Tag Archives: Devolution

Too little, too late?

Is the above to be the long term verdict on the Smith Commission recommendations, published today? First thought, Lord Smith and his team deserve a warmth round of thanks. To have come up with any kind of agreement among the five political parties is quite an achievement it itself. The Commission also seems to have done a fair job of media management. Nearly all of the media are reporting the proposals in glowing terms, or in the case of some English outlets at least as some significant new powers for Scotland. First impressions from the media, however, are rarely very reliable indicators of lasting success.

My reading of the report chimes very much with the verdict of Professor Michael Keating from Aberdeen University, who sums up the report thus: The Smith commission report provides the minimum amount of extra devolution required to meet the expectations raised by the famous ‘vow’ from the three UK party leaders in the last week of the referendum campaign. Minimum amount of change perfectly describes the essentials of the recommendations.

Not to be churlish, there are a few positives in the report relating to the Crown Estate in Scotland, Air Passenger Duty, elections and the operation of the Scottish Parliament, and a few others. All important, but hardly the stuff of Devo-Max or a Powerhouse Parliament.

However the recommendations have to be judged against the objectives set out by the Commission itself. It refers to them as the three pillars:

  1. providing a durable but responsive constitutional settlement for the    governance of Scotland
  2. delivering prosperity, a healthy economy, jobs, and social justice
  3. strengthening the financial responsibility of the Scottish Parliament

It is not clear that the recommendations will fully achieve any of these pillars. As regards the first – a durable and responsive constitutional settlement – there are two obvious weaknesses. The first is that without a written constitution there is no way that the current or proposed constitutional settlement can be made permanent. UK legislation can state whatever it likes, but no legislation can bind any future government. It is also noteworthy that the report recommends that changes to the electoral system or the workings of the Scottish Parliament be subject to a two-thirds majority. This limitation and requirement is to be imposed on the Scottish Parliament by legislation at Westminster. However no such requirement is deemed necessary for Westminster itself.

This highlights the other weakness in the proposals, namely that they focus entirely on Scotland. This may seem a strange criticism, but given the result of the referendum, any proposals for constitutional change need to take account of how they will affect the governance of the UK as a whole. This not exactly the fault of the Commission which was restricted in its remit. However it does raise serious question marks as to the willingness of the rest of the UK to accept the recommendations as they stand.

When it comes to the economy, jobs and social justice, there is very little change at all. It is amazing to see how often a paragraph ends with the words – will remain reserved. In this case all of pensions and effectively all of welfare are to remain reserved matters. The Scottish Parliament will have new powers to create new benefits in areas of devolved responsibility. However these can only be at the margins as any monies to be spent will need to be raised by the Scottish government. Which is only right and proper, but the report contains virtually nothing in the way of substantive additional revenue raising powers.

Which leads nicely on to the final pillar – financial responsibility. While a lot of noise will be made about the recommendations in this area, they amount to little more than re-arranging the deckchairs on the Titanic. The Scottish Parliament will gain the power to set the rates and thresholds for personal income tax and the first 10% of the standard rate of VAT will be assigned to Scotland. This is all fine and dandy, but in return the current block grant assigned to Scotland will be reduced by exactly the same amount. We gain no say or control over the rates of VAT. While income tax is important it is only one of many, many taxes available to governments and one which will prove in practice, difficult to change from the rates set by Westminster. Richard Murphy of Tax Research UK explains here, why devolving income tax is the worst possible solution for everyone. All the other revenue sources remain reserved.

So, all in all, the recommendations are pretty timid and completely fail to address the key issue facing the UK as a whole, namely the over centralisation of power. Political power will remain concentrated at Westminster, while economic power will remain concentrated in London. Not much was expected from the Smith Commission and in this respect it has not disappointed.

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Engaging with the Smith Commission

Now that the referendum is well and truly over, the only show in town is the Smith Commission. This is the UK government’s way of taking forward the famous or infamous Vow made by the leaders of the three Unionist parties at Westminster. A commission to be headed by a member of the House of Lords. All very typically British. Yet, the good Lord Smith has been welcomed by the SNP and others in the pro-independence movement. Despite the top down nature of the work of the Commission there is scope for members of the public to contribute, Have your say – Submitting ideas, views and proposals to the Commission, which you can access here. We should all be encouraging as many people as possible to submit their views on what further powers they think should be transferred to the Scottish Parliament.

There is a restriction however on what the Commission will consider. As an initiative of the UK government, the Commission has been asked to come up with recommendations for further devolution of powers to strengthen the Scottish Parliament within the UK. This is hardly surprising and there is no point in bemoaning this. While independence is off the table, there remains a great deal of scope to challenge the current constitutional set up of the UK. In point of fact the good Lord positively invites us to do so. In the Guidelines that the Commission has published there is a list of key questions for people to consider when making a submission. One is, What is your assessment of the current situation? This seems to me to be an open invitation to point out the weaknesses and failures inherent in the current devolution settlement. Below is my initial attempt at this analysis.

Despite the creation of the three devolved parliaments/assemblies for Scotland, Wales and Northern Ireland, the UK remains a very centralised state. As has been noted many times, power devolved is power retained. The current situation is also, in part because of this centralisation of power, and in part due to the rather haphazard and ad hoc way in which devolution had developed, a very unstable settlement. This is the case both in relation to devolved and non devolved powers.

The current situation in relation to devolved powers

1. Constitutional issues
As all three devolved parliaments/assemblies are the result of Acts of the UK Parliament, they can all be amended or even abolished by another Act of the UK Parliament. While this extreme, abolition, may be regarded as unlikely, its possibility is a clear demonstration of the fact that final power remains with Westminster. It is also the case that only the UK Parliament can legislate changes to the current settlements. Whatever consensus there may be in Scotland or Wales or Northern Ireland for additional powers, the final say still depends on the approval of Westminster.

This combination of power retained and uncertainty has been compounded by the lack of a corresponding devolution settlement for England. Thus Westminster remains a most confusing miss mash of powers and responsibilities. The UK Parliament and government exercises power over at least four discrete geographical areas: 1. for the whole of the UK e.g. defence and foreign affairs, 2, sometimes for England, Wales and Northern Ireland, 3, sometimes for England and Wales, and 4. sometimes just for England. In addition the UK Parliament effectively acts as the government of Scotland when it has sole power to set the level of the block grant for the Scottish Parliament. The UK Parliaments acts in a similar way as the government of Wales and the government of Northern Ireland when it sets their block grants.

This lack of clarity about the precise role and powers of Westminster can also be seen in the difficulties that all UK parties have had in relation to English Votes for English Laws (EVEL). That EVEL has become an issue is itself a direct consequence of the failure to create a devolved English Parliament.

2. Finance
The concentration of powers at Westminster also applies to how the three devolved parliaments/assemblies are financed. The Scottish Parliament, like the other two devolved administrations, has operational and policy making powers over the various devolved areas – education, the NHS etc. However the Scottish Parliament has only limited powers over its revenues. That this is due to change in 2016, with the implementation of the latest changes decided at Westminster is clear evidence that the current situation regarding finances is unsatisfactory. Further evidence of this is that all three UK parties made the devolution of further revenue raising powers to the Scottish Parliament a key part of their campaign during the recent referendum.

The prime reason for this dissatisfaction with the current situation is that reliance on another body for finance means that the Scottish Parliament is not fully in control of all aspects of the devolved matters. Even with the planned changes for 2016 and the published proposals from the UK parties for further tax raising powers Westminster will remain in control of most of the Scottish Parliament’s budget.

This is a matter of concern both in terms of democracy and good governance. That a Westminster government with little or no mandate over devolved matters has the power to alter the block grant is profoundly undemocratic. The practice of good governance is enhanced when the body that has legislative powers for policy and spending also has the responsibility and powers to raise the monies to be spent. The lack of this key power over revenues is a disincentive to good governance and a continuing source of friction between the devolved parliaments/assemblies and Westminster.

The current situation in relation to non devolved powers

The history of devolution in the UK is one of a succession of ad hoc decisions by the UK parliament. Beginning with the demand for Home Rule for Ireland. A demand which Westminster failed to respond to adequately. In each successive case Westminster has re-acted to pressure from one or other of the three peripheral nations – Scotland, Wales and Northern Ireland. As the history of each of these nations within the UK has been different, the Westminster response has also been different. In the case of Scotland this meant that devolution was essentially limited to giving the Scottish Parliament control over the matters that already had administrative devolution. At no stage in this process has there been any serious attempt by Westminster to to develop a coherent constitutional settlement for the whole of the UK. Such an exercise would inevitably include considering the powers that remain the exclusive preserve of Westminster. This is further confirmation that the UK remains a very centralised state when it comes to the exercise of power. To secure a stable and lasting devolution settlement for all of the UK will require all parties to re-examine the range of reserved powers, to determine which can be devolved.

This over centralisation of power at Westminster has had serious economic consequences for all parts of the UK. All UK governments have found it very hard, if not impossible, to govern in the interests of all parts of the UK. The latest recession – the deepest and longest lasting in modern times – is but the most recent example of this. The south east of England, including London seems to be the area that has most benefitted from Westminster policies. London and its environs seems to inevitably dominate the policies of all UK governments. With little in the way of economic and social levers available to other parts of the country this has resulted in a very uneven and unequal economy.

Conclusion

The UK still suffers from an over centralisation of power. The establishment of parliaments and assemblies in Scotland, Wales and Northern Ireland has alleviated this over centralisation, though only in part. Westminster remains the supreme and in many cases the only source of power. The failure to find a devolution settlement for England leaves the current situation in a state of seemingly permanent flux. The failure to give the devolved parliaments/assemblies sufficient tax raising powers to cover their spending means there remains a lack of democratic accountability at the heart of the current devolution situation.

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