Much as it pains me to say it, the United States currently represents a more perfect union than ours. Now that major constitutional change for Britain looks inevitable, let's do it properly (i.e. not like Gordon Brown's moronic ideas).
Westminster should have responsibility for national security, immigration, and the federal budget. We would elect a Prime Minister directly; they would control an executive. We would further elect a Parliament (like the Senate) who would control the purse strings, initiate legislation, and hold the Prime Minister to account. We would also elect the House of Lords as a purely revising chamber using proportional representation on 10 year rolling terms.
Then we would have English, Welsh, Scottish and Northern Irish assemblies. Each would have a directly elected First Minister (like governors in the US).
Each assembly would have its own (limited) borrowing powers, and control over health/education/community policing/further education policy.
There would be a clear separation between federal taxes/spending, and national level taxes/spending.
Furthermore, the same structure (with clear executive/legislative separation) should be pushed further downwards too. Let's have more directly elected mayors.
Britain's devolution structure has not been well designed at all (goes without saying, as it was designed to be a Labour stitch up, but they even screwed that up). Let's do it properly.