Do the Conservatives Hold the Key to a Deal in the Smith Commission?

Published: 13 October 2014

Professor Charlie Jeffery argues that the Conservative Party now occupies the middle ground among party views on more devolution in Scotland.

So now the parties’ initial submissions on additional powers for the Scottish Parliament have been sent to Lord Smith, and can be downloaded from the Commission website. Not much that we see there is new. Only the Greens have something which appears genuinely new (and emphasises, unlike the others, the need for genuine public consultation with whatever the Smith process produces). The Liberal Democrats, Labour and the Conservatives have each pointed Lord Smith to the proposals for their respective devolution commissions as published by the Lib Dems in October 2012, Labour in March 2014 and the Conservatives in May 2014.

The SNP’s proposals (well, actually the Scottish Government’s proposals, as endorsed by the SNP) are set out in a new paper, but are also not new. The Scottish Government has restated its understanding of maximum devolution within the Union as set out in its 2009 White Paper Your Scotland, Your Voice. This was the culmination of the ‘National Conversation’ launched after the SNP’s first Scottish Parliament election victory in 2007 and itself drew on earlier papers including one which set out an understanding of what ‘full fiscal autonomy within the UK’ would look like. Much the same understanding has been restated in the Scottish Government’s new paper for Lord Smith.

So where does all this leave us? Is there a basis here for Lord Smith to find compromise? The outlier positions are those of the SNP and Labour. The SNP knows it will not get ‘maximum devolution’, that is the devolution of everything except the UK-level constitution, monetary policy (aka continuing currency union), citizenship, defence and foreign affairs and intelligence and security. But this maximalist position will keep pressure up on the other parties.

Labour’s position is interesting. It has proposals which are more extensive in some areas (welfare devolution, strengthening local government) than the other pro-union parties. But on tax devolution – which is likely to be the highest profile issue in the coming weeks – it lags behind the others. It has said that at most 40% of the spending of the Scottish Parliament should be covered by revenues raised through its own decisions. Independent analysis for the Future of the UK and Scotland programme by the Institute for Government suggest the actual figure implied by Labour’s proposals is around half that, and significantly less than implied by the Conservative and LibDem proposals.

So there is a spectrum of proposals with Labour at the devo-modest end and the SNP at the devo-max end. This draws attention to the middle ground. Political science looks for the ‘median’ position, the position that is the fulcrum around which a majority or compromise position can be created. This looks to be that of the Conservatives.

The Conservatives (unlike Labour, but like the LibDems) have proposed the (almost) full devolution of income tax and (like Labour) envisage significant welfare devolution in the form of housing benefit, attendance allowance and have suggested also a more general power to vary benefits from the UK benefit level. Significantly Gordon Brown (though with what Labour Party backing is not clear) has set out the bones of a deal he could foresee that could reconcile the more modest position of Labour on income tax with the Conservatives’ proposal for assigning a proportion of Scottish VAT revenues to the Scottish Parliament’s budget. Now there is a thought, a Brown-Conservative deal on devolution ...

But the Conservatives have also said that their prior proposals are ‘a floor not a ceiling’. They could go further, which means, in effect, heading some additional way in the direction of the SNP’s devo-max vision. They can deal too with the SNP.

So the Conservatives have emerged as the median party for Lord Smith, the one around which the deal may need to be constructed. Who would have thought it: after their history of opposition to devolution, with all sorts of lines in the sand over the years, the Conservatives end up as the necessary component of a compromise deal on extending Scottish devolution.

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