It’s extremely uncomfortable, especially at mealtimes. All week my mouth has been dropping open inconveniently, bouncing off my chest, getting in my food, stifling coherent speech. The reason: the Shadow Foreign Secretary, Douglas Alexander’s, jaw dropping intervention in the independence debate. In a speech in Glasgow the one time protege of Gordon Brown (they’re not so close these days) appeared to dump the Scotland bill in the dustbin of history and promised “an open-minded approach as to how the architecture of devolution can be improved”.
The clear implication is that Labour at least are no longer viewing the Calman Commisson report, and the Scotland Bill it inspired, as the last word on Scottish home rule. Or rather, Labour is no longer prepared to go into the Scottish referendum allowing Alex Salmond to have an each way bet on the result, by supporting devolution max and independence. Alexander is unspecific about exactly how far he is prepared to go down the road towards “devolution max” but there is no doubt that Labour is now resolved not to go die in the last ditch defending the status quo, while the SNP adopt the mantle of devolution. I talked with him in the BBC studios on Saturday, and his irritation at the way the SNP have claimed credit for home rule, and made the Scottish parliament their own, even though they boycotted the Scottish Constitutional Convention, is very clear.
If there is a better devolution available, Labour will sponsor it.
This is an astonishing moment. The ground is moving under our feet. If Labour is now contemplating fiscal independence, and though Alexander has not said this, I believe that is what he means, then we are on the verge of a constitutional revolution. Let me explain: the Calman Commission was, in a sense, unionism’s last throw of the dice. Professor Calman made what I argued at the time was a compelling argument for the Scottish parliament to have tax raising powers. A grown up parliament must take on the responsibility of raising the money it spends, he said. It must be accountable for its actions, transparent, fair, efficient. However, the Calman solution, a fifty fifty split of income tax, was never very coherent and had all the hallmarks of a Whitehall fudge. Even its supporters have difficulty explaining how it would work, or be an improvement on the present arrangements of a bloc grant from Westminster.
The only way forward from Calman is a form of fiscal autonomy where the Scottish parliament raises the vast majority of the money it spends. This has the advantage of moral clarity, and fiscal transparency. There is no jiggery pokery with revised Barnett Formulas, no deflationary fiscal devices. There will be tax sharing, as there is in all federal arrangements, but the fundamental principle that parliament should be accountable is upheld. Scots would no longer, under fiscal autonomy, be able to blame Westminster for “fiddling the figures”. The responsibility falls on the Scottish parliament to balance its books, pay its way, tax as well as spend. Make the hard choices. And they are hard. Fiscal autonomy is no easy ride for the SNP because it’s main propaganda message – ‘it’s all London’s fault’ – is whipped from under them.
No wonder Douglas Alexander/s namesake, Danny – the Treasury (?) is sounding increasingly desperate. The unionist coalition built around the Scotland Bill has fallen apart. But this is only a recognition of reality. Calman was a victim of the May election, when the SNP won an absolute majority in the Scottish Parliamentary elections. Alex Salmond can do exactly what he wants in Holyrood, and he has made clear he is not going to vote through the Scotland Bill in its present form. Since the passage of the bill requires the consent of the Scottish parliament this has killed the bill because the SNP will simply it. What is Westminster going to do? Impose a radical new tax regime which has been rejected by the Scottish Parliament? Hardly.
Douglas Alexander is a gifted political strategist and he saw the meaning of May long before his Scottish party had woken up from their post election hangovers. It changed everything. Not just the balance of power in Holyrood, but the whole trajectory of Scottish, and British politics. His sister, Wendy Alexander, may have set up Calman but that was in a different age. Labour now faced the danger of being left out of the new order – forced to go down with a bill that has been moved by the hated Liberal-Tory coalition. Labour had no option but to change course, as he tried to tell them in October when he reminded them that they had been “gubbed”. If Labour go into the independence referendum chained to a Tory bill they will be gubbed for good.