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Better Together won the referendum. So why does it feel like they lost?

READ IAIN ONLY IN THE HERALD AND SUNDAY HERALD
Better Together won the referendum fair and square – rumours of vote fixing and dirty tricks are a silly diversion.  So why does it feel like they lost? Nicola Sturgeon formally announced her candidacy for SNP leader as if she were leading a victory march. If this is defeat, I can’t imagine what real victory would look like.

Labour won the Battle for Britain and then got blown into a leadership crisis which has left Johann Lamont twisting in the wind as the press places odds on Jim Murphy as her successor. The Scottish Tories have been shafted by David Cameron’s opportunism in linking Scotland’s constitutional future to English Votes for English Laws. He couldn’t resist the temptation to get one over on Ed Miliband. Everyone is ignoring the Liberal Democrats who now have fewer members in the entire UK than the SNP do in Scotland alone.

When has a party ever lost an election and then tripled its membership? The SNP membership is now 75,000 and counting. Indeed, all the Yes parties have more doubled their memberships, including the Greens and the SSP. This is a very strange development which no-one could have forecast.It seems that many of those voters who were energised by the Yes campaign simply don’t want to go back to business as usual. They have marched into the existing parties determined to keep radical politics alive. We don’t know yet how this is going to change the parties, but it assuredly will.

Indeed, it is all getting a little out of hand. Some Yes campaigners have been talking about a “revote” and petitions and rallies are being organised across the country to start the campaign for another referendum. But that isn’t going to happen.  It wasn’t just Alex Salmond who ruled out another referendum for the next generation. The SNP realise that, if they proposed another referendum, they would only lose it. The Scottish people would regard it as a breach of trust, and that could damage the SNP’s chances in the 2016 Scottish parliamentary elections.

Nicola Sturgeon has placed the SNP firmly in the devolution process and insists that she isn’t privately hoping that the new legislation proposed by the Unionist parties will fail. The SNP will not boycott the Smith Review in the way it refused to participate in the Calman Commission in 2008.

So – where do we go from here? Well, Lord Smith of Kelvin, the Crossbench peer who has been put in charge of drafting the next devolution bill, is speaking to the party leaders this week. If he thought the SNP would make his life any easier by opting out of the process, he has been disabused. Their participation alters the balance of power in the devolution equation fundamentally. It is no longer the property of the Unionist parties.

The Scottish Government is in a position to turn this bill from tokenism to substantial home rule. But it cannot do this alone. Scottish civil society will need to be involved – trades unions, third-sector charities, churches, think tanks like Reform Scotland and academics in Scotland’s universities. There is no time for another Scottish Constitutional Convention to be set up to map out the next stage of home rule, but neither is there any real need for one.

There really is only one plausible destination now for Scotland and that is federalism, or as Gordon Brown put it “a system of government as close to federalism as you can have in a nation where one part forms 85 per cent of the population”. This was implicit in the Vow made by the Unionist parties in the dying days of the referendum campaign that almost certainly saved the Union.

What does federalism mean? Well, first of all the Scottish Parliament should become a permanent sovereign institution, entrenched by a statement with equivalent constitutional weight to the US Declaration of Independence. It should also be broadly responsible for raising the money it spends and have the ability to use the taxation system to promote economic and social objectives. This doesn’t just mean another 5p in the pound on income tax.

The Scottish Parliament should have the power to raise not just income taxes but oil revenues, corporation tax, excise duties, inheritance and capital gains tax. Holyrood also needs responsibility over areas like the Crown Estate and broadcasting, which should never have been reserved in the first place.

Westminster would retain responsibility for defence, foreign affairs, currency and matters like bank regulation which have to be organised at a UK level. It would also have a role in redistribution through a successor to the Barnett Formula as in other federal systems. There would be tax sharing to ensure that parts of the UK do not fall behind economically.

There is one problem however: Westminster. Despite Mr Cameron’s call for English Votes for English Laws (EVEL) there is no serious proposal for redesigning the UK constitution as a federation. The United Kingdom practically invented modern federalism in former colonies like Australia and Canada, and Britain was responsible for imposing a federal constitution on Germany after the Second World War. But the language of federalism – separation of powers, written constitution and so on – is still alien to Westminster.

This means that Scotland will have to embark upon home rule without any early guarantee that the rest of the UK will go along with it. English voters, while they may think Scotland gets a bit too much public spending cash, don’t appear to want to go to the trouble of setting up an English parliament, a federal level of government and devolution to English regions. They may want this in future, but right now they’re pretty happy with their own parliament in Westminster, perhaps with Scottish MPs excluded from votes on purely English matters.

Will the other Scottish political parties sign up to Scottish home rule? Well, the Scottish Liberal Democrats will since they have been down this road before. The Scottish Conservatives already favour a form of fiscal autonomy, though it is confined to income tax alone. But the problem here is that Holyrood would have a structural deficit if its revenue raising powers were confined to income tax.

The logic of fiscal devolution, surely, is that the Scottish Parliament should have responsibility for raising the vast majority of the revenue it spends. This implies that the proposals from Reform Scotland for 60% of Holyrood revenue to be raised through taxation has to be the starting point for this process.

And if it doesn’t happen? If the Westminster parties try to fix the constitution so that devolution max turns into devolution minus? Hopefully the UK state will have noted that the referendum result was not an endorsement of the constitutional status quo. Labour could be wiped out in Scotland if the Smith review doesn’t deliver. The Tories already are all but extinct here.

The SNP is growing in strength. This really is the last chance for the Union. The referendum has not been an end but a beginning. And there are 1.6 million reasons for the Westminster parties to wise up and deliver on Gordon Brown’s promise.

originally published in Herald 25/9/14

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