When No Means More – Assessing the feasibility of the timetable for enhanced devolution

Published: 11 September 2014
Author: Nicola McEwen

Scottish constitutional preferences have long been split (at least) three ways - between those who supported independence, those who supported the constitutional status quo, and those who wanted a stronger Scottish Parliament within the UK – let’s call them the devo-maxers. The promise this week of speedy legislation to bring new powers to the Scottish Parliament is intended to prevent the devo maxers drifting in ever greater numbers towards a yes vote.

An Agreement to Agree – the new timetable

The three Better Together parties had already set out their own proposals for reforming devolution in the event of a No vote. These were meant to be included in each party’s manifesto at the 2015 UK general election, giving the winning party a mandate for change.

This week, the three parties, apparently on Gordon Brown’s initiative, promised a faster timetable towards new powers:

  • Immediately after the referendum: a motion in the House of Commons setting out the process
  • by end October: a UK government command paper laying out the different party proposals
  • a month-long process of party talks and consultation with civic Scotland
  • by the end of November, a UK government White Paper setting out an agreed set of new powers
  • by 25 January, scrutiny of the proposals, consultation with the Scottish Parliament and a new Scotland bill tabled before the Westminster parliament.

This is barely credible, and unlikely to be a path towards a new, sustainable constitutional settlement for the Scottish Parliament.

The last revision to the Scottish Parliament’s powers was years in the making. The Calman Commission took over a year to come up with its proposals, and it took three years from publication of the commission’s final report for the Scotland Act 2012 to reach the statute books. The Act’s main provision - the establishment of a new flat rate Scottish income tax - is not due to come into effect until April 2016. It’s not clear what the timetable for implementation of any new proposals would be, and whether they would supersede the tax provisions of the 2012 Act.

Legislate in haste, repent at leisure

Is it feasible to secure agreement between the parties within a month? True, each of the parties have produced proposals for further devolution which have emerged from internal commissions, after periods of reflection. But unlike Calman, these proposals were products of party political calculations and compromises.

There is overlap between them, most notable in their support for some form of further income tax devolution. But even here there are significant differences:

  • The Conservatives and the Liberal Democrats support devolving almost all income taxes, including the power to vary tax rates and thresholds.
  • They are also sympathetic to assigning a share of some further revenues (e.g. from VAT or corporation tax) to the Scottish Parliament
  • The Liberal Democrats favour devolving air passenger duty, capital gains tax and inheritance tax.
  • Labour’s more modest proposals, which follow the Scotland Act 2012 model, would see the devolved rate of income tax increase from 10p at each rate (the 2012 provisions) to 15p at each rate, with an opportunity to increase (but not decrease) the upper rates.

It is difficult to see how these differences could be reconciled within a month, unless the more ambitious proposals of the Conservatives and Liberal Democrats are to be set aside.

Political agreement between parties doesn’t necessarily mean that the proposals would be workable. Any new proposals should be subject to extensive scrutiny to test whether they can operationalised and to assess their implications on budgets, bureaucracy, services and citizens. What would be the impact of having higher tax rates for high earners in Scotland – would it increase revenue or lead to middle class flight? If the UK government was to cut the higher rate, would this mean higher taxes in Scotland by default, since under Labour’s proposals the Scottish Parliament could only raise, but not lower, the Scottish rate of income tax?

While all three parties favour retaining most welfare and social security powers at Westminster, both Labour and the Conservatives support devolving housing benefit and attendance allowance. Quite how this would happen, and with what implications, is also unclear, given the highly centralised nature of UK social security and the system for calculating benefit entitlements:

  • Would the devolution of these benefits mean establishing a new social security bureaucracy in Scotland? If so, at what cost and to whom? If not, how could such a centralised system accommodate separate Scottish policies in the areas of housing benefit and attendance allowance?
  • Attendance Allowance is currently processed for the whole of the UK in DWP centres in Preston and Blackpool. Would these centres have separate service agreements with the Scottish government? What would be the impact on their capacity to deliver such a service were it to be designed in different ways in Scotland and the rest of the UK?
  • Housing Benefit is already administered in DWP offices in Scotland (which also process claims for parts of England). But, it is one of six cash benefits being merged and replaced by the Universal Credit under the UK Government’s welfare reforms. Could it be disentangled from the other benefits and tax credits which make up Universal Credit?
  • And, crucially, how would these services be funded? Since Scotland would essentially be opting out of UK-wide schemes, on what basis would it be financially compensated to ensure that the Scottish government had sufficient resources to cover the costs of these benefits?

There may well be answers to these questions that could make the various proposals workable, but I doubt if robust solutions to the more difficult issues could be found within a matter of weeks.

A voice for the people

One of the highlights of this referendum campaign is the extent to which it has energised people the length and breadth of Scotland. Citizens not affiliated to parties or established groups have been engaging with enthusiasm over Scotland’s future. Some campaigners from Better Together (like Douglas Alexander) have called for a constitutional convention in the event of a No vote, to help build consensus on the future of devolution. Yet, the legislative timetable set out this week provides no scope to consult the wider public – doing so in any meaningful way would require much more time than a few weeks.

Lack of public engagement could make it difficult to secure popular legitimacy for the new devolution proposals. If there is a No vote next Thursday, surely it would be better to take stock and properly engage the people in charting a path towards a new constitutional settlement. To rush headlong into new legislation may curry favour in the short term but is unlikely to provide a lasting settlement.

Professor Nicola McEwen is Associate Director of the Scottish Centre on Constitutional Change