Motion made, and Question proposed, That the sitting be now adjourned.—[Mark Tami.]
It is a pleasure to see you in the Chair this morning, Mr. Chope. It is four years since the Standing Committee on Regional Affairs, the body that is supposed to represent English MPs, has met. We do not have a Grand Committee like the Welsh, Northern Irish or Scottish. The English do not have Secretaries of State, Assemblies or Parliaments. The English have something that has rarely met since 1997: the Standing Committee on Regional Affairs. That is the best that we can do for the largest proportion of voters and the largest number of constituency MPs. That is not appropriate.
Today, I shall make some radical proposals for the long-term reform of the British constitution and public finances. They will set me at odds with the policy of my Government and party, but I am convinced that standing still is not an option. The present arrangements are producing growing resentment all over the United Kingdom, particularly in England. I hope that my party will not trap itself by defending the status quo for ever, as that would put the future of the United Kingdom at risk.
This debate has a simple theme. My constituents are living in a half-finished house that costs them money, and they are beginning to resent it. The half-finished house in our country—the United Kingdom—has, like so many historic houses, grown up over the centuries without a master plan and according to the needs or whims of successive owners. Nearly 90 years ago, after a long and bitter dispute, we gave the neighbouring property to its sitting tenants—although some preferred to go on living with us. We spent the next 70 years or so trying to improve our house to make it a better place in which to live and trying to protect it from outside attack. We made no changes to the structure of the house and all the rooms and facilities were shared among all the residents.
However, in the past 10 years, there has been some major remodelling of the property. We converted the upstairs into a separate flat for the Scots and created another flat with inferior facilities in the west wing for the Welsh. We then persuaded the Northern Irish to live in another flat in the orangery—although many of them wanted to live with their neighbours next door. All that remodelling failed to create any special space for the English. They went on living in the property, but the Scots, the Welsh and the Northern Irish were still free to walk in and help themselves to the fridge and the drinks cabinet. They could even make rules for the English that they themselves did not have to follow. Meanwhile, the English went on paying most of the household bills.
More and more of the English, including many of my constituents, are finding that an uncomfortable way to live. They put up with it when there was plenty of money coming into the house, but now that money is scarcer and outgoings are rising, they are beginning to question it. I propose some restructuring of the property, so that we can all live in the way that we want to without imposing on one another. I am also calling for a fair and transparent system of meeting the household bills. That will entail replacing the Barnett formula, which, as we know, was intended to be a temporary expedient that would last six months. However, the formula still regulates the financial relationships between the separate devolved entities of the United Kingdom. Our household settles its accounts through arrangements that were set up in the 1970s for reasons that no one can remember and with results that no one can understand.
Our present constitutional settlement creates anomalies and inequalities. The people of Scotland, Wales and Northern Ireland have acquired distinct powers over key public services and other matters that are denied to the English. Scottish, Welsh and Northern Irish MPs can vote for policies that apply only to the English and that they have never sought for their own constituents. Despite the recent reduction in the number of Scottish MPs, there are distinct disparities in the value of votes in general elections between different parts of the United Kingdom. The Library note on this debate points out that a Scottish elector’s vote is worth 8 per cent. more than an English one, a Northern Irish vote is worth 13 per cent. more and a Welsh vote is worth 21 per cent. more. Where is the equity in that system?
The people of Scotland, Wales and Northern Ireland have used their new powers, particularly in health and education, to make their experience and entitlements notably different from those of the English. Those are funded by a complex and opaque system of financial transfers. To the English at least, it appears that the other parts of the United Kingdom are being shielded from the full financial consequences of their decisions, for example in relation to free personal care for the elderly. In the measured words of Professor James Mitchell of Strathclyde university:
“the current situation in which the Scottish Parliament provides more generous public policies than elsewhere without having to pay the additional cost is leading to a problem of legitimacy in England.”
Before going further, I would like to thank Dominic Webb of the Library’s economic policy and statistics section for two papers of great clarity on the murky subject of the Barnett formula. I have also drawn on the work of David Heald of the university of Sheffield and Alasdair McLeod of the university of Aberdeen.
The financial relationships between the nations of the United Kingdom were created haphazardly and with the minimum of public debate. Money is transferred directly in outright grants to the devolved Administrations. Those grants are strongly influenced by the Barnett formula, which automatically allocates increases in public expenditure to Scotland, Wales and Northern Ireland on the basis of their population. Money is also transferred indirectly by the operation of the UK-wide tax and social security system and through public spending on UK-wide public services, such as defence and diplomacy. Official statistics give us some information about the first of those indirect transfers, but not the second. Finally, money is removed from the United Kingdom by the European Union and partially returned to each of its different regions.
Turning to the Barnett formula, it is universally agreed that no one expected it to last this long—certainly not its author Joel Barnett who is in another place. He did not even know that it had been named after him and it was not mentioned in his memoirs. We have only debated the Barnett formula twice since 1997—once when I initiated a debate in 2001 and once recently. I welcome the commitment of my right hon. Friend the Chancellor to publish a paper on the Barnett formula in the near future, as a contribution to the Calman commission on Scottish devolution. However, as an English Member, I am concerned about the commission’s terms of reference. For a start, it is a Scotland-only review and it will not look at the impact of financial transfers to Wales or Northern Ireland, still less at their impact on England. More importantly, the review aims to come up with recommendations
“that would enable the Scottish Parliament to serve the people of Scotland better, that would improve the financial accountability of the Scottish Parliament and that would continue to secure the position of Scotland within the United Kingdom”.
The review will be paid for largely by English taxpayers. It is hard to reconcile all those aims.
As many authorities have pointed out, the Barnett formula does not determine the overall size of the grants to Scotland, Wales or Northern Ireland; it is a mechanism for increasing those grants automatically. The formula therefore perpetuates favourable settlements that were made years ago. However, that was not its intention; quite the opposite. It was meant to produce convergence in public expenditure per capita in each part of the United Kingdom. That has simply not happened. There is a persistent and widening gap between different countries and regions within the United Kingdom in identifiable per capita public spending. Identifiable public expenditure means that which is directed at a specific country or region, or that which has generated a payment or benefit to its inhabitants. That therefore excludes the UK-wide items that I mentioned earlier. However, it does cover 83 per cent. of all public expenditure.
Let me unfold some of the figures. In 2007-08, identifiable per capita public expenditure for the UK was £7,790 per person. That works out at £7,535 for the English, £8,577 for the Welsh, £9,179 for the Scottish, and £9,789 for the Northern Irish. Out of all the English regions, the south-east does worst. Each of my constituents receives only £6,512 in identifiable public expenditure. My constituency has the fifth and sixth poorest wards in England. I should like an explanation of how it is that we pay the most tax and it is shifted around the regions but not spent in my constituency. That is undemocratic and unfair. To rub salt in the wound, the south-east region is also one of the most heavily taxed.
Other hon. Members can dispute the calculations—although they come from the Library—but they explain why my constituents are becoming tired of living in a half-finished house. The time has come to finish the building and complete the billing arrangements for all the people who live there. All the peoples of the United Kingdom should have the same power to shape the laws and services that shape their lives, but they should also have the same responsibility for paying for them.
That is why I propose a new kind of Parliament. I accept that the journey will be tortuous and argumentative. Therefore, it cannot be done overnight. I propose a 10-year constitutional convention, at the end of which, I would hope, we would agree to four separate lower Parliaments representing England, Wales, Northern Ireland and Scotland. Each would have the same powers. The budgets of the four lower chambers would be settled by those Parliaments. There would not be an income tax for the United Kingdom. There would be an income tax locally; the lower Parliaments would be free to raise income in whatever way they wished to do so, for example by a sales tax.
Why do I say that? I do not have the figures, but since 1945 the Governments of this country, irrespective of party, have spent billions and billions of pounds trying to create wealth in this country. However, in the last year, the only three regions of Britain that are a plus on the Exchequer are the east of England, London and the south-east of England, so even though we have handled massive subsidies relating to the public sector and private sector investment from overseas, we have yet to find the entrepreneurial spirit in many of the regions and nations of this country. We can go on thinking that we can do that, but I remind hon. Members that in China, as one example, the growth rate in the economy this year is 10.6 per cent. That is 10.6 per cent. of what will be the largest economy in the world in 2020. If we care about what is happening in China, India, Russia and Brazil, we have to frame our constitution and the funding of that constitution with a modern way of looking at what is coming over the mountains, especially from India and China.
I am British and proud to be British; I sign into hotel rooms as British. I want to retain the United Kingdom, so the solution for me constitutionally is to place over the four lower chambers an overarching Parliament, whether it is called a senate or a house of representatives, that will bind in the four countries of the United Kingdom. I would abolish the House of Lords. How each chamber voted and what it did would be a matter for the lower houses, but the upper house might deal with issues such as the environment and foreign policy. It would be for the constitutional convention to resolve that.
It would be a long and contentious process to agree the powers and responsibilities. That is why I propose a consensus-building mechanism in the form of the convention, with representatives of all the parties and each nation and region of the United Kingdom. Its deliberations would be in public and published and would be open to online participation by voters.
During its 10-year life, the convention would also take the opportunity to define a relationship between all the chambers and the European Parliament. There is a major problem with the MEPs and the 27 countries. Only in Finland are the MEPs charged with coming back to talk in the Chamber in Helsinki. I think that that is a very good idea. I would like to see MEPs not charging down to Strasbourg every fourth week, but being told to come to their national Parliaments to give an account of what they are doing, so that what happens in Europe matters to us in the national Parliament. There is a grave error in the constitutional way in which Europe works currently.
I would expect the convention, at the end of the 10 years, to come up with a set of proposals for each of the chambers. How they vote and so on is a matter for them. All those proposals should be put to the peoples of the United Kingdom in a referendum. I hope and believe that, at the end of the 10 years, the convention would make our government and finances clear, more 21st century than 19th, with a separation of powers and responsibilities, and revenues understood and endorsed by our citizens in an open and transparent process. In each chamber, every representative and every voter would have equal power. In the UK as a whole, all taxpayers would know where their money was. There would be no hidden transfers, and all taxpayers would have control over the spending of their taxes.
It has been argued that a federal system cannot work in the United Kingdom because England is so dominant in terms of population and economic strength. I disagree with that argument. Whatever system we have, the English will always be bigger—look at the size of the country, the population and the economy. However, we can have a clear separation of powers to allow each nation to create a sphere of influence of its own, escaping the dominance of the English nation at the price of relinquishing any subvention from the English nation. I believe that only a separation of powers will allow the survival of British politics and parties on non-national lines. The real danger is in keeping the status quo.
Of course I accept that my proposals are contentious, but we simply cannot carry on as we are. The present constitutional and financial relationships cannot endure. They are arbitrary and opaque, and allow everyone in the United Kingdom to believe that the system is unfair to them. The resulting mutual resentments will lead, I believe, to the break-up of the country in confusion and acrimony. Unless we introduce a constitutional convention, that will happen.
It was interesting to listen to the introduction by the hon. Member for Sittingbourne and Sheppey (Derek Wyatt). He raised some important points that I did not intend to cover, and which I still do not intend to cover because he covered them so well. I am not as certain as he is about the Barnett formula, but I welcome anyone trying to tackle the issue and he is certainly doing that. Perhaps the English would not be worried about paying a little more, as long as they were left to deal with their own money. It is the fact that we both pay money to other countries and spend that money that worries people, particularly in England. However, I will deal now with the issues that I consider most important.
Residents of the Isle of Wight are of a particularly independent frame of mind, but they are certainly not alone in being concerned about the unfairness of the present constitutional framework. Years ago, the West Lothian question was pondered by many, with little hope of the circle ever being squared. Since then, we have seen the installation of a Scottish Parliament, ending the debate about whether Scottish-orientated legislation should be made at Westminster. Now, with the Scottish Parliament established, Stormont set up and Wales coveting complete devolution, where does England fit in? What about the West Wight question?
Retaining a Parliament for United Kingdom-wide legislation is essential. There needs to be one centre of law making for the United Kingdom. We are still, undoubtedly, a united kingdom bound together by centuries of common history, language and culture. That is reflected in how certain matters are administered, and our common heritage should not be forgotten. The devolved Administrations have proved popular. With that in mind, why should we not have a separate institution to deal with English-only matters?
Unlike some, I am not in the business of squabbling over which legislature should have the most power. I merely propose the notion that it may be time to mirror our neighbours’ constitutional arrangements for the benefit of England and for the continued existence of the United Kingdom. The belief is now widespread throughout England that the arrangements should be balanced more fairly. The votes of Scottish Members can be marshalled to overturn the views of English Members of this House, as they were on university top-up fees, when Scottish constituents will not be affected. However, Scottish MPs are not properly answerable to their electors on English matters. I believe, along with many others, that it is time to address that fundamental question.
I am grateful to my hon. Friend for giving way. Is not the problem worse than he describes? A Scottish Westminster MP can vote in this place on hospital provision for my hon. Friend’s constituents on the Isle of Wight, but not on hospital provision in his or her constituency in Scotland, because it is a devolved matter for the Scottish Parliament. Scottish Westminster MPs can interfere in English affairs, but are not able to interfere in many matters in their own constituencies.
My hon. Friend is absolutely correct. What is wrong is not that the Scottish here are unable to vote on Scottish matters, but that the Scottish here are voting on what is happening on the Isle of Wight and on other English matters.
The wheels of political evolution will not stop turning. Public concern is increasing and the question of an English Parliament continues to climb further up the agenda. What are we going to do when it reaches the top?
It is a great pleasure to serve under your chairmanship, Mr. Chope.
I congratulate the hon. Member for Sittingbourne and Sheppey (Derek Wyatt) not only on obtaining this debate but on his thoughtful and considered contribution. I agree with his central point, that we are dealing with a half-built house—a constitutional settlement that is unfinished. Devolution for Scotland was a political necessity, as it was for Wales, but the structure of the constitution left after devolution was not thought through. That is why I entirely agree with what I take to be the hon. Gentleman’s central proposal, which is that a constitutional convention should take place over an extended period to produce a new constitutional settlement that is fairer and clearer for all the people of the United Kingdom.
I agree with what the hon. Gentleman said about MEPs and their place in our political life. Their separation from us is one reason for the apparent lack of democracy and democratic legitimacy faced by the European Union. However, although I am not sure how the constitutional convention would end, I am pretty sure that the hon. Gentleman’s proposal would be a major runner in the process. I also agree with him that the Barnett formula needs to be reviewed.
There is some public feeling about the West Lothian—or West Wight—question. There is a constitutional anomaly, as the hon. Member for Kettering (Mr. Hollobone) said. However, I do not believe that it bothers people much, as evidence from public opinion polls shows. There is an old saying in Hollywood: if someone says to you, “It’s not the money, it’s the principle,” then it is the money. That is the point that needs to be grasped.
It is true that if the Barnett formula were to be properly reviewed, if we rethought its needs basis and considered again precisely where the money should go, it would not necessarily have the dramatic effect that those who call for a review sometimes seem to hope for. In any case, the figures on which the arguments are based are not entirely straightforward. The hon. Member for Sittingbourne and Sheppey said that the figures usually cited are based on about 80 per cent. of public expenditure and do not include such things as defence. That is based on the theory that defence, as a service, is for the entire national community. However, that is not quite true when it comes to expenditure, because defence expenditure is rather more specific in particular areas than is the service.
If one considers expenditure by region, it can be seen that London does rather well, even without defence. It comes well up the table on expenditure per head, higher even than Wales. That makes me wonder whether there is a relationship between demand for devolution and how much money can be got from the Government. Many, many years ago, I wrote my first academic article: I studied regional expenditure and policy in the 1970s, and the only useful conclusion that I could draw was that the best predictor of regional expenditure was votes for third parties in the 1974 election. I wonder whether the political structure has now changed slightly, such that, to the extent that there is a demand for regional devolution, one can get money out of central Government. The south-east and the eastern area of the country is my area, and I am a Liberal Democrat in favour of regional devolution, but to be frank there is little demand for it there. Those are the areas that get the least money.
Underlying the comments of the hon. Members for Isle of Wight (Mr. Turner) and for Kettering—this is slightly less true of the comments of the hon. Member for Sittingbourne and Sheppey—about where we should go from here and what constitutional arrangements should be put in place is some confusion about the idea of representation. If English MPs were to join together to defend the interests of England as England, there would not be a problem. There are so many of us that we could abuse our position to do whatever we wanted. The problem is not representation in the sense of protecting the interests of our constituents—we are in a strong position to do that as English MPs. The problem is set to arise if Government proposals for specific measures may get through only with the votes of non-English MPs, despite the fact that the measures affect only England. That is a different sort of representation. That is political representation—the representation of political views.
There are several problems with the idea of representation put forward by those who argue for English votes for English laws. The first is that it does not apply all the way down. When Parliament was dealing with the Greater London Authority Act 1999, we did not have votes for London MPs only. When we discuss the Bournemouth Bill, we do not restrict debate to MPs from Bournemouth.
Secondly, from a Liberal Democrat point of view, the most important point is that MPs elected for English constituents are not representative of English political opinion. That is because the electoral system—the first-past-the-post system—is not representative of political opinion in that way. It is difficult for opponents of proportional representation to argue in the way they often do for English votes and laws. Those of us who support PR have less need to worry about the anomaly in the first place. Why? The main argument against PR is that it leads to minority Government, and it is true that that outcome is more frequent than coalitions. However, it is interesting that all the proposals except that made by the hon. Member for Sittingbourne and Sheppey imply that we could have a UK Government with a majority at UK level, but a minority in England.
Those who propose such an arrangement think that that is all right. In fact, the right hon. and learned Member for Kensington and Chelsea (Sir Malcolm Rifkind), who has been arguing for what might be called the “English Committee Stage” solution, said in The Scotsman on 23 April this year—an interesting date—that, under his proposal:
“On entirely English business, the government may not get its way. Some people say the government wouldn’t be able to function. That is absolute rubbish. Alex Salmond doesn’t have a majority in the Scottish Parliament, but nobody says Scotland is ungovernable.”
It is interesting that those who propose such interim solutions to the problem of English representation do so in a way that undermines their simultaneous objection to proportional representation. They cannot have it both ways.
The main argument for the first-past-the-post system is that it exists to elect a Government, not to represent political opinion. That is the clearest argument for the present system. However, if we apply first past the post to the problem of English representation, we must conclude that there must be a separate Government for England, and not simply a separate representative body. Will people find that acceptable? There are some problems with such a solution.
That is also the conclusion if we think about maintaining one United Kingdom Government who also run England. It is perfectly possible, especially under the present arrangements, for a Government to have a majority in the UK, but a minority in England, as I said. However, something far more radically challenging is also perfectly possible: namely, a situation in which a UK Government are formed from a party that is in a minority in England, when another party have a majority in England. That would be an extraordinary situation. Such a Government would face defeat on everything all the time. In fact, the Opposition’s position would also be quite extraordinary, because they would have a majority in the legislature for their part of the Kingdom, but no ministerial office or responsibility.
Solutions to the problem that do not include a separate English Government face extraordinary problems of coherence. However, if we look at public opinion and the demands for some sort of solution to the West Lothian question, we see little support for a separate Government, because, as is well known, people are not in favour of creating extra layers of paid politicians. That was one of the main reasons why the referendum on regional devolution in the north-east went the way it did—the idea went down. People do not like the idea of those extra layers.
The hon. Gentleman seems to be saying that we must have the same size of Government at UK and England level, but surely England and say, the Conservatives, would deal with two thirds of the matters—perhaps not the most important matters—and the other party would deal with a few important matters, such as defence and the national Exchequer. One lot would be doing something at English level, and some other lot would do other things at UK level.
Those would be two separate Governments. The UK Government would be made up by one party, and a separate English Government by a different party. That would be a proper federal system like Germany’s, where Governments at federal level can have different political complexions from those of the Länder.
The question is whether the coherent cure that the hon. Member for Sittingbourne and Sheppey proposed is worth the disease. At the moment, the proposal seems to be like taking a sledgehammer to crack a nut, even if it is a coherent sledgehammer. The problem is not as great for those of us who support proportional representation, because PR would be far less likely to produce conflicting political results in the first place. First past the post exaggerates political differences and produces exaggerated results in different parts of the country, whereas PR would reduce them. Although contradictory results are not impossible under PR, they are far less likely.
The first priority is proportional representation. The problem we are discussing today is, it seems, a third-term problem. That is helpfully in line with the timetable that the hon. Gentleman proposed for his constitutional convention. I am therefore fully prepared to wait.
It is always interesting to hear the Liberal Democrats’ arguments for proportional representation. We will never be convinced by them, but we understand exactly why it is always their first priority. If we turn the clock back, we will find that the Liberal party did not stand for PR 100 years ago. Then, they wanted to be in government, but they now know that they will not be in government. They were not in government for most of the last century and they will not be in this century, so we forgive them for always making proportional representation their top priority.
I heartily congratulate the hon. Member for Sittingbourne and Sheppey (Derek Wyatt) on introducing this debate. It is a welcome opportunity to discuss an extremely important matter—I am only sorry that more Members of Parliament do not make it a high priority. I am nevertheless pleased to see that six of us are in the Chamber; what we lose in quantity we make up for, as ever, in quality. The issue must be discussed. I believe that that ought to happen in Government time, but as that has not happened, the hon. Gentleman is to be congratulated on opening the matter up. I am pleased to see the Minister—by my calculations looking at the clock, he will have plenty of time to answer all the matters that have been raised this morning. I will raise only a few more for him.
The hon. Member for Sittingbourne and Sheppey was right that this is unfinished business, as it has been for a long time. The issue became known as the West Lothian question, rightly, because the then Member for West Lothian, Mr. Tam Dalyell, brought the subject up again and again in the 1970s, 1980s and 1990s, when devolution for Scotland was discussed repeatedly in the House of Commons, and finally was put to more than one referendum in Scotland. Mr. Tam Dalyell was right to ask the question and to highlight the anomaly, and no Government have come up with an answer to the West Lothian question. The current Government want to sweep the whole matter under the carpet and have, indeed, successfully done so for 11 years. They have simply refused to address the problem, although I am sure that they would not answer it even if they did. That is simply not fair.
Does my hon. Friend agree that pushing the issue under the carpet for 11 years has made the situation far worse, particularly in some constituencies in England?
Yes. My hon. Friend is correct, and I was about to make precisely that point. The constitution of the United Kingdom is imperfect, and there is an imbalance on this issue, as there is on many others. We do not pretend that our constitution is perfect; what matters, however, is not that it should be a perfect work of academic excellence—we are not looking for a first in constitutional law from Cambridge—but that it should work for the United Kingdom and make the Union work. My top priority is the Union of all the parts of our United Kingdom, and that is what Conservative Members want to see preserved and improved in anything that is done on this issue.
As my hon. Friend rightly said, however, the situation has got worse over the past 11 years, and that is because of the perceived unfairness. Now, I would argue that the unfairness in the constitution and the Barnett formula is not as bad as some people make it out to be; indeed, with all respect to the hon. Member for Sittingbourne and Sheppey, who argued his case very well, it is not as bad as he calculates it to be. However, we do not know how bad it is, because the Government have not properly considered the matter. As my hon. Friend the Member for Isle of Wight (Mr. Turner) rightly said, therefore, the perception of unfairness has grown. The perception that some parts of the United Kingdom are not getting as good a deal as others has grown, and resentment has grown, too. I would argue that there is no need for that resentment, but it is essential that it is addressed. As the hon. Member for Sittingbourne and Sheppey correctly said, it cannot be fair that people who are elected to represent Scottish constituencies are making rules for the English that they themselves do not have to follow. That is the worst of the perceived unfairnesses, but the Government have refused to address it.
The hon. Gentleman rightly, and most interestingly, analysed the weight of the vote in different parts of the United Kingdom. However, when we elect a Government—to take up the point made by the hon. Member for Cambridge (David Howarth)—we are not trying exactly to represent different people in different parts of the United Kingdom, or indeed in different constituencies; we are generally electing a Government. That takes me back to the idea of the perfection of the constitution. We would have an unworkable Government if we tried to have perfect representation and to ensure that Parliament exactly reflected the proportional make-up of the people of the United Kingdom in economic, ethnic or any other terms that we might care to mention. That simply would not work.
What matters is that we construct a system that works, that is perceived as fair and that gives people in all parts of the United Kingdom the feeling that they are being fairly governed. Indeed, one of the principle rules of constitutional development is that arrangements should not only be fair, but be seen to be fair. That, of course, is why there is now a problem with the Barnett formula, and I am pleased that the hon. Member for Sittingbourne and Sheppey has given us the opportunity to raise the issue.
Again, the Barnett formula is not as unfair as it is sometimes made out to be. After all, Scotland is not all the same; there are enormous disparities between the industrial belt in central Scotland, the borders and the agricultural areas in the north, just as there are enormous differences in the region called the south-east of England. The hon. Gentleman rightly said that his constituency contains areas that are calculated as deprived, but which, because they are in the south-east, do not necessarily get the financial subsidy that he might hope for. The same is true in my constituency, where some areas are very much in need of greater social, economic and other input, but do not get it because the wider area is not perceived to be in need. Likewise, Scotland is not one homogenous area. The Barnett formula must therefore be calculated in a way that takes all parts of Scotland into consideration. It might be said that Glasgow, for example, equates to the centre of Birmingham, Manchester or Newcastle, but that does not mean that the whole of Scotland equates to the whole of England.
My point is that this is not a simple matter and that it cannot be distilled into simplistic terms. Indeed, I heard Lord Barnett eloquently give evidence to the Select Committee on Justice a few weeks ago. He said—I am not quoting him, but trying to reflect his comments exactly, and I am sure that hon. Members will check what he said in due course—that he had intended to put together a fair funding formula that operated on a needs basis for the different parts of the United Kingdom, and particularly Scotland. He said that it had never worked on a needs basis, however, and that he would like to see it do so. There are ways in which the Barnett formula could be improved without rocking the boat of constitutional reform. Its perceived unfairness is greater than its actual unfairness, although that does not mean that the issue does not have to be addressed—of course it does. My hon. Friend the Member for Isle of Wight was absolutely correct in all that he said in that regard.
I take issue with the main premise of the hon. Member for Sittingbourne and Sheppey. We do not need another Parliament—we have too much government already. As the hon. Member for Cambridge rightly said, and as was decisively evidenced in the referendum in the north-east of England a few years ago, the people do not want more government, more Parliaments or more politicians; they want taxpayers’ money to be spent on supporting the people, not Parliaments and politicians—we have quite enough politicians at various levels already. I therefore take issue with the hon. Gentleman’s assertion that the answer is a federal system. Why would we want a federal system? Would it be so that it would fit in with the idea of a European superstate or so that the United Kingdom could be divided into bite-sized chunks, ready to be gobbled up by a federal Europe?
The idea of the EU gobbling up England is as far-fetched as I have heard for a while. However, I did not have Europe in mind, but the English. As a result of the discussions in the House over the past 12 years, the English have not been given a fair constitutional settlement.
I am glad that the hon. Gentleman has made it clear what he thinks about Europe. I do not believe that the United Kingdom can be gobbled up by Europe or anyone else, but if it is split up into bite-sized chunks, it could be prepared to become part of a federal Europe. That is the last thing that I, or any Conservative Member, would want to see.
A more commonly held view is the one proposed by Professor Vernon Bogdanor at Oxford. He says that the centralisation of power in Europe has the opposite effect within member states. It tends to make those member states less decentralised, and more centralised. What the hon. Lady is saying is the opposite of what appears to be going on.
It is all about perception, is it not? The hon. Gentleman possibly perceives things from a rather different angle from me, but that is what democracy is all about, is it not? In his consideration of the European angle, the hon. Member for Sittingbourne and Sheppey brought forward a most interesting proposition, which is that Members of the European Parliament should, in some way, be held accountable by their member states. That is an issue that is worth exploring, and I hope that all sides of the House will consider that possibility.
The real problem is the West Lothian question. The fact is that Members of Parliament who are elected to represent constituencies in England should have a decisive say in matters that affect only England. That is the simplest way in which I can put it. There are various ways in which we can make that happen. One of them is the hon. Gentleman’s idea of a federal system, which I personally reject. My right hon. and learned Friends the Members for Kensington and Chelsea (Sir Malcolm Rifkind) and for Devizes (Mr. Ancram) have both, in recent months, proposed very elegant solutions along the lines of an English Grand Committee or a ruling by the Speaker on matters that affect only England. Those ideas should be examined in greater detail and considered for a future Parliament.
Likewise, I expect that my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), who, along with his commission on the constitution, has been examining the matter in detail for some time, may well propose another similar solution. Such a solution may suggest that giving English Members of Parliament—Members of Parliament who sit for English seats—a decisive say in matters that affect only England can be properly addressed without creating further tiers of government or more bureaucracy than we need and without costing the taxpayer enormous amounts in constitutional reform, but in a way in which the Union is preserved and enhanced. I understand why the Government are so reluctant to discuss this matter and to come forward with their own proposals.
Before my hon. Friend moves on, does she not agree that English Members should be in the House one extra day—or perhaps Scottish, Irish and Welsh Members could be in the House one day fewer—so that we can discuss English matters?
As usual, my hon. Friend has proposed a good and logical solution. It is similar to the possible solutions proposed by my right hon. and learned Friends the Members for Kensington and Chelsea and for Devizes. Although I cannot anticipate what my right hon. and learned Friend the Member for Rushcliffe will propose, it could be along those lines as well. There are ways in which this matter could partially be put right. We will not have a perfectly balanced constitution, but we could have one that is perceived to be much fairer than it is at present. It is that perceived unfairness that I want to put right—and I want it to be seen to be put right—because the growing resentment within some political movements in England will give rise to English nationalism, which will be just as bad as Scottish nationalism, or any other kind of nationalism, which seeks to divide one set of people from another at a time in our history—and that of the world—when we should be coming together and not looking for divisions. I do not want to see nationalism that draws lines, but a Union that brings people together.
However, I understand why the Government do not wish to discuss the matter. It is because of the 59 seats that come from Scotland—or the 59 Members of this House who are returned from Scotland. At present, 40 of them represent the Labour party, which is a low figure compared with the past 50 or 60 years. It is usually a higher proportion. Therefore, the current Government are terrified of losing 40 votes in matters that they want to push through this House. Naturally enough, they do not want to address the issue, especially as two of those 40 Members are the Prime Minister and the Chancellor of the Exchequer. I put it to the Minister and the House that if we do not correct the perceived unfairness, then we will allow resentment to grow. That resentment is not good for the constitution or for government. Government should be fair, and I will be interested to hear what the Minister has to say about how this Government propose to correct the perceived unfairness.
It is a pleasure to be here under your distinguished chairmanship, Mr. Chope. I am grateful to everyone for leaving me a very reasonable amount of time in which to address all of these complex and important issues. I congratulate my hon. Friend the Member for Sittingbourne and Sheppey (Derek Wyatt) on securing the debate. As we have heard, these are immensely important issues for our country and it is good to have the opportunity to discuss them. We have had a number of very interesting contributions from the hon. Members for Epping Forest (Mrs. Laing), for Isle of Wight (Mr. Turner), and for Cambridge (David Howarth) and, briefly, from the hon. Member for Kettering (Mr. Hollobone), who sadly had more pressing business than to stay for the conclusion of this debate.
We have had a very interesting debate, but I am afraid that I can agree with very few of the propositions that have been put forward. Instead, I want to make the case for the Union, for the United Kingdom, and for the measures that will support it. The starting point for everyone we have heard today is that the Union is a very precious institution for all the peoples of these islands and that we must do everything that we can to preserve and enhance it. I was very pleased to hear the stirring defence of it by the hon. Member for Epping Forest. I agree with every word that she said about that, but unfortunately with very little else that she said, but I will speak about that in a moment.
What lies at the heart of all the concerns that have been expressed today is a belief that, somehow, devolution has threatened the continued existence of the Union. That belief is mistaken. It is our view that devolution is not a threat to the United Kingdom; it secures the Union. The virtue of our Union’s constitution is that, for centuries, it has been able to accommodate the differences within these islands. It does so on the basis of asymmetry. Constitutional arrangements to protect the interests of minorities inevitably differ from arrangements to protect the interests of the majority, and this nation, as hon. Members have said, has an asymmetrical balance of power in which England is overwhelmingly dominant in terms of both population and representation in Parliament.
Asymmetry is what gives rise to the West Lothian question, among other things, but it is not the same as imperfection. The hon. Lady sought to say that it was, but I am glad that she slid away from that proposition in her later remarks. At the beginning, she seemed to be hankering after some perfect symmetry. I think that that also lies behind the concerns of my hon. Friend the Member for Sittingbourne and Sheppey.
Asymmetry in our constitutional arrangements is nothing new. It has existed for hundreds of years. Legislative devolution in Scotland built on the distinctive Scottish institutions that remained after the Union of 1707, including the legal and educational systems. Extensive administrative devolution, built around the office of Secretary of State for Scotland from 1885, also provided the basis for the creation of the Scottish Executive and Parliament.
I agree entirely with the Minister that that asymmetry is necessary in practical terms and perfectly acceptable. As a Scottish lawyer, I could not possibly disagree.
I am grateful to the hon. Lady for confirming that on that issue, at least, we are in the same place. It is important to recall that asymmetrical constitutional arrangements are nothing new. Wales has its own history within the Union. Until the early 20th century, Wales and England were administered as one, but in 1964, the first Secretary of State for Wales was appointed with their own Department, the Welsh Office. During the following 30 years or so, that role was progressively widened. The creation of the Welsh Assembly in 1999 put domestic Welsh policy issues under the democratic control of the Assembly.
Northern Ireland has been served for many years by a separate civil service, and separate Northern Ireland Departments have carried out the functions of their Whitehall counterparts. Such asymmetry is not confined to the United Kingdom. It is a feature of most modern democratic constitutions around the world, as the protections necessary for the more dominant partners in any state are not the same as those necessary for minorities.
We believe that the creation of a separate Scottish Parliament, Welsh Assembly and Northern Ireland Assembly has enabled better local decision making in response to local issues. It empowers local people and, to pick up the point made by the hon. Lady, local people perceive it to be fairer. We believe that that strengthens the Union, which is enormously important. We are bound together not just by a common identity and citizenship but by the enduring interests of all the nations of the Union.
All parts of the Union share resources and pool risks, to the benefit of each. That is a particularly important point to make to the House. At this time of extraordinarily rapid and extensive change in the world around us, pooling risk is important to all of us. We share access to natural resources and, more importantly, to the human resources made up of all the diverse peoples living here. The risks that we pool and carry together involve inherent uncertainty and are increasingly volatile. How do we thrive in an increasingly competitive globalised economy whose demands change ever more swiftly and radically? How do we manage the constantly evolving threat of international terrorism and major challenges such as climate change? In all those matters, we believe, as I hope everybody in this Chamber believes, that the United Kingdom is stronger together than apart. The hon. Lady made that point powerfully.
There have always been asymmetrical constitutional arrangements in the United Kingdom, both before and since devolution. They reflect the different sizes, historical backgrounds and aspirations of the different parts of the UK. That is true of England as well. Again, the hon. Lady made an important point: there is also immense diversity within the UK’s constituent nations. The south-east is very different. The area represented by my hon. Friend the Member for Sittingbourne and Sheppey has distinctive characteristics and is quite different from other parts of the south-east, London and my own constituency of Swindon. Such diversity is a source of strength for all of us. We should celebrate it, and our constitutional arrangements must inevitably reflect it.
I come to the specific measures suggested in this debate. My hon. Friend the Member for Sittingbourne and Sheppey is imaginative and creative in his policy making. He is a policy entrepreneur who brings great radicalism and insight to all his proposals, but I am afraid that on this occasion he is wrong. He argued for radical new constitutional structures, and some of his remarks found favour with other hon. Members who have spoken.
Before I address the points raised by my hon. Friend, I should like to correct something he said. He seemed to be suggesting that this Government were somehow conservative and predisposed towards the status quo. If he looks back on our record of constitutional reform and renewal in the past 11 years, he might wish to reconsider that attitude. We are perfectly willing to undertake constitutional reform when we think that it is merited, and we have done so consistently since 1997.
With respect to my hon. Friend, his proposals are impractical and might in many ways be dangerous to the future of the United Kingdom. As other hon. Members have recognised, if any federal structure were imposed in the United Kingdom, it would be dominated entirely by England. England has more than 85 per cent. of the population and creates more than 80 per cent. of the gross domestic product. Any separate English Parliament or equivalent would dominate the Union’s macro-economic needs through decisions on spending policies, and the UK Parliament, however constituted, would be left trailing in its wake.
Any federation where one partner has 85 per cent. of the economic strength and the population simply cannot work. That is why constitutional experts generally reckon that only federations where no one partner has more than 30 per cent. of the population and the economic strength are viable. Nowhere in the world does such an unbalanced federation work.
I hear the Minister say that, but he has not explained why. Can he do so?
I shall come to the explanation, because I want particularly to address the hon. Gentleman’s comments about an English Parliament and what I took to be his advocacy of, or certainly his constructive engagement with, that idea. I shall address that quite specifically.
To sum up my remarks on the proposals made by my hon. Friend, he made a radical proposal for reform of the House of Lords. We are bringing forward our own proposals for House of Lords reform, and I am sure that he will be interested to see them shortly.
Does my hon. Friend think that it is appropriate that the English have one regional Committee, which has not met since June 2004? Is he saying that he is proud of that record? I think that it has met only five times in 11 and a half years. Is that how we should treat the English in the House?
I shall address the question of Select Committees now, because I want to address the idea of an English Grand Committee and say what we are doing to introduce proposals to reflect my hon. Friend’s concerns. I accept that we need to do more to consider how better to represent the regions of this country. Since last year, we have been introducing proposals, which I shall address shortly. My hon. Friend asked me what I am proud of. I am proud of this Government’s record on constitutional reform and renewal. It is genuinely radical, and it is doing a great deal for the people of this country.
There has been a lot of discussion about an English Grand Committee. The hon. Member for Epping Forest said that it should be actively considered. We are actively considering it. We have actively considered it, and it is difficult to see what benefits such a Committee would bring. An English Grand Committee that directly mirrored the other two would have 529 members. It would be impossible for such a Committee to work in the same way as other Grand Committees.
We have, however, proposed the establishment of regional Select Committees to ensure that English regions’ different views are taken properly into account, which would support the network of regional Ministers that we have introduced, which is already working well. We believe that to be a much more effective way in which to ensure that the varied needs of the English people are given focused consideration, particularly in relation to matters that cross the boundaries of even the largest local authorities. Although I cannot agree with my hon. Friend’s proposals in their entirety, I hope that he would agree that our proposals at least address the sorts of concerns that he outlined, and believes me when I say that we will bring this forward.
I shall give way to both hon. Members in a moment.
If we take further the proposal for an English Grand Committee to consider English legislation, we will be led down a slippery slope towards an English Parliament, which is an issue that I want to address, and the hon. Member for Isle of Wight has raised some concerns that I will also address shortly. For the reasons that I have given, however, I believe that such a policy would ultimately lead to the break-up of the United Kingdom.
The Minister has anticipated my question, and answered it with the reference to a slippery slope towards the break-up of the United Kingdom, which of course was said about the Scottish Parliament. However, it is precisely to stop us further descending down that slippery slope that some of us have proposed English votes for English laws.
I give way to the hon. Member for Isle of Wight.
The problem is with the maps that have been drawn, and which keep popping up. The Isle of Wight is more like Devon than Berkshire, and Berkshire, or at least Reading, is more like Swindon than Oxford. Such points are not understood by those who follow the maps.
I completely understand the problems with drawing boundaries, but of course such issues will always exist.
Before the Minister moves on, how is it envisaged that the regional Select Committees will work?
And when?
Are the Government still insisting that the Labour party must have a majority on each Committee? That would lead to impossible difficulties in regions where it does not have sufficient members, and would seem to undermine the idea that the regional Select Committees should be representative of their regions.
We will bring forward details shortly, so the hon. Gentleman will just have to be patient for a few more weeks—that also answers my hon. Friend’s sedentary question.
This debate highlights the very difficult problem, for all of us who must confront such issues, of the composition of such Committees. However, I shall come to the nub of the question about an English Parliament, or Grand Chamber, which in effect would be a precursor to an English Parliament. Such questions are raised very frequently. At the heart of the promotion of such measures lie two myths, which the hon. Members for Isle of Wight and for Epping Forest have perpetuated again today. The first is that it is in the Labour party’s narrow self-interest to resist them, because we do not have a sufficient majority of MPs in England, but historically that simply has not been the case.
I shall take up a little of the Chamber’s time to give a few figures for recent elections. In the following elections, the Labour party had a comfortable majority of English MPs: 1945, 1966, 1977, 2001 and 2005. So the hon. Lady’s comments simply are not rooted in fact. In two elections—1964 and 1974—the Conservatives had a majority of English MPs under a Labour Government. In October 1974, and in 1950, there was no overall control. Astute Members will have spotted that when a Labour Government have had a comfortable working majority, over the UK Parliament as a whole, they have also had a comfortable majority of English MPs, as logic would suggest—irrespective of what she implied. Under a very narrow majority—as there was in 1950, 1964 and 1974—there have been problems, but of course any Government with as narrow a majority as that which the Labour Government had following those elections will have all kinds of other problems in managing their majority. It simply is not true, therefore, that our opposition to the sorts of proposals put forward today is in the Labour party’s narrow self-interest. We are concerned solely with the preservation of the Union.
I do not for one second dispute the Minister’s figures, or indeed his statistical analysis, but surely he and his fellow Ministers, when planning Government policy, look not to past statistics, but to the statistics of the present and the possible statistics of the future. At the moment, it is not likely that a Labour Government, if elected in the next few years, would have a large and comfortable majority.
On the basis of historical evidence and projections, if a Labour Government are re-elected with a comfortable working majority in the House, they will most likely have a comfortable working majority of English MPs. The hon. Lady can form her own views about whether that will happen, but that is a completely separate issue. If the Conservative party’s representation in Scotland remains the same—it has a very small proportion of the Scottish MPs—under her arrangements, it would have considerable difficulty passing Bills relating only Scotland in the UK Parliament. I ask her to consider that.
Will the Minister give way?
I hope that the hon. Lady will forgive me for not giving way, but I want to come on to the second myth. I was—very generously—left a lot of time at the beginning of my remarks, but I have many more important points to make about, for example, the Barnett formula, among other things, which I am sure that hon. Members would like to hear.
A second myth has been floated: that it is possible to define an English Bill. It is in fact extremely hard, and anyone who has observed the legislative process in this House will realise just how difficult it would be to define one. The Higher Education Bill was adduced as an example of how the current system is unfair. At the time, in 2004, that Bill was dubbed a West Lothian Bill by the Conservative party, because student finance is devolved. I think that point was made earlier. However, part 1 of the Bill provided for the Arts and Humanities Research Council, which extended to the whole of the UK. In other words, this Bill, which so often is adduced as an example of an English Bill, was nothing of the sort.
Much more important, however, is the difficulty of isolating any Bill from having an effect throughout the United Kingdom, partly owing to the way in which the Scottish block grant is determined. However, there are other reasons, and I can do no better than to quote the Kilbrandon royal commission on the constitution, because it put the point extremely well. It said that
“any issue at Westminster involving expenditure of public money is…of concern to all parts of the United Kingdom since it may directly affect the level of taxation and indirectly influence the level of a region’s own expenditure”.
That is not a party political point; it is the extremely astute and elegantly expressed comment of a royal commission, and we should all bear it in mind when we discuss these issues.
I come to the Barnett formula and funding, which I think all hon. Members have mentioned today, and which is always a lively issue. We have heard a lot about the inequities of the system, and I should like to correct some common misconceptions about the way in which it operates. Some high-profile devolved administration decisions and much of the associated media coverage have created the impression that there are—to use the hon. Member for Epping Forest’s phrase—unfair differences between public services in different parts of the UK, and that the devolved administrations receive funding for services additional to those available in England. That is not the case. They receive a block grant to spend on the public services for which they are responsible. The mathematical formula that underpins the Barnett formula has not changed since its inception, including through 18 years of Conservative Governments.
Devolved administrations have pursued some policies that are not replicated in England, but that is what they are there for. By increasing spending in certain areas, such as by giving free prescriptions and personal care, they inevitably have to make reductions in other key public services. That is the part that we do not hear about in all the public discussion on the spending policies of the devolved administrations. This year, universities in Scotland, which are an important part of the infrastructure, will have a real-term reduction in funding, whereas the total grant to the Higher Education Funding Council for England, which distributes public money to universities and colleges for teaching and research, will rise 2.5 per cent. a year between 2008 and 2011. Similarly, health spending in England will rise in real terms by 4 per cent. a year for the next three years, whereas in Scotland it will rise by only 1.5 per cent. We do not often hear about that sort of discrepancy, but it matters.
It is inevitable that devolved administrations will have different priorities and will make different choices, but that is not necessarily unfair—it is just different. The two are not synonymous. Another important issue is respite care for the parents and carers of disabled children. In England, it is funded by the Government through a £340 million programme, but in Scotland it is not guaranteed. That is another discrepancy, but it is not necessarily unfair to the people of England.
I was pleased to hear an hon. Member—not my hon. Friend the Member for Sittingbourne and Sheppey, but the hon. Member for Cambridge, I think—mention the importance of need when considering funding. The Barnett formula depends on assessment of need. My hon. Friend did some careful and nice per capita calculations, but with spending figures, the crucial consideration must always be need. That is what determines fairness—to pick up on the hon. Lady’s phrase again. Fairness is absolutely essential; the Government believe that above all else. If one considers fairness in spending, one has to consider need. There will be differences in how precisely one defines it, but it is fundamentally important and one must bear it in mind when one considers the figures. I hope that my hon. Friend will remember that.
What about London? The greatest amount of money seems to be spent there, but that could not be for reasons only of need.
I am not a London MP, and I hesitate to trespass on these extremely delicate issues. The hon. Gentleman will be aware that, if any London MPs were present, they would strongly contest what he says. It is inevitable, with definitions of need, that individual areas will tend to put their priorities highest. Local authorities are always complaining about how unfairly they are treated, whichever part of the country they are in, because their definition of their needs and the priorities given to them are always different. That is true across local authorities and regions, and between Scotland, Wales, Northern Ireland and England. It is inevitable that there will be such differences and arguments. There probably will never be a settled conclusion on precise definitions of need. That is democratic debate and we could discuss it for ever. Need should always be borne in mind, and I am very glad that it was brought into the debate. I hope that my hon. Friend will remember that when he discusses these figures in future.
We have had an interesting debate, which has shown that devolution will continue to be a matter for discussion, but we believe that it has secured the future of the Union. It is easy to forget what the situation was like in the 1990s when feelings were running extremely high in Scotland. I remind the hon. Member for Epping Forest that the people of Scotland felt that it was being used unfairly as a laboratory for the divisive social and economic policies of the Conservative Government of the time. The people of Scotland still have not forgotten that they were used to test the implementation of the poll tax. Such issues raised tensions to an extremely high level.
Whatever one thinks of the current Administration in Scotland, most people would accept that we have a vibrant devolution settlement. The recent mayoral elections in London, although they did not turn out as I wished, were nevertheless a good advertisement for our vibrant devolved democracy, and will continue to be so. Our measures on devolution have enhanced the constitutional arrangements of this country and have preserved the Union. They deliver essential flexibility and allow the devolved administrations and legislatures the ability to deliver distinctive policies, and it is right and proper that they should do so. The fact that there is also a single Government taking a UK-wide view has enabled us to have the stable macro-economic policy that has delivered growth year on year for the past 10 years and has kept us in good shape to face the turbulent global economic challenges that lie ahead.
Our constitutional arrangements have delivered a common social security system that assists those who are most in need across the UK, building the common sense of identity that is so important. We have been able to adopt a common approach, which, I hope hon. Members agree, is important for dealing with the challenges of terrorism and formulating common policies on defence and foreign affairs. It is our profound belief that the Union benefits all the people of the United Kingdom. It reflects our shared history and heritage, and supports the successful participation of all the peoples of these islands in a global economy. It promotes our international standing, and I hope that none of us will do anything to damage it. I know that my hon. Friend the Member for Sittingbourne and Sheppey; agrees with me on that, but I am afraid that his proposals would risk—inadvertently, I am sure—damaging the Union that is so precious to us all. I hope that he will reconsider his proposal, but I welcome his continued contribution to this debate.