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independence referendum, politics, scotland

Are unionists united yet on devolution max?





Thursday 3 April 2014

I was in London earlier last week as the April Fool jokes were being rolled out by the press at Scotland’s expense.

I particularly liked the idea of UN peace-keepers being brought in after a Yes vote to police the borders. But it may be that the Better Together campaign is in need of the blue helmets. For, behind the laughter there is a definite nervousness about what the hell is going on in Scotland.

The opinion polls have been going the wrong way with half of Scots apparently refusing to believe the pound scare. The unnamed minister who blew the gaff  about the inevitability of a currency union is only telling it like it is. No-one with any sense of history seriously believes that England would try to build a financial Hadrian’s wall to stop Scots using the pound. As Professor Anton Muscatelli put it in an article yesterday, trying to block Scotland using the pound would risk up to £24 billion in trade to the rest of the UK, and would be “tantamount to economic vandalism”.

The chairman of Better Together, Alistair Darling, has never been a particularly popular politician, but he seems to be making few friends right now. His call for an extra referendum on the currency, blurted out on the Today programme, was batted down by Number 10. There is consternation at Johann Lamont’s idea of giving Holyrood the power to put some taxes up, but not down again – if that indeed is what is proposed. Labour’s former finance spokesman, Richard Baker MSP, apparently told a nationalist website at the weekend that “the Scottish parliament could choose to lower income tax below the UK level, across all income tax bands”. That may be consistent with the report of Labour’s Devolution Commission, but I’m not sure how.

Labour and the Scottish Liberal Democrats are supposed to be united on giving Holyrood 15p tax-varying powers, and on giving the Scottish parliament a “federal” status, following Gordon Brown’s speech last month. But I have yet to hear anyone in Westminster say they are ready to turn the UK into a federal country, as proposed by the Menzies Campbell Report and explicitly endorsed by Gordon Brown. Federalism isn’t for the faint-hearted. It would require the establishment of a de facto English parliament, semi-detached from Westminster, to deal with uniquely English legislation. Something like this was proposed by the McKay Commission in 2012, and a number of academics believe it will be implemented to deal with the West Lothian Question if there is a No vote. But Labour don’t like the idea of an English parliament for the obvious reason the Tories might conceivably have a majority in it. A Labour prime minister would not then be in control of policies such as health or education across nine-tenths of the UK.

All the talk is of the Tories planning to hand nearly all income tax powers to the Scottish parliament as their big offer for the referendum. Rumours abound in the Westminster village that the Scotland Act is being amended so all Scottish tax bands could be varied every which way to give Holyrood effective fiscal autonomy. The Tories in Scotland could therefore kill two birds with one stone: they could snatch the devo-max initiative, and also start offering to cut taxes in Scotland at the next Holyrood elections.

But if the Scottish Tories do propose this it would be controversial in their own party. A lot of UK Tories believe, like the former Scottish Secretary Lord Lang, that enough is enough and that feeding the beast will only make it stronger. Fiscal autonomy is getting too close to independence for comfort. The Treasury would be worried it might lose control of Scottish spending altogether. Cutting taxes in Scotland while there is still a Barnett formula for equalising public spending could create anomalies. For example, a Scottish government might cut taxes in Scotland, while spending on health was rising as a result of an increase in UK health spending. So “Barnett consequentials” would have to go. And if they went, the Scottish Parliament might not be able to meet its bills without turning to oil revenues.

The columnist and former Conservative MP Matthew Parris probably spoke for many English Tories when he wrote recently that the Unionists should “kill the devo-max debate within hours of victory” in September. If the Scottish Tories have already conceded all income tax powers, plus various others, before the referendum this would clearly not be possible. Then, “wily” Alex Salmond would get his consolation prize, devo whatever-it-is, and we can’t of course have that. But the Scottish Tories have allowed expectations to be ramped up in Scotland to such a degree that anything less than full income tax powers will now be seen as an anti-climax here.

So, there are three potentially contradictory Unionist options on the table. Labour’s reverse income tax cap; the Liberal Democrat’s federal revolution; and the Tories’ fiscal max. It’s not impossible these three strands could be tied together into something coherent and presentable as a viable alternative to independence, but it is going to be difficult.

I suspect that, come May 23, the date when the referendum campaign really begins after the European elections, the Unionists will have to accept there is no consensus on an alternative to independence. Better Together will still say: “Vote No and be assured that the Scottish parliament will get more powers,” but none of the parties will be able to give any categorical assurances on legislation.

This is why this column has argued for the past year that if the opposition parties were serious they needed to convene a constitutional convention before rather than after the independence referendum. A daft idea, said many – and perhaps it was.

But without resolving these difficulties the Unionists are left in the Lord Home ’79 position of promising a better devolution without anything to back it up. If there is no consensus across the parties now then we can be pretty certain that after a No vote there will be even less consensus. What happened after the 1979 devolution referendum is seared into Scottish folk memory. The nationalists say that history will repeat itself. Scotland’s spending will be cut, representation in Westminster reduced, and oil revenues will continue to flow south.

Meanwhile, Better Together’s decision to base the campaign almost entirely on fears of losing the pound has become a real millstone. The problem with the whole pound scare is that no-one really believes it, and that forces reasonable people to start saying unreasonable things in order to defend it. It has undermined the moral basis of the Union, which is supposed to be a partnership between nations, without offering anything attractive as an alternative. This has been a pretty dismal week for the whole Unionist campaign and there is little sign of the “sunshine” solutions promised by the Scottish Liberal Democrat leader, Willie Rennie.

Were it not for a sympathetic press, the Better Together campaign would be in deep trouble. And there are still six months to go before Scotland goes to the polls.

About @iainmacwhirter

I'm a columnist for the Herald. Author of "Road to Referendum" and "Disunited Kingdom". Was a BBC TV and radio presenter for 25 years - "Westminster Live" and "Holyrood Live" mainly. Spent time as columnist for The Observer, Guardian, New Statesman. Former Rector of Edinburgh University. Live in Edinburgh and spend a lot of time in the French Pyrenees. Will that do?


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