Moderator: Cross posted from Normal Mouth's blog.
Normal Mouth (Rhondda, blogger): The recent Varney Review on Tax Policy in Northern Ireland has been greeted in Wales like flatulence in a lift: the emission of something unwelcome prompting the nationalist leaning commentariat to pretend it hasn't happened. Plaid Cymru MP Adam Price, however, is not one to suffer in silence.
The main question the Review set out to answer - would dropping the rate of Corporation Tax in Northern Ireland to match that of the Republic's boost the Province's fortunes? - is one that should be of interest in Wales. It is, after all, one of the Nationalists' few snazzy ideas for revivifying the Welsh economy.
Adam Price may be right that Varney did his master's bidding in answering this question in the negative. The Treasury in particular remains vigilant against what the civil servants term "repercussiveness" - the notion that decisions made in the devolved administrations will set precedents elsewhere. Nationalists, alternatively, continue to be attracted to areas where they think they can jemmy apart the fissures in the unitary state. With an alternative tax regime, the differences between England and Wales would be greater still.
It is no great shock that Nationalists look at taxation through the prism of their national project, nor that Whitehall thinks in terms of the integrity of the British state. But there is a further more pressing political dimension within the Review's conclusion. At a time when the Celtic fringe is depicted as living off England's collective largesse, a tax break for any devolved administration could be incendiary. Why, it would be asked, should Northern Ireland or Wales get such a boost while similarly poor parts of England cannot? Why should England fund tax cuts for the Celts?
So, almost inevitably, we return to the question of England's internal governance and her relationship with the other parts of the UK. And, once again, we find that the massive imbalance between England and the rest of the UK at the root of this angst.
For so long as England remains administratively fused with the UK, it will be impossible for the UK government to countenance tax breaks only for the devolved administrations. Without a mechanism for doing the same to those areas whose need for such a cut (provided the case is proven, and Varney provides ample evidence that it is not) is comparable it is far easier to simply say no to the fringe.
For so long as England remains as a single tier jurisdiction (save for a feeble local government layer), it will remain impossible to consider properly her needs and those of Scotland, Wales and Northern Ireland. The motor regions of London and the South East (and to a lesser extent the East and South West) obscure the needs of areas such as Yorkshire and the Humber or the North West. Apportioning resources to 85% of the jurisdiction in one go, with three separate tranches for the remaining 15%, will almost by definition lead to anomalous outcomes. There simply is no fair way to weigh the needs of the entirety of England, without subdivision, against that of Wales. It is like apportioning one fund to all the US Eastern seaboard States, and then another exclusively to Iowa.
All of which prompts the question again about why the government is making only the most half-hearted effort to revive English regional devolution, especially as it was timidity that killed the policy last time. Devolution cannot work while only three (comparatively small) territories are granted law-making powers while the remainder - despite having regions as different from one another as the devolved territories are from England's motor regions - is treated as a single mega-unit. Devolution will only work when it is made more symmetrical, with every part of the UK granted the same or similar degrees of law-making and tax varying powers. This cannot be on an all-England basis: that would, if anything, make the imbalance worse.
English regional devolution will not just be good for England, it will be good for Wales, Scotland and Northern Ireland too. With the lop-sidedness gone, and the festering suspicion of special treatment forever blown away, the next Varney report could escape the accusation that it looked at sub-state tax policy on its politics, rather than its merits.
