Sovereignty
How the Budgets work

How the Budgets will work under the Sovereignty model 

Understanding how budgets operate within the Sovereignty model is crucial because it directly impacts the democratic promise of this system—ensuring that representatives are accountable to the electorate for their fiscal decisions. Here's how the budget process would function under Sovereignty, highlighting the mechanisms that allow RMs to fulfil their campaign promises while maintaining national fiscal coherence:

For Representative Ministers (RMs):

1. Developing Policy Platform, Budget, and Tax Proposals:

   • Election Manifesto: Each RM would campaign with a manifesto detailing their policy goals, how they intend to finance these (budget), and any tax changes they propose. This serves as a contract with voters, clearly stating what they will do if elected. The Treasury would provide access to economic data, fiscal forecasts, and analytical tools to candidates running as RMs, enabling them to make informed budget projections and policy commitments. Additionally, they could offer workshops or consultations with Treasury analysts to help candidates understand the economic implications of their manifesto promises, ensuring these are grounded in fiscal reality. This can all be mandated in the Sovereignty Act. 

2. Post-Election Coherence with National Budget:

   • Negotiation Phase: After the election, RMs would negotiate their budgetary and tax needs with each other and with the Chancellor of the Exchequer. This negotiation aims to align individual departmental plans with national fiscal objectives, ensuring that the sum of all departmental budgets fits within the national fiscal framework, including any tax cap to be set in the Charter for Budget Responsibility.

3. Finalising Budgetary and Tax Changes into Law:

   • Single Finance Bill: The Chancellor, with input from all RMs, would draft a comprehensive Finance Bill that incorporates all agreed fiscal changes. This bill would then go through parliamentary scrutiny:

     • Readings in Parliament: The bill would be debated, potentially amended, and voted on in Parliament.

     • Direct Vote: On 05 November following a 05 July General Election, the designated voting day, the public would vote on the Finance Bill alongside Parliament, ensuring direct direct democratic input.

4. Executive Decision-Making:

   • Within Framework: As is currently the case, RMs will be able to make executive decisions on how to use their allocated budget within their department's policy framework. For instance, they could decide on specific projects or reallocate funds within their department without new legislation, provided they stay within their budget and do not contravene existing tax laws.

Role of the Chancellor of the Exchequer and the Treasury:

• Chancellor of the Exchequer:

  • Elected Minister: The Chancellor would be directly elected under the Sovereignty model, like other RMs. In running for office as the RM Chancellor of the Exchequer they would be required to outline their vision for tax limits, providing voters a clear idea of the maximum amount of tax they may be liable for under their leadership. 

  • Responsibilities: They would oversee the national budget, coordinate fiscal policy across departments, and ensure that fiscal discipline is maintained. The Chancellor would draft the Finance Bill and update the Charter for Budget Responsibility based on the collective input and negotiations with other RMs. 

• Treasury:

  • Central Coordination: The Treasury would act as the central body for financial policy, ensuring coherence in national finances. It would analyse economic conditions, draft fiscal policy, and prepare the legislative texts for the Finance Bill and Charter.

Ensuring the Chancellor Does Not Become a "Kingpin":

In the Sovereignty model, the independence of Representative Ministers (RMs) in managing their departmental budgets and tax policies is fundamental to ensuring that governmental actions reflect the diverse needs and promises made to different constituencies. However, the Chancellor of the Exchequer holds a pivotal role in coordinating national fiscal policy, which could potentially centralise power if not properly balanced. It's crucial that the Chancellor does not become a "kingpin" because such concentration of power could undermine the accountability, transparency, and democratic ethos that the Sovereignty model aims to enhance.

• Recall Mechanism:

  • Accountability: Like all RMs, the Chancellor would be subject to recall. If the public feels that the Chancellor is not acting in line with the electorate's will or is abusing their position, they could initiate a recall process. This keeps the Chancellor accountable to the voters.

• Checks and Balances:

  • Parliamentary Oversight: Parliament would have the power to scrutinise, amend, or reject the Finance Bill, preventing unilateral control by the Chancellor.

  • Direct Democracy: The public's role in voting on major fiscal changes provides a direct check on the Chancellor's power.

• Transparency and Collaboration:

  • Open Process: The process of budget negotiation, drafting the Finance Bill, and updating the Charter should be transparent, utilising the Sovereignty Online platforms for electoral input. This ensures the Chancellor works collaboratively with the electorate rather than dictatorially.

• Fiscal Rules:

  • Charter for Budget Responsibility: In annual budgets following the election year - i.e. interim budgets - the Charter for Budget Responsibility would have been established and would set clear fiscal rules or targets, which the Chancellor must follow, reducing the scope for unilateral fiscal manipulation.