Gerald Holtham explains why MPs from Wales should continue to vote on English matters at Westminster

September 24th, 2012

Should Welsh MPs at Westminster have a vote on bills whose subject matter is devolved? If the National Assembly legislates in the field of education, health or any other devolved area, evidently no English MP has any direct influence on the legislation. Westminster legislation in the same policy areas will primarily affect England – at least that is the intention – so why should Welsh MPs have a direct influence on it?

If it were indeed true that legislation in Westminster and Cardiff Bay did not interact in any way it would seem to me appropriate to segment the work of legislators accordingly. The Westminster Parliament would then have a dual function. It would be a Union Parliament for undevolved matters and an English Parliament for devolved matters. In a sense there would be an English Parliament within the Union Parliament. MPs for English seats would have a double role as legislators in both, while other MPs would be full members of one legislature only, albeit the superior one because that is the one that controls the extent of devolution. Such an arrangement of overlapping legislatures sharing premises and procedures is no doubt unusual but it does not seem to be unworkable.

Some people regard the arrangement as problematic because a party might have a majority in the English Parliament but not in the Union or vice versa. However, if that happened it would merely reflect a democratic reality. Since Parliament would remain the Union Parliament, the government would be formed by the party or parties with control over non-devolved matters.

In devolved matters affecting England the government would have to adapt its programme accordingly. It would have to form alliances to pass specific legislation. It is possible that bargaining could spill across the England-Union frontier in that, for example, a non-governmental party with votes in England could make stipulations on foreign policy the price for a domestic collaboration but that is the sort of untidiness with which politics is supposed to deal. A more substantial objection is that the majority party in England could be in the minority in the Union as a whole but could still propose and pass legislation in the English Parliament or Grand Committee (however it is styled) that the Union government opposed. De facto, two governments could emerge, broadly one foreign and one domestic.

Such a situation would change the nature of Westminster and indeed of British politics. It would make Parliament a good deal more interesting and require the public to pay a little more attention to understand which parties were responsible for which measures. It would no doubt lead to pressure to formally separate the two Parliaments but that takes us into realms of conjecture. It is in any case not at all inevitable. Generally the same party or coalition has enjoyed a majority in England and the Union as a whole. The opposite situation may remain sufficiently unusual to be treated ad hoc as an anomaly not requiring further constitutional change.

However, all that is to run ahead of the current reality. For the current situation does not conform to the first premise underlying the argument for a dual legislature. That is to say, there are few pieces of ‘English’ legislation that do not have a material effect on the situation in Wales.

A simple example will make the point. If the government decides to increase tuition fees for university students the Welsh government can opt to follow or not since the matter is devolved. However, the UK government may increase student fees as an alternative to increasing direct support from the exchequer to universities. The reduced expenditure on higher education relative to what would have been required without the fee increase would have as a direct consequence a smaller block grant to Wales. The Welsh Government would be compelled to redirect resources from other expenditures if it did not wish to follow the fee increases in England. There is nothing inappropriate about that situation but it can hardly be argued that Wales has no interest in the decision. It is evidently a matter on which Welsh MPs should be able to vote.

This example is not an unusual one and others flow from the way in which devolved finance operates. Wales receives a block grant, which is calculated via the so-called Barnett formula on the basis of expenditures in England on matters that are devolved to Wales. Each line item of a UK government department’s expenditure is assessed for how far it is devolved and a devolution proportion or factor is assigned, ranging from 0 (no devolution) to 1 (full devolution). Those factors are known as Barnett ‘consequentials’. The consequentials are aggregated for each department to give an average figure, weighted by the volume of expenditure corresponding to each line item. The Barnett formula works on annual changes. So the Welsh block grant is what it was in the previous year plus an annual increment (or decrement), determined by the formula.

The Barnett consequential for each department is multiplied by the change in that department’s expenditure. Wales receives its population share of the change in each department’s expenditure multiplied by its average consequential, which is added to the previous block grant. The change could, of course, be positive or negative.

Now macro budgetary decisions – how much to change the budget of each government department – are generally made in the annual Expenditure Review, and Welsh MPs have a vote. But more detailed legislation may have the effect of changing the expenditure of a department. Moreover, even if overall expenditure is not changed, legislation could have the effect of moving expenditure within a department, which may well change that department’s average consequential and therefore alter the Welsh block grant.

In general Welsh finances are affected when expenditure is moved among items that have different consequentials. If expenditure is reallocated between items which are both fully devolved there is no effect. Similarly reallocation among non-devolved items has no effect on the block grant, but movement across the devolution frontier, as it were, has an effect and such movement can occur across or within departments.

That is a much more likely occurrence for Wales than it is for Scotland because the pattern of Scottish devolution is simpler and cleaner.   A number of areas are reserved to the Union Parliament and everything else is within the competence of the Scottish Parliament. Welsh devolution is less extensive and considerably more involved.

The Government of Wales Act of 2006 sets out 20 fields in which the National Assembly for Wales has legislative competence. These fields can be augmented with specific matters conferred by acts of Parliament. Those areas of competence are, however, subject to a number of exceptions. Twelve areas of exemption are mentioned in the Act, with a number of sub-areas. There are also general restrictions concerning functions of Ministers of the Crown, creation of serious criminal offences or altering certain specified Acts of Parliament.

The effect of this approach is not only to make it frequently unclear whether the Welsh government has competence or not (thereby providing employment for lawyers) but also to give Welsh devolution a very ragged edge. In those circumstances the possibility that ‘English’ legislation will have substantial consequences for the Welsh budget and policy is ever-present. Moreover it also means that those implications may not be immediately apparent.

Therefore ‘English’ legislation may well have the consequence of altering the resources available to the Welsh Government. The reverse is not the case. The way that the Welsh government chooses to spend its revenue does not affect the resources available for public expenditure in England. To that extent, a West Lothian question hardly exists for Wales at the present time and there is no justification for restricting the voting powers of MPs for Welsh seats. To be sure, Bills could come before Parliament where there is no conceivable Welsh consequence and it would be right in my view for Welsh MPs to observe a convention not to vote in such cases. But such Bills may well be unusual and no block preclusion would be safe.

Bills dealing with health service reorganisation, for example, are sure to have repercussions in Wales even though the health service there is a devolved matter. The point can be made by an extreme example. If the UK government decided to replace the NHS with an insurance arrangement, the Welsh Government would be under no constitutional obligation to follow suit. But it would have to run its own NHS without the Barnett consequential of public spending on the health service in England – a clear impossibility.

The matter can be summarised as follows: the resources available to the Welsh government for expenditure on public services in Wales depend on the policies and resource allocation of the UK government with respect to England. Any legislation which affects that resource allocation or has the capacity to affect it is of legitimate interest to the constituents of MPs for Welsh seats. That situation would change fundamentally only if the Welsh block grant or Welsh government finances in general were not to depend on policies and expenditures in England.

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Gerry Holtham is an IWA trustee and chaired the Commission on Funding and Finance for Wales. This is the evidence he submitted to the Mackay Commission on the consequences of devolution for the House of Commons

11 Responses to:“A Welsh answer to the West Lothian question”

  1. Howell Morgan says:

    Far be it from me (a humble pleb) to comment on the above as it was written by the very eminent Mr. Holtham of Welsh establishment fame. Clearly we in Wales are entitled to our own opinions on the constitutional mess we now find ourselves in, however ALL the real decisions will be made by the English,and unfortunately they see the world through very different eyes, which will in the long run be not in our benefit. We and the Scots are already over represented at Westminster and among the English people I speak to there is from a)simmering to b)apoplectic view of us Celts voting on how then English run matters when we decided to become a semi-autonomous region of UK. Perhaps it will all be resolved after the vote in Scotland,when the full extent of English subsidies/constitutional mess is fully explained to English voters/taxpayers. A very clever Conservative politician could make hay with this issue in seeking to make much sharper differences in current constitution and funding of remote and pretty poor areas. The whole issue of a)devolution,b)professional rugby in wales is in crisis in my humble opinion due to appalling condition of our economy/performances of public sector(which we don’t actually pay for in total)and the severe cuts in public expenditure coming down the line, even if there is an improvement in UK economy.

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  2. gerald holtham says:

    There is no doubt that the fragile nature of the Welsh economy poses particular problems at a time of retrenchment in government net spending.
    I don’t know that the English need to simmer about this question. There are about 500 English MPs and 40 Welsh ones. The Welsh can’t make any difference unless they are almost united and the English split almost 50-50. On many issues, like health, the real division of opinion is likely to be between the Conservative south-east of England and the Labourite rest of the country. The Northerners and the Welsh would frequently vote the same way. Perhaps Howell Morgan has been talking to English people from the Home Counties.
    By the way, it’s nice to know I am now ‘eminent’ but as the son of two factory workers and the grandson of two colliers my own pleb credentials are impeccable.

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  3. Howell Morgan says:

    There are likely to be close election results in future, so with a small balance for, say, a Conservative government to radically change public services in England, the over representation of both Welsh/Scottish MP’s could become a major issue. We decided, on a very small vote to have our own body, so that the dreaded English, particularly Conservative MP’s couldn’t have a say on how we run/or otherwise our public services, and surely the same principle should apply over the border. It is perfectly correct that there is a split in voting patterns in England and the parties have to put their cases to their electorate who will decide at the ballot box. When we vote at General Elections those issues, say on health/education are not mentioned by Welsh political parties as seemingly they are not our business and we dont need to get involved, so why do our MP’s? I have spoken to English people from all over the place and quite honestly they are a bit mystified by the whole current settlement, but feel in their bones that something isn’t quite fair and they are correct. I too come from pure working class backgrounds, and still in that category as never found anybody to give me anything without working, but not in the ‘eminent’ class.

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  4. Gerald Holtham says:

    Welsh Government decisions on health, education etc don’t affect England in any way so English MPs don’t need to vote on them. English decisions on health, education etc do affect what happens in Wales – via the funding. So Welsh MPs do need to vote. The situation is not symmetrical. So what is unfair?

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  5. Howell Morgan says:

    The spending of money on Health/Education for England is under the control of MP’s at Westminster, however in Wales we have a seperate body set up by Parliament with its own elected AM’s to control Health/Education. As you said our decisions on Health/Education are for us alone, so surely the English people should only have their MPs voting on their decisions for the same services. If you look at the two main public services and changes currently being made in managment in England, then I am sure that all MPs in England are receiving views/opinions from people supporting/objecting to proposals, however Welsh MPs would not be subject to those pressures, but would be for the changes/cutbacks currently proposed in Wales. I clearly agree that all MP’s should vote on level of taxation/foreign affairs/defence/allocation of funding for such services and devolved administrations as clearly they are all part of the GE processes of open discusion between parties/media etc. I can only confirm that English people I speak to think it is unfair that their local services, and management thereof can be influenced by Welsh MPs, but their MPs have no involvement in our services/managment.

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  6. Gerald Holtham says:

    But Mr Morgan the point you are not taking is “the changes/cutbacks currently proposed in Wales” depend on and are a consequence of “changes currently being made in management in England”. Welsh AMs have no control over the size of the block grant. But those “English” decisions do change the block grant. That is why Welsh MPs should vote. Until you change the funding arrangements there is no fair alternative. Most English people don’t understand that because they don’t understand the Barnett formula. When it’s explained, they get it.

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  7. Jon Jones says:

    Yes, I think that I am getting your point Mr Holtham. But some of our MPs DON’T actually vote on devolved issues and the funding decisions associated with them. Do you think that this is because THEY don’t understand the implictions of spending allocations in England on finances for Wales?

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  8. gerald holtham says:

    I can’t answer that, Mr Jones. I don’t know. You would have to ask the non-voters.

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  9. Jon Jones says:

    Well I can’t answer that question either in any authoritative way but I can have a stab at speculation… our Nationalist MPs are less interested in the continuing well-being of the country and more interested in emphasising our difference and independence… even though, on a political level, that independence is illusory.

    On an economic level we in Wales had better start thinking of England as our nearest and best customer… to be treated with respect rather than rubbished on a daily basis. It sounds great sending economic envoys from Wales to the far corners of the earth but, you know, there are 50 odd million customers a short lorry drive away.

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  10. Alec says:

    Mr Holtham,

    Wales has a Parliament; however, it does not raise its own money through taxation. Rather, the only money that the Welsh Parliament has to spend is the money it is given by Westminster (read England). This is a fundamental problem of accountability and the fact of a limited and almost puerile form of democracy akin to a weekly allowance from father.

    Your main argument is that the Barnett consequences for Wales of specific English policies entail that Wales has a right to have a say in ‘English only matters’. The obvious solution, to both problems described, is to end the Formula and for Wales only to spend the money it can raise itself. And not a penny more. To oppose self-funding for Wales would be to admit that Wales is subsidised by England: if Wales can earn as much or more by itself, surely it should do so? Whilst the Welsh may be content with subsidised status, the English are not content with subsidiser status. The English are well aware of all the myriad of benefits enjoyed by the other home nations, which England pays for and are denied to the English.

    The English Question is a topic about which the British establishment (and indeed the devolved bodies) should rightly be concerned. England is by far the most populous country of the UK. There are far more votes to be had in England than in Scotland, Wales and NI combined. Soon, savvy politicians, most likely the Tories, will wake up to this fact.

    The democratic will of our people should be respected. There is little point in the UK for the people of England. We have always paid for the rest of the UK; however, until devolution, we had the power and prestige of running your countries from Westminster. Now, we have little power over you; but we still have the bill. A very large bill. The dog has finally barked.

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  11. Howell Morgan says:

    Alec. As a welsh man of 68 years who is an English only speaker and supporter of our place in the UK may I thank you for your contribution as above. Anybody who puts his head above the parapet in wales and criticises the devolution settlement,and welsh language enforcement is ‘shouted down’ by the nationalist minority who are vociferous in pushing their agenda,and our craven politicians are in thrall to them. In my lifetime welsh people have voted at UK elections, and governments of both centrel left/right have been produced. This has meant policy movements and up til 1999 we had the benefit, or otherwise, of such changes. H owever with WAG we have a permanent Nationalist/Old Labour majority which enforces its will as though we live in 1945. Thankfully both of my children now work/live in England,and my grandsons also so their lives will not be run by the rump now in charge here,however for us left we in the English only speaking vast majority are being dragooned into welsh language usage, and a state sponsored job creation scheme for a minority. Quite frankly the only hope for us resides in Westminster as the English MP’s must start to draw the line and cut back welsh block grants as the money is being diverted for nationalist schemes,and the English get no thanks whatsoever. Pull the plug asap,and let this whole mess be sorted out once and for all, i.e we are either in the UK (warts and all),or out of it and left to fund our lifestyle we want from our own efforts.

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