Respect and Co-operation: Building a Stronger Union for the 21st century

SUMMARY

This Committee believes in the United Kingdom. We cherish the principle of mutuality upon which it rests. We recognise its current strains but have faith in its future as a supple, adaptable, shared asset for all our nations, regions and communities.

This report is written in that spirit of optimism. It concentrates not on some grand, new constitutional settlement but upon a range of practicable, achievable improvements to the functioning of the Union and to its inter-relationships, both procedural and human, which could enhance its vitality and enrich its service to our people in the demanding decade to come.

The world is changing at an unparalleled rate. For the last twenty years and more, our governments have faced a financial crash, climate change, an information and technology revolution, withdrawal from the EU, a pandemic, and new emerging threats from regimes hostile to liberal democracy. Any one of these issues would test our system of government. The UK’s governing institutions have had to deal with the cumulative effects of them all.

Constitutions matter but they need constant attention and occasional repair if their vitality and adaptability are to be sustained. Opponents of the United Kingdom argue its demise is inevitable. It is not, but there is no room for complacency; each of its nations and regions would be diminished if the Union ceased to exist. The opportunity to revitalise the Union, making it fit for purpose in the 21st century, is clear and achievable.

State of the Union

The United Kingdom’s unique constitutional arrangements reflect its character as a multi-national and diverse state which accommodates a range of identities and are particularly well suited in responding to the new challenges of the digital age. They provide for the significant autonomy of its constituent nations complemented by the pooling of resources and sharing of risks, to ensure greater resilience in its collective response to global security, the pace of industrial change, economic, financial and public health challenges, present and future.

Global pandemics do not respect national boundaries and cross-border co-operation is therefore critical. We believe the United Kingdom’s collective response to the COVID-19 pandemic through the furlough scheme, financial support to businesses and the procurement of vaccines demonstrates the continued strength of the Union.

Improving the shared governance of the United Kingdom will require a greater degree of respect and partnership between the different layers of government.

For the Union to flourish, it must enjoy popular support in each nation, based on a recognition of the common benefits accruing to all nations and regions.

We have expressed concern in the past about governments’ tendency to ‘devolve and forget’. There has also been evidence at times of a unilateral approach to strengthening the Union, which has been insufficiently sensitive to its pluralism. We do not believe either approach is an effective means of strengthening it. While we welcome the Government’s stated commitment to the Union, we believe it needs to set out a clearer vision about how it will be shaped in the 21st century. This vision needs to be rooted in the best appreciation we can reach about the fundamental challenges which have been building up over decades and which have led to today’s discernible atmosphere of distrust and uncertainty in popular discussion and debate.

Parliamentary sovereignty

Parliamentary sovereignty remains a fundamental doctrine of our constitution. While the UK Parliament could, in theory, legislate to abolish the devolved institutions; in reality, it would not do so, and certainly not without the express consent of relevant voters in a referendum, as recognised in the devolution statutes. This illustrates the political constraints which in practice circumscribe the legislative supremacy of the UK Parliament. As with other political constraints, there may, from time to time, be tensions in their operation. Parliament’s legislative authority must continue to be exercised with respect and restraint if the Union is to be strengthened.

Sewel convention

The Sewel convention is a fundamental part of the United Kingdom’s devolution arrangements, which provides that the UK Parliament does not normally legislate on devolved matters without the consent of the devolved legislatures. If trust is to be maintained between the UK Government and the devolved administrations, it is essential that it be respected by all governments and legislatures. While the legislative consent procedure generally worked well from 1999, implementing Brexit placed it under strain.

For the Sewel convention to operate well, constructive relationships and good faith is required between the UK Government and the devolved administrations. Other than in exceptional circumstances, the UK Government ought not to seek to legislate in devolved areas without consent.

We do not believe it would be desirable to involve the courts in adjudicating disputes on the meaning and application of the convention, which are best resolved through political deliberation. As any breach of the convention will have political consequences, we believe that Parliament is the appropriate forum to scrutinise its operation.

We believe the absence of any meaningful dialogue between Parliament and the devolved legislatures on legislative consent matters is a gap in the legislative process. We recommend that to increase confidence in the Sewel convention, as well as strengthening interparliamentary scrutiny of intergovernmental relations more generally, the House of Lords should strengthen its scrutiny of bills that engage the Sewel convention. This should include the provision of a memorandum by the Government about the devolution implications of relevant bills, a greater degree of committee scrutiny of legislative consent issues–seeking input from the devolved legislatures, where appropriate–and greater prominence for the granting, or withholding, of legislative consent by the devolved legislatures in House of Lords Business.

Intergovernmental relations

It is unfortunate that greater progress on reforming the intergovernmental structures was not achieved before the challenges of Brexit and COVID-19 demonstrated the inherent weaknesses in the current arrangements. The governance of the United Kingdom requires strong relationships to be built and maintained between the UK Government, the Scottish and Welsh Governments and the Northern Ireland Executive at all levels.

We welcome the agreement reached between the UK Government and devolved administrations on a process for agreeing exclusions from the UK Internal Market Act 2020’s market access principles in policy areas covered by common frameworks. This is an encouraging sign that constructive intergovernmental relations are being re-established. We also welcome the review of intergovernmental relations, which appears to have addressed many of the defects in the previous structure. We believe Prime Ministers have a critical role to play in making the new intergovernmental structures a success and maintaining strong relationships between the four administrations, including chairing regular meetings of the new Prime Minister and Heads of Devolved Governments Council.

We recognise that, whatever changes to the intergovernmental structures are agreed, even the best governance structures will not be capable of resolving fundamental political differences between the different administrations. The arrangements should however be capable of fostering greater trust and more effective, cooperative, working relationships. The success of the new arrangements will depend on how the Government and devolved administrations operate them and whether they are committed to using the new structures to cooperate on achieving shared objectives, rather than simply managing—or taking opportunities to accentuate—their differences.

Better co-operation and partnership between the UK Government and devolved administrations is in the public interest, and the public supports greater joint working. There are a range of challenges that, reserved or devolved, will affect all parts of the United Kingdom equally, including international trade, health and social care, as well as shared competences like social security and crossborder transport links.

Effective scrutiny of intergovernmental relations needs to be underpinned by greater transparency including the provision of information about the Government’s engagement with the devolved administrations. While we welcome the Government’s provision of some information, we believe greater detail is required. To this end we recommend the Government enters into a formal agreement with the House of Lords on the information it will provide about its intergovernmental engagements, to enhance the current scrutiny arrangements. The Government should also make time available in the House to hold a debate on its annual report on intergovernmental relations.

Interparliamentary relations

Enhanced interparliamentary relations have an important role to play in allowing all legislatures in the United Kingdom to scrutinise the new intergovernmental arrangements, increasing transparency and holding their respective executives to account, as well as helping to foster greater mutual respect between them. There is a strong appetite among the devolved legislatures for greater interparliamentary engagement with the UK Parliament. We believe that the House of Lords can play an important role in facilitating this.

We welcome the plans to establish a new interparliamentary forum and look forward to participating in it. To be a success the interparliamentary forum should be based on an equal partnership between the legislatures and relatively informal arrangements—providing a framework for more detailed interparliamentary collaboration where there is an appetite to do so.

The governance of England

England’s place in the Union should not be overlooked, but there are no obvious governance changes to provide England with a distinctive voice that command political and public support. Establishing an English parliament would destabilise the Union and do little to address the need for greater decentralisation within England, which we believe has the greatest potential to resolve concerns about the governance of England.

England is highly centralised, with greater regional economic inequalities, compared to most other Western European countries. We strongly support the development of devolution within England to help improve economic performance and address regional inequalities. Greater decentralisation will help to strengthen the governance of England more generally and achieve a better overall balance of powers between the centre and the other parts of the United Kingdom. This will benefit the overall health of the Union.

Considering its importance, we regret the long delay in the publication of the Government’s Levelling Up white paper. We believe that the success of the Levelling Up agenda will require a long-term commitment, developing cross-party support and strong cross-departmental collaboration, to deliver effective and properly resourced devolution within England.

The current deals-based approach to devolution is not sufficiently ambitious. We recommend the Government develops a principled devolution framework to provide a clear baseline for further devolution of powers within England. However, building greater capacity and capability in devolved authorities will be critical to the successful extension of devolution within England to the counties, as will achieving greater coherence in sub-national governance arrangements. As devolution within England develops, it will be important that English devolved authorities have an opportunity to influence discussions at the national level, perhaps through the existing intergovernmental arrangements.

Whitehall

To deal effectively with and respond to the challenges of governing the United Kingdom in the 21st century, significant culture change is required in Whitehall, including the end of its top-down mindset. Following the completion of the review of intergovernmental relations and if, or when, devolution is extended across England, Whitehall will need to transform how it manages, and mediates between, the different interests of the nations and regions. Greater respect and co-operation between Whitehall and the different parts of the United Kingdom will help strengthen the Union.

We note the Government’s responsibility for the Union, intergovernmental relations and English devolution has been brought together under the role of Secretary of State for Levelling Up, Housing and Communities, who is also the designated Minister for Intergovernmental Relations. While the combined responsibility for the devolution arrangements is welcome, we are concerned that the role’s broader responsibilities risk undermining its focus on this important area. We also hope the combined ministerial responsibility for the devolution arrangements becomes a settled part of the machinery of government, as we believe continued and frequent restructuring will risk undermining Whitehall’s capacity to manage a fundamental part of the United Kingdom’s governance arrangements.

We endorse the Dunlop review’s recommendation that a senior Cabinet position—at present the Secretary of State for Levelling Up, Housing and Communities—should have a duty to uphold the integrity of the constitution, including the operation of intergovernmental relations and the devolution arrangements more generally.

We welcome the establishment of dedicated Cabinet committees on the Union and the Government’s commitment to increasing civil servants’ knowledge of the devolution arrangements through training programmes and secondments. We will judge these initiatives by their success in inspiring the change in mindset which we believe is required across Whitehall.

Funding arrangements

We continue to believe the Barnett Formula requires reform to introduce a fairer allocation of funding between the four nations. As fiscal devolution develops and the funding of the devolved administrations become less reliant on the block grants, we recommend the Government examine how funding arrangements could more effectively address relative needs across the United Kingdom.

The multiplicity of funding pots from which local government is invited to bid occupies a disproportionate amount of its capacity. These pots must be rationalised to allow their resources to be re-focussed on exercising devolved powers. Meaningful and thriving devolution within England will not be achieved if devolved authorities are not granted the financial means to exercise their powers effectively. We recommend the Government introduces greater fiscal devolution to devolved authorities, including taxation, while taking account of institutional capability. Central government’s continued role in redistributing resources should not be used as a vehicle to impose its own policy preferences on English devolved authorities.

We welcome the creation of the Shared Prosperity Fund but heard significant concerns about the UK Government’s role in making allocations from the Fund directly in devolved areas, without the involvement of the devolved administrations or devolved authorities. The Government’s lack of engagement with the devolved administrations on the overall design of the Fund is unhelpful and has undermined trust. To rebuild trust and partnership, we recommend the devolved administrations and devolved authorities should have a more constructive role in the governance of the Fund, including decisions about local priorities and the allocation of funding.

The Union’s purpose and potential in the 21st century

We believe that the Union’s strength historically has been its ability to adapt to changing circumstances both national and international. The Union should continue to adapt, but with a renewed focus on strengthening effective relations among its constituent parts. We believe that the flexibility of our uncodified constitution is well-suited to achieving this.

The Committee’s vision is of a more cooperative Union based on a renewed sense of respect and partnership between the different layers of government and a new emphasis on shared governance in the interests of all its citizens. After the challenges of Brexit and COVID-19 we believe there is a clear opportunity to reset relationships to achieve a better functioning Union which can keep pace with the rapid changes and the many challenges that confront its nations and regions in the 21st century. A Union which can achieve greater wellbeing and deliver greater resilience across the whole United Kingdom

10th report of session 2021-2 House of Lords Paper 142