Smith Contributions - Purpose-built by accident

Lord Smith is due to present his report on proposed additional powers for the Scottish Parliament on 27 November. In the first of a series of blogs taken from our upcoming e-book, Beyond Smith: Contributions to the continuing process of Scottish devolution, Professor Charlie Jeffery considers how the politics of fifteen years of devolution will determine the outcome. He argues that, while there is clearly room for compromise between the parties, each sees Smith as a staging post on very different journeys.

It could all have been so very different. Like most constitutional reviews, the Smith Commission is a political creature, the child of necessity and expediency. The unionist and nationalist parties’ focus on tax and welfare devolution comes from very different rationales but allows room for compromise – if not for consensus – says Charlie Jeffery.

The SNP’s devo-maximalist approach to tax policy has its roots in the 1999 furore over the cost of the Scottish Parliament building and the concerns of Andrew Wilson, then the party’s finance spokesman, about its implications for other areas of public expenditure. Wilson called for greater devolution of powers over tax and borrowing, a position he and others would subsequently develop into a case for full fiscal autonomy. In their view, although second best to full independence, such a position would allow the Scottish Parliament the powers it needed to stimulate the Scottish economy, a position they extended in government as part of the ‘National Conversation’. In large part, the Scottish Government’s submission to the Smith Commission, formally endorsed by the SNP, is the extension of what Wilson called for within months of the Scottish Parliament being created.

The road to greater tax devolution was a little more convoluted for the unionist parties but starts in 2006 with the report by the Liberal Democrats’ Steel Commission. While stressing that Scotland should be firmly rooted within the UK, and part of a mutual ‘fiscal equalisation system’, Steel argued that the Scottish Parliament should be responsible for raising ‘the vast bulk of Scottish expenditure’ from taxes under its control. However, although the report nodded in the direction of the SNP’s claim that this would help economic growth, its main reasoning was that the Scottish Parliament would be made more accountable if it were tasked with raising the money it spent.

The accountability argument resurfaced with the Calman Commission in 2008/9, established by all three UK parties. Calman largely ignored the implications of tax policy for economic growth, stressing instead the importance of making Holyrood more responsible and reiterating that any new powers should ‘secure Scotland’s position within the union’. Notably these powers extended to the division of income tax, a proposal which, among others, was taken forward in the Scotland Act 2012.

As with tax, so with welfare – despite completely different rationales, some common ground can still be found between the two camps. The SNP, again, starts from a position of devo-maximalisation, but finds some congruence with unionist views based, broadly, on two quite separate arguments. The first seeks to ‘tidy up’ devolution – attendance allowance could reasonably sit with free personal and nursing care (and social services more generally); housing benefit fits alongside social housing policy; and the work programme could be part of efforts by Holyrood to encourage employment opportunities more generally. In short, a more coordinated approach.

The second rationale is that Scotland has different values in relation to welfare from England. Although there is limited evidence in public attitudes research to support this claim, the narrative of an ‘uncaring Westminster’ was one of the dominant (and more successful) themes of the Yes campaign. Additionally, UK welfare reforms – notably the so-called ‘bedroom tax’ – resonate with a political class weaned on the poll tax protests of the Thatcher years and make for common ground between the SNP, Labour and the Liberal Democrats.

So, there is some scope for producing a package of proposals which bridge the very different rationales held by the SNP on one side and the unionist parties on the other. In practice this would be towards the upper end of the unionist parties’ submissions to Smith. The SNP will, no doubt, decry the outcome as being lacklustre and insufficient but ‘bank’ it anyway as, they believe, one step closer to independence than the status quo.

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Charlie Jeffery's picture
post by Charlie Jeffery
University of Edinburgh
24th November 2014

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