When the former Tory Lord Chancellor, Michael Gove, declared during the referendum campaign that Scotland could have “sweeping new powers” after leaving the EU, few believed him. Deputy First Minister John Swinney dismissed it as “a con trick”. But perhaps he should now be holding the UK Government to his word. The Scottish Government has rightly been exploring options for keeping Scotland in some form of relationship with the EU. But that shouldn’t prevent it looking for ways of exploiting the EU negotiations to increase the powers of the Scottish Parliament in the here and now.
In this current Brexit phoney war, Nicola Sturgeon could have significant bargaining power and she should use it. The Prime Minister, Theresa May, has said she won’t fire the Article 50 starting pistol until there is “a common UK approach” backed by the Scottish Government. Since Scotland voted overwhelmingly to Remain, it has every right to expect substantially greater powers for Holyrood as the price of compliance.
For example, back in June, Mr Gove said that under the repatriated immigration powers, Scotland would be able to “decide the numbers of immigrants” under any new points-based system. This is a door the Scottish Government should push wide open, since Scotland needs migrant workers. He also said agriculture and fisheries policy could be wholly devolved to Holyrood after Brexit. The Scottish Government should be banging on the door of the Secretary of State for Brexit, David Davis, to demand this commitment is honoured as the powers are repatriated from Brussels.
People tend to think agricultural policy as boring and unimportant, but it is central to any sustainable approach to the environment and land reform. Scotland could use enhanced powers to develop a more locally-based form of agriculture which doesn’t simply reward the large scale industrial farms, as did the highly regressive Common Agricultural Policy. Why should HM Queen be receiving millions but not small farmers? Giving Holyrood power over £425 million in agricultural subsidies opens the way for greener land use that protects Scotland’s wildlife habitats and creates jobs.
Taking back control over Scotland’s extensive fisheries – the fourth largest in Europe – also opens the possibility of a more sustainable fishing industry. The Commons Fisheries Policy is geared to the interests of large-scale industrial fishing and has been much criticised for wasteful dumping of stocks. Handing fisheries policy to Holyrood also solves a political problem for the Scottish National Party. It has always had to juggle its support for the EU with the fact that many of its heartland seats are in the North East where the CFP has been blamed for loss of fishing jobs.
I’m not saying any of this will compensate for Scotland being forced out of the EU, but they are significant gains which could be made in this interregnum, especially if the Scottish Government speaks with the whole-hearted backing of all the parties in Holyrood. Take VAT which has hitherto been set Europe-wide. The Scottish Government should demand Holyrood is now given the power to set and raise VAT, and not just collect half the revenues. This would give the Scottish Parliament a significant new tax base in addition to the income tax powers coming next year. There is also a strong case for business taxes like corporation tax to be devolved now that the attempt to harmonise corporate taxation across the EU is being abandoned.
In face of a post-Brexit recession, and as part of her plan for an economy that “works for everyone”, Mrs May has promised to issue Treasury-backed bonds to fund new roads, rail, broadband and power projects. This is a profound change in UK economic policy away from austerity – narrow debt reduction. Mrs May has scrapped George Osborne’s dogmatic Fiscal Charter under which the government was legally bound to run a budget surplus by 2020. Instead, everyone – including industry lobbyists – is suddenly talking about public borrowing to finance infrastructure programmes. This is an opportunity for the Scottish Government to demand further borrowing powers for Holyrood.
The pro-independence Common Weal think tank has rightly argued borrowing is, if anything, more important than taxation powers. Their head of policy, Ben Wray, has made a convincing case for the Scottish Futures Trust to be converted into a Scottish National Investment Bank which would issue bonds to finance public projects. A new form of public investment is plainly needed to replace the discredited public-private partnerships which have led, among other scandals, to school buildings collapsing like dominoes across Scotland. But any form of direct public finance comes up against the arbitrary 5 per cent borrowing limit imposed by the UK Treasury. Now that borrowing is back UK-wide, Ms Sturgeon should argue for Holyrood’s borrowing limit to be raised.
Scotland should also demand its share of any “Brexit dividend”. The Scottish chairman of Vote Leave, the former Labour MP Tom Harris, said in June Holyrood would be in line for a £1.5 billion windfall as its share of the EU budget contributions which are no longer being made. The Scottish Government could use some of that. Scottish higher education should benefit from being able to charge fees from EU students who make up 9 per cent of the student body. The Scottish Government can press ahead with minimum alcohol pricing.
So, there is much do be done to ensure Scotland gets the best possible deal from Brexit. Some may regard this is as defeatism – that we shouldn’t accept leaving the EU is a done deal. But it almost certainly is – and there is no reason why the Scottish Government shouldn’t seek to minimise the impact on Scotland. Certainly, this is no time for sitting on our hands.
Nor does negotiating Brexit concessions have any bearing on the timing of the next independence referendum. The more powers Holyrood acquires, the more voters are liable to look favourably on full independence. There is, anyway, a mood of anxious introspection right now in the pro-independence movement, as the SNP dithers about if and when to announce another referendum. The troops are getting restless. There’s squabbling on the internet between former elements of the Yes Alliance. Former SNP spin doctors are trashing the independence white paper. The devil makes work for idle hands.
Meanwhile, Ms Sturgeon has embarked upon a courageous move to reform the Scottish education system and close the attainment gap – a project which could consume vast amounts of her government’s energy for the next decade. It is probably unachievable – which of course is not a reason not to try. But deep-rooted economic and social inequalities underlie the failure of students from working class backgrounds to go to university. No opportunity should be missed for improving the Scottish economy which is the best way to erode these inequalities.
SNP MPs should get to work now planning ways of tagging specific demands onto the legislation removing Scotland from the EU. Brexit means Brexit, says Mrs May – but no one actually knows what Brexit means. It is now time for the Scottish government to fill in the dots.