Marriott 14th Aug '21 - 9:28am

    @Andrew Tampion
    In YOUR opinion. The way that I envisage Senators being nominated, not appointed and certainly not directly elected, as we struggle to get people out to vote now without adding another election to the list, would be based on the relative strengths of the various parties in the nations and regions of the U.K. Hopefully, all direct elections would be decided by then on PR. It certainly would not be in the gift of any administration below federal level to decide who gets the sinecure.

    Any second chamber (and there are many people, who do not see the necessity for one) which would only be there to revise primary legislation in the areas where the Federal Government had competence, would be small and not necessarily be made up of retreaded politicians, although a certain expertise in how bills etc are drafted would, in my opinion, be useful but not essential.

    All this may seem a radical departure from what we are used to. Perhaps, as. Liberal, which I assume you are, you need to think a little more outside the box before dismissing this idea out of hand.

  • Robert, I’m afraid the United Kingdom is no more likely to survive by means of a federal union in which England is a single federal state. Neither are England’s problems going to be solved by that. Creating a federation of four nations requires a powerful English Parliament that would be equivalent to Holyrood, etc. Such a solution was always going to end in conflict between an English and British government/parliament, and the party followed that view when it adopted Policy Paper 117 in 2014. Such a solution would still require regional governments if we are to make good on our promises to massively decentralise England.

    Having regional states is the only alternative to that for a federal UK, but there is no way in which regionalism does not “preserve the territorial and notional integrity of England as a nation on equal footing with the rest of the UK”. For starters, there never was, is or will be any such thing as “equal footing” when one nation has 85% of the population and economy. Secondly, the absence of either a Scottish or English parliament for the first 300 years of the existence of the United Kingdom does not mean that neither Scotland nor England have existed as nations. Thirdly, the regional solution offered by the federalism motion to be debated next month clearly states the need for some common English affairs regardless of whether England as a single nation is a federal state or a multitude of its regions are federal states which will have constitutional parity with Scotland, etc.

    Reforming the UK will always involve a delicate balance between “identity politics” and the practicalities of sensible tiers of government that work for people (as distinct from nations). Whatever that balance is, it should not involve pandering to naked nationalism or pretending that England doesn’t exist because it hasn’t got a parliament.

  • With regards to the discussion on how to name English regional states if the country is to follow that path:

    England as a country has been centralised for 1000 years in stark contrast to other places such as Germany whose states existed far more recently. This romantic notion of using the names of the ancient English kingdoms may be superficially attractrive and spark an interest in some people, but the reality is that it is utterly meaningless to many people. I believe the majority of people will, at the end of the day, be more interested in having structures and tiers of government that make sense for today’s population and economy. When faced with a choice of either “belonging to a reconstructed kingdom for the sake of reusing a romantic, historic name” or “having a region that reflects their modern work/social patterns”, what are they actually going to choose?

    But we have all the time in the world to bang on about silly names. The process of forming those regions is far more important and complex. It’s a consensual process but one that can’t claim ever to be able to satisfy absolutely everyone. There will always be someone unhappy with the name or with which side of a boundary their district has end up on. Live with that reality, and let’s move forwards.

    People should be encouraged to make their own modern identities but also permitted to express as much historic romanticism as they wish. But at the end of the day, 1000yr old counties and defunct kingdoms and just Dead People’s Baggage.

  • Can people making comments about English Regions stop using expressions such as “if England were broken up into….”

    England won’t cease to exist as a nation by the creating of English Regional States. Liberal Democrats should stop using expressions that provide ammuntion to naked nationalists.

  • Peter Martin 14th Aug '21 - 11:37am

    @ Michael Kilpatrick,

    “Can people making comments about English Regions stop using expressions such as “if England were broken up into….”

    Look, whatever terms you may or may not like, this is what the debate will be about. There is no popular support for having separate English regions. If you disagree then let’s see your evidence. In any case, if votes are to have approximately the same weight thoughout the UK then English votes will always outnumber the others no matter how England is “broken up into” separate regions.

    There is no getting away from the arithmetic of the population imbalance. Incidentally, we nearly all have a mixture of the four nations in our recent ancestry. It’s not a big issue for most people, except perhaps if there is a football or rugby game going on!

    @ Hireton,

    “The {US} federal government and federal law cannot override the constitution or change the constitution and is subject to legal scrutiny from the Supreme Court.”

    Probably that’s because the Americans are more into constitutions than we are. Do we actually have one? If we did, the situation wouldn’t be any different whether or not we had a Federal system of governance.

    The Westminster govt is still subject to the rulings of the Supreme Court.

  • I see Brad Barrrows was commenting on the make-up of a putative Federal Senate for the UK.

    If England is represented by a multitude of regional federal states, it ought to be obvious that those states will not all share common goals and feelings on a variety of policy matters. In many areas, some regions may be aligned more with Scotland and/or Wales than with other far-flung corners of England.

    If England were a single state then, depending on how the Senate is formed and how political parties are represented and how they whip Senators (if at all) then there is certainly a risk of large blocks of Senators acting as a unified voice and constantly out-voting the smaller home nations. I don’t consider that at all desirable.

    This does beg the question: what would be best way to constitute a Senate given that England is 85% of the UK irrespective of whether it is regionalised or not? Our Policy Working Group did not propose views on this although we did explore the constitution of other federal unions whilst discussing the English Question. Indeed, we need to answer the English Question before we propose a version of a Senate, for the number of federal states in the new Union rather influences how we might populate a Senate.

    If we take it as a given that the number of regional states of England number somewhere between 6 and 16 (I’m happy to debate those approximate limits) then the federal UK will look more like Germany than the USA, the latter having a large number of states and therefore only two senators per state in the Senate. In Germany, the Bundesrat is semi-proportional: the larger states have more members but to an upper limit.

    English Regional States of the UK would, in such an arrangement, have Senators who represent their region, not a London-centric English political party.

    We should do our utmost to nurture that decentralised manner of representation for the UK rather than any form of centralised “Westminster” political influence. Indeed, the whole purpose of a Senate within a federal union is to represent the States as entities in contrast to the lower house of Parliament which represents the people.

    Decentralised politics and better protection of and representation of the needs of the diverse parts of England (as well as of Scotland, Wales and Northern Ireland) will not be well-served by having a single English federal state, however localised the nature of the election/selection of the body of English Senators.

  • A federal Senate would always be involved in questions of great constitutional importance even if (as is the case in Germany) it does not always have a vote on issues of lesser importance that are decided solely by the lower house of Parliament.

    Questions of great constitutional importance should not be taken on a simple majority vote. Any English bloc-vote in a Senate would always overrule the views of the smaller nations.

    One way to solve this problem if there were a single English federal state (a union of four nations) would be to require a simple majority of nations (regardless of their size) as well as a majority of Senators. A double majority requirement. Such a criteria could exist irrespective of how many Senators each of the nations had, and therefore it would not matter whether there were a US-style Senate with a fixed number of Senators per state or a German-style Bundesrat with a degressively-proportional population?

    With English Regional States, we would not expect all English Regional States to be aligned together: some could well be more aligned to Scotland’s views on some matters. Either way, to eliminate possible English dominance, the decision of a vote in the Senate could be determined by more sophisticated criteria. It might be that the majority of Senators overall also had to be accompanied by “agreement by at least [n] non-English states” where [n] is an appropriate number. Or it might have to include “a majority of the non-English states”.

    Note that the criteria above are adaptable if, for example, the Isle of Man at some decided it wanted to become a full member of the UK as a separate federal state.

    All sorts of means of achieving a consensus between four home nations, one of which is excessively large, are possible. This is certainly not an insurmountable problem.

  • Peter Martin 14th Aug '21 - 12:10pm

    PS Just an additional comment on how the situation works in Federal Australia:

    There are essentially two sets of constituency boundaries. One for members of the Federal Parliament which meets in Canberra. The other for State Parliaments which meet in the State capitals of Sydney, Brisbane, Melbourne etc. As far as possible each constituency is chosen to have approximately the same numbers of voters. The voting system is by AV but it doesn’t have to be like that. In addition most Parliaments have an upper house and voting for those in by a more PR system.

    We could have just such a system in the UK and it would work perfectly well and without any need to resurrect ancient, defunct and long forgotten English sub kingdoms.

    As Michael Kilpatrick would no doubt not put it: There would be no need to “break up” any of the existing countries which constitute the UK.

  • Peter Martin 14th Aug '21 - 2:01pm

    @ Michael Kirkpatrick,

    If I understand you correctly, you are saying we can’t have a simple and straightforward Federal System along Aussie or US lines, because this will give too much influence to England and English voters. Switching to any Federal system will be difficult enough, given that a majority of voters, including English ones, will need to be in convinced of its merits. If the proposed system is going to be weighted against the English to more favour the smaller nations then you’ve no chance of getting this agreement.

    Furthermore, we need to be sure why we want to make the change. Is it to provide better government or keep the UK intact? I suspect many of us more sceptical types would go along with a Federal system if it were to achieve the latter. But would it? What arrangements will the separatists need to guarantee that any proposed changes will be enough to keep them in the UK for the foreseeable future.

    If they want to leave anyway then this has to be their choice. So let them decide to do that first, or stay as the case may be, and then we can have a more sensible discussion on better government afterwards.

  • John Marriott 14th Aug '21 - 3:03pm

    You know, before anyone obsesses about nations, senates etc., why can’t we in England start getting our house in order by sorting out our local government structure?

    Let’s have the same system as in NI, Wales and Scotland. That means Unitary Councils and, below them, Parish/Town or Neighbourhood Councils. Then we can start to tackle local government finance before we start talking about federalism. The current ‘dog’s breakfast’ in England, with its confusion, duplication and downright inefficiency cannot be allowed to continue any longer!

  • Nonconformistradical 14th Aug '21 - 3:16pm

    @John Marriott
    Without going into details – having a consistent scheme of local government across the country would make a lot of sense. It might then be clear to people which level of local authority is responsible for providing what services – unlike the “dog’s breakfast” as you put it (appropriately) which we have at present.

    The boundaries of such authorities should, maybe after a trial period, be left alone. If a system of PR is used then if/when the electorate within an authority changes adjust the number of councillors, not the boundaries.

  • Peter. Firstly, it’s Kilpatrick, not Kirkpatrick.

    Secondly, I think every federal system on the planet is weighted in favour of smaller nations or states, protecting a union from the tyranny of the majority. This is the obvious compromise that any rational union has to make. Not only do you tend to require supermajorities rather than simple majorities for significant constitutional changes and other such important legislation, but you also tend to limit the influence of larger states.

    That’s how Germany works. That’s how the USA works. That’s how the EU Parliament works.

    Those three examples are radically different. The USA has 50 states (that’s a large number of states) and a fixed two senators per state. Germany has 17 states and its largest state is a greater proportion of the whole population than is the largest US state (but still much less a proportion than England is of the UK). In Germany the largest states (e.g. North Rhine-Westphalia) have 6 members in the Bundesrat (Senate) whereas the smallest (e.g. Hamburg, Saarland etc) have 3 members. The Bundestag (lower house) represents the people by proportional representation. The Bundesrat is NOT involved in all classes of legislation, only those of monetary and constitutional importance and sits once every couple of weeks. The degressively-proportional make-up protects smaller states but it does not give undue influence to small states in a lot of “everyday legislation” in the Bundestag.

    It really isn’t right to present this as a problem the English won’t accept.

    Oh, and you can’t guarantee keeping separatits on board forever. Who knows what sort of horrible disagreements we might have in the future, completely different from the ones we have now? All we can do is try to solve some of the problems we have now, one of which is the horrible conflation of British governance with English governance.

  • John Marriott – hear, hear to unitary authorities. And such unitaries should be small enough to be responsive to local needs, alongside a regional tier of government which should be a sensible distance between those unitaries and the UK parliament. What is not sensible is having small county councils as well as district councils: all the local government bunched together at the bottom of the power pyramid and an enormous gulf between the highest local tier and the national government.

  • John Marriott 14th Aug '21 - 9:19pm

    @Michael Kilpatrick
    The ideal Unitary Council should serve a population of between 200 and 300 million people. Too small and it won’t have enough financial clout and too large and it becomes too remote.

    My county, Lincolnshire, is in terms of population and geographic size not suited to have one Unitary Council. You could make a strong case for its having three as part of an eventual East Midlands region. I would base these three councils on the current seven District Councils, although the City of Lincoln might need special status as its much smaller population would make it less viable as a Unitary Council. Perhaps it should have enhanced powers within a new framework.

  • John Marriott 14th Aug '21 - 9:21pm

    Oops! I meant to say, of course, between 200 and 300 THOUSAND people!

  • Peter Martin 15th Aug '21 - 4:48am

    @ Michael,

    Secondly, I think every federal system on the planet is weighted in favour of

  • Peter Martin 15th Aug '21 - 5:15am


    Firstly, apologies for previously getting your name wrong.

    “Secondly, I think every federal system on the planet is weighted in favour of protecting a union from the tyranny of the majority.”

    The phrase “tyranny of the majority” was used in South Africa as an excuse for depriving black people of the vote. It shows a contempt for the principles of democracy. Just what laws do we have in the UK which in any way disadvantage anyone who doesn’t live in England? The only ones I can think of are that some Scottish residents might have to pay a higher rate of income tax or a minimum price for certain alcoholic drinks. But this isn’t by the choice of central government.

    Just how does Australia have such guarantees? Tasmanians, and other smaller state residents, do well from Australian Federal govt support. Whatever complaints they may have about their Federal Govt, and most Aussies will have a few, the need to be better protected from the tyrannical residents of NSW and Victoria isn’t one I’ve ever come across.

    Finally, I notice you have introduced a concept of a supermajority. Presumably this will only apply after we have somehow attained your Federal ambitions and you won’t be applying the concept to the changes needed to get there in the first place. A majority of one will be sufficient to pass new laws requiring a two thirds majority to ever undo them.

    This is just wishful thinking. You’re dreaming. Politics is supposed to be about the art of the possible. Except, it’s obviously not in the Lib Dems.

  • Peter Davies 16th Aug '21 - 9:05am

    Should not the structure of local government be devolved to regional governments. I see no reason why London should have the same structure as Northumbria.

  • I agree with some of what Peter Martin has said, except I would go further and say I would not, vote for any proposal for a federal U.K. for any reason but particularly not if the main thrust of the arguementnor was to keep the U.K. together, nor would anyone, of any political party with whom I’ve discussed the subject.
    The people of Scotland ,Wales, Northern Ireland and other territories have the right to self determination, let them vote annually if they choose.
    However the constituent members of the U.K.should understand that if the rest of the U.K. have no say at all on at least any withdrawal agreement then there will be at best a legal challenge and at worst a very long cold war. They shouldn’t really expect any less.
    They absolutely have the right to self determination, they don’t have the right to have the only say on how that might happen. personally I hope Scotland has the courage of its convictions.

  • Justin, that’s rather a misunderstanding of what “to keep the Union together” means.

    We are not talking about a mechanism by which we “keep Scotland in union with England” as if that implied some sort of loss of self determination or a trick to trap them in a union they don’t really want. It means a solution which one would hope would offer a better form of union which more Scots would buy into as a positive thing rather the current Union, which is clearly rather unpopular north of the border, and thus wish /themselves/ to keep the union together.

  • Peter Martin 18th Aug '21 - 7:42am

    I would agree that “keeping the Union together” by consent is the best possible outcome but that might not be possible.

    It necessary to have a plan B. This should be that if Scotland has to be a successful as possible whether or not it remains part of the UK. It is simply not in the rUK’s interest for both sides to make the same mistakes as happened with Ireland over 100 years ago.

    Maybe a for of Federalism would have a certain appeal. But is this what Scottish people want? It, and Scotland, can only be successful if they do.

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