The United Kingdom has set up federal systems across the world but has been reluctant to embrace the principle itself, whether in relation to its constituent nations or to Europe. In the latter context, indeed, it has remained the ‘f-word’. Now almost everyone is talking about federalism as a new way of approaching the Scottish issue, a third way between devolution and independence, and as a device for fitting the United Kingdom together as a whole. As usual, when so many people agree on an idea, however, they do not agree on its meaning.
Federalism has both a specific, narrow meaning and a broader one. In the specific sense it refers to a set on institutions providing for the division of power between two orders of government, each of which has guaranteed status and competences. There are mechanisms for linking them and introducing a territorial element at the centre, via a second chamber representing the federal units, or intergovernmental councils or conferences. There is usually some principle for sharing resources, known technically as fiscal equalization.
In this sense, federalism would not work in the United Kingdom, although it did have its advocates a hundred years ago, in the form of ‘home rule all round’. England is far too big and there is no system in the world in which one federal unit has 85 per cent of the population. An English government could hardly live together with the UK government, since the former would have vastly more power and resources, which is not usual in federal systems. Nor is there any serious demand in England for federalism. An alternative sometimes canvassed is to divide England into regions but no versions of this proposal envisage them having the same powers as the Scottish Parliament or indeed any legislative powers at all. The last effort to regionalize England in 2004 was massively rejected in a referendum in the first place it was proposed, the North East. There is talk currently of city-regions, not a new idea but a revival in attenuated form of the metropolitan counties that existed between 1974 and 1986 but this has nothing to do this federalism. These are administrative units mainly concerned with infrastructure investment and talk in the media and among regional politicians of Scottish-style devolution is wide of the mark.
Federalism in the broader sense refers to a way of thinking rather than institutions. It is about the principle of dividing power and ending the monopoly of the centre. This implies both territorial decentralization and reform of central government to enhance the role of the territories. It also encompasses the idea of allocating resources according to some agreed principles. In the UK, we do not yet have this federal spirit. Whitehall and Westminster have hardly changed at all as a result of devolution. The Treasury remains immensely powerful and insensitive to territorial differences. The Labour and Conservative parties are not federal in their own structures and ways of working.
A UK operating in the federal spirit would not provide a solution to the West Lothian Question or complaints about the Barnett Formula, but would help in thinking these matters through. UK federalism would necessarily be asymmetrical, as devolution is, allowing different parts of the union to develop their own institutions according to local needs. If England does not want its own parliament but is concerned about Scottish MPs voting on purely English matters, some version of English votes for English laws (now known as EVEL) could be devised. If people in England want decentralization within England, this can be addressed even though it does not give them the same as Scotland. There will never be agreement on how to divide up resources but something more principled than the Barnett Formula could be devised. Above all, the federal spirit would curtain the power of the centre and rein in the grasp of the Treasury.
Such a spirit could spread to the European level, if UK politicians could accept that the European Union is, in the broad sense, based on federal principles. Scotland, Wales and Northern Ireland, in turn, could develop their own links into Europe, as they are already doing. They would also have a say in developing UK policy in Europe and the UK’s stance in regard to Europe as a whole. There is even less sign of this thinking in Whitehall and Westminster, where all the parties seem determined to assert old-fashioned parliamentary supremacy. It is, moreover, those elements in UK politics who are most hostile to federalism within the UK who are most resistant to Europe.