1. Money

    Henry Hill

    Will the National Insurance hike weaken the Union?

    Will the National Insurance hike weaken the Union?
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    Given the enormous power that Conservative leaders wield within the party, it is not surprising that the party should come to take on the character of its leaders.

    In the case of Boris Johnson, it is his protean quality that seems to have rubbed off. Where a previous leader might have had a policy agenda or ideology, today’s Tories have cheery slogans which can mean almost anything.

    Thus in the course of half a dozen recent Tory conference events one will have heard at least that many different definitions of ‘levelling up’, while the big corporate lobbies and third sector groups insist that whatever they normally talk about is absolutely essential to whatever ‘levelling up’ is.

    I have a sneaking suspicion that ‘defending the Union’ may be going the same way. The Conservatives know that it's important, but don’t have any intellectually coherent idea of what it entails. As a result, it can mean almost anything.

    Rishi Sunak provided perhaps the prime example of this. Speaking at an Institute of Economic Affairs’ event, he defended his decision to hike National Insurance to pay for social care on the grounds that UK-wide taxes are important for “those of us who believe in the Union”.

    On one level, this is certainly true. One of the key things which devolutionary unionists have neglected over the past two decades has been maintaining a meaningful role for British politics and the British State in the governance of this country. As the man in charge of one of the few Westminster departments with real nationwide clout, the Chancellor has a vital role to play in the effort to rebuild it.

    But on the specific question of the NI increase, he is mistaken. Because in fact, with this policy Sunak has broken new and perhaps dangerous ground: he has raised a British tax with the explicit intention of funding an English policy.

    Yes, a proportionate share of the money will flow back to the Scottish, Welsh, and Northern Irish via Barnett Formula consequentials. He isn’t actually drawing extra public funds into England. And no, there isn’t a formal link between the tax and social care spending. The present Government may be determined to spend the funds raised for their stated purpose, but in reality they are general taxation.

    But there is nothing compelling the devolved administrations to spend the money they receive back on social care. Voters in Scotland, Wales, and Northern Ireland will thus be paying a ‘social care levy’ that, for them, is no such thing.

    Canny devolution supporters will thus be able to both spend the extra money buying votes in the usual way whilst also attacking the tax increase as a Westminster imposition.

    What really matters for the purposes of building a stronger, deeper, and more perfect Union is not just UK-wide taxation but UK-wide spending and, just as importantly, proper Westminster oversight for British cash disbursed to the devolved executives.

    This was the point of the UK Internal Market Act’s provisions empowering London ministers to spend additional funds in areas of devolved competence. It is the logic underpinning the upcoming Subsidy Control Bill, which will consolidate Westminster’s position as the heir to Brussels in maintaining the coherence and fairness of the British internal market.

    Yet there will still be much more to do. The Government ought to be explicit that collecting uniform, comparable data is a legitimate function of the central state and mandate the Office for National Statistics to collect it nationwide, thus thwarting long-standing efforts by the SNP and Welsh Labour to mask their records from proper scrutiny. Likewise, control of the census should be reclaimed from the Scottish Government with all speed.

    What ministers ought not to do, however, is allow ‘saving the Union’ to become merely a rubric under which any old policy can be given a patriotic lick of paint. At best, that is a recipe for complacency. At worst, it risks actively undermining the cause of Britain by presenting as unionist policies whose operation is, whatever their other merits, not.