To Fed? Or not to Fed?

As the UK moves from a unitary state to a devolved structure, Dr Owain ap Gareth explores what Federalism can do for a future UK.

Devolution has dramatically changed the rules of the game for the UK constitution. With the crisis of a Scottish independence referendum, and a somewhat untidy structure of 3 different devolution settlements in the UK, federalism has been suggested as a way to solve our ills. But is this realistic and what can Federal systems teach us for the future of Wales and the UK?

What is the future of the UK – A federal arrangement?

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First things first. What is ‘Federalism’? A simple definition would be:

“A system of government where power is constitutionally divided between different levels of Government.”

However, this simple definition masks several – with apologies for the cultural reference – shades of grey. It is useful then to see what this means in practice.

The first key point is that in order to have a clear settlement across the different parts, Federalism requires a written constitution. This would outline where powers reside – with clarity about what powers are in the hands of the region, what powers lie at the federal centre, and what powers are shared.

As constitutional law is based around a legal written constitution. Federal states tend to require a strong role for courts and the judiciary – hence the classic separation of the powers of the Judiciary.

Within this core framework, federal countries work quite differently to each other.

Some countries are Federations in writing, but the centre has in practice become dominant in just about every policy area. Austria is a good example.

There are federations where regions are in competition with each other and the federal level has an intentionally curtailed level of power. In these federation there is little transfer of money from the centre tax pot to the regions. The United States is a good example of this ‘competitive federation’.

There are also federations where there is an attempt to create cooperation between the different levels, with powers set out between federal and regional level, but also shared powers. There will be varying transfer of funds from the centre tax pot to the regions, with some Federations having the principle of equal living conditions written into the constitution, such as Canada and Germany (and Rhodri Morgan has advocated this in the UK for example).

Given the discussions on devolution in the UK have been around principles of redistribution on the one hand, against ‘paying your own way’ on the other hand, the latter ‘cooperative Federalism’ appears to be a useful model to look at.

In terms of powers, we can take Germany as a typical example here:

Federal powers: Defence, foreign affairs, immigration, transport, communications, currency

Shared powers: Welfare, land management, consumer protection, public health and statistics.

Region’s (Lander) powers: Everything else. Culture is 100% the Lander for instance.

Some have argued that the UK is moving toward being federal – or ‘quasi-federal’ – already. To what extent is this true?

Our new institutions such as the Supreme Court and its increasing say on constitutional matters – as in several recent cases on the powers of the National Assembly – indicate that the UK constitution is increasingly framed around judicial decisions on where powers lie, as in Federal systems. In this context the Government of Wales Act serves a similar role as a ‘devolved settlement’ not dissimilar to a written constitution (although not a very populist one!).

However this remains based on powers in devolved areas – it only asks the question: ‘what is the National Assembly for Wales for?’ It is silent on the wider question of “what is Westminster for?” In order to move to a Federal structure, one would require a structural change in the centre from its Parliamentary sovereignty. It is notable that ‘Shared powers’ have been little discussed in the UK for example, but in order for it to work one would need a structure that could accommodate different levels having a clearer and more equal status.

So what are the likely barriers to a Federal UK? This can be summed up in one word: England. No other federation has such a dominant unit in a federation, with 84% of the population. This makes the possibility of a tidy ‘symmetrical’ federal structure difficult. ‘Tidiness’ and parity across the nations would also dictate that Scotland will be held back by the partner least enthusiastic about more powers, which is unlikely.

A suggested way to deal with the English problem is to make the House of Lords a Senate as in the USA, with the devolved Nations having representation weighted in their favour, in order to balance the power of England in the House of Commons. Another way suggested to mitigate the dominance of England is to devolve power to the English regions.

Given these problems, we should keep in mind that there are models of strongly decentralised states, and analysts of ‘fiscal federalism’ (who look at how funds are distributed across a nation-state’s system) are often quite happy to include countries that are not ‘classical Federations’, such as Spain in their analysis. We may not see a federal UK, but a quasi-Federal UK could include constitutionally guaranteed devolved powers, as in Spain.

The devil, as always will be in the details, but we should also be careful in our expectations of what a federal system would be expected to solve. In Federal systems – including those ‘Cooperative Federations’ such as Canada and Germany – discussions around how funds should be distributed across the federation dominate the political landscape and policy agenda much as they do in the UK. However, Federalism can point to structures on how powers can be clarified, how conflict may be dealt with, and how constitutional protections can be put in place. Movements in this direction would make matters clearer for Welsh and UK citizens.

Dr Owain ap Gareth is Campaigns and Research Officer at Electoral Reform Society Cymru.

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