Holyrood and the Scotland bill: the crunch looms

Robbie Dinwoodie reported in Friday’s Herald (here) that it was likely the Scotland Bill Committee at Holyrood would recommend that the Parliament withhold legislative consent unless joint commencement arrangements for the income tax provisions were agreed.  It’s odd that this particular issue should seemingly be the decisive one, though less so if one looks at the conduct of the various parties.

The unease of the Holyrood committee about the bill is no wonder.  The committee has an SNP majority, including three ex-ministers.  The UK Government has declined to amend the bill as requested by the predecessor committee, let alone in accordance with the changes sought by the SNP Scottish Government.   The bill already failed to incorporate some recommendations made by the Calman Commission (notably devolving a share of income tax arising from interest and dividend payments, air passenger duty and the aggregates levy), but included a UK Government wish-list of powers over matters like referrals to the UK Supreme Court and international relations that would increase UK power to control the use of devolved powers.  None of that is conducive to helping gain support for the bill at Holyrood.  There’s a long list of concerns about the bill, including those set out in my own evidence, and the evidence of Michael Moore and David Mundell last week may have been emollient but it was also unyielding.

But perhaps the key issue is the way the Scottish block grant is to be cut to allow for the new devolved power over income tax.  This has been a key objection of mine to the bill’s proposals, from the time it was published just under a year ago.  It ought to be fairly straightforward  to calculate the first year’s reduction, and illustrative figures for that could have been prepared when the first UK Government white paper was published in November 2009 (but wasn’t).  What’s more difficult is the methodology for adjusting that amount in subsequent years, so the amount by which the block grant is reduced in year 5 or year 10 after the new system is introduced is still ‘proportional’.  This issue was covered in a single sentence into the Calman Commission report, but took 10 pages in the Holtham commission’s report looking at the same issue for Wales.  Although the first Scotland Bill Committee made a recommendation about the approach based on the evidence of Gerald Holtham, the UK Government has still not set out its position about this vital issue – two and a half years, now, since the Calman report was published.  All Moore could say about this when questioned about it before the Holyrood committee last week was that a meeting with the Scottish Government had agreed ‘principles’ for the calculation, though he did not divulge what those principles were or how far the agreement went, and that the committee – and implementation of the Act – meant he should be trusted.  It was telling that many of the sharpest questions on this point came from David McLetchie, the only Conservative on the committee.  They aren’t limited to the SNP, nor should they be.

The Scottish Government’s proposal for joint commencement (or, more accurately, implementation) arrangements arises principally because of this lack of clarity about the reduction in the block grant.  Their position is that this is a way of ensuring that the approach taken by the UK Government does not undermine the interests of the Scottish Government.  Given the importance of the point and the UK Government’s lack of clarity about it, such an approach is entirely understandable.  But both Moore and, a couple of weeks earlier Lord Wallace, indicated that such a provisions would be unacceptable because the bill is ‘a package’.  So joint commencement seems out, though it has become a key minimum demand for Holyrood and the circumstances mean it’s an understandable one.

That means that either the bill as a whole will fall (which is what Michael Moore has said would happen if legislative consent weren’t forthcoming), or it is imposed on Holyrood despite its rejection there.  As I’ve argued HERE, the latter would seriously undermine devolution as a constitutional project.  The former would show that devolution is in fact incapable of evolving, though.

In taking this position, the UK ministers seem to have overplayed their hand.  It’s their bill, and one which the present Scottish Government and a majority in the Parliament don’t care for very much.  To gain their support, the UK needs to make its case that it is in fact in Scotland’s interests for the bill to go forward, and they’ve shown no eagerness to revise it to make that case.  The changes made to the Calman package in preparing the bill were clearly to its detriment; the changes made since introduction (the clauses relating to the UK Supreme Court) are seen in the same way.  However, the pressure is on London here, not Holyrood.  Failure of the bill would suggest that London is intransigent, that it doesn’t have the best interests of Scotland at heart (it certainly has failed to argue convincingly that it does), and that devolution is in fact incapable of developing to respond to changing circumstance.  In practice, looking to a referendum it would mean that the options for the future would come down to independence versus the status quo.  That is a very uncomfortable place for the unionist parties to be.

All this goes back to the ‘original sin’ of the Scotland bill; the fragmentation of constitutional debate that took place in the second half of 2007, between the start of the ‘National Conversation’ and the unveiling of the Calman Commission (see HERE for my detailed discussion of that).  The political assumption underlying the unionist parties’ position was that they would be able to bring their proposals into effect without the need for engaging the SNP in the process, it was a mistaken one – not just with hindsight (because of the May 2011 election), but at the time, because constitution-making has to proceed in different ways to ordinary politics, and runs into serious difficulties when it excludes one of the major parties in a political system.  The SNP has no stake in the Scotland bill because it was outside the process that produced it.

Where we are now means that any amendment of the bill would be an embarrassing highly visible climb-down – there’s no discreet way out of this situation.  But that is probably better for unionists than the alternative, of losing the bill entirely, with all that says about devolution as a project.

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12 Comments

Filed under Calman Commission/Scotland bill, Conservatives, Lib Dems, Scotland, SNP

12 responses to “Holyrood and the Scotland bill: the crunch looms

  1. Eminence Grise

    This is an interesting post, but misses one point.

    It may indeed be that the Scottish Government are looking for a basis to vote against the Scotland Bill, other than ‘not invented here’. And they may well use the absence of a detailed grant reduction formula as, at the least, a pretext, if not a reason.

    A grant reduction formula is very important, and it is in my view highly desirable for the UK Government to be clearer than it has been about it.

    But it is not in fact an essential requirement for the introduction of the tax powers. That is because the way in which the new system is to be phased in envisages a period during which the grant will be reduced by exactly as much as the tax brings in: in other words the Scottish Budget will be wholly insulated from the uncertainty in the Scottish tax base. So the total spend available if the tax were set at UK rates would be exactly what the Barnett formula provides.

    This is exactly the same as the position would be under the Scottish Variable Rate, as the Scottish Government will understand.

    It is not a position that should in my view be sustained indefinitely – because it gives the Scottish Government no revenue stake in the performance of the Scottish economy. But it is a sensible transitional position as it enables any uncertainty about what the tax base actually is (eg whether the HMRC list of Scottish taxpayers is wholly accurate) to be clarified without having any unwanted spending effects. It may also serve to ensure that the final transition is made at a time when there is more stability in the public finances, though who knows about that.

    What the UK Government appear to be saying is that they are happy to move to this interim stage and to undertake agree the terms of the move to the final stage (ie the grant reduction) with St Andrew’s House at a later date.

    That is a more nuanced position that one might assume from reading the blog or some of the press accounts. The cheque is not quite so blank as it has been made out to be.

    As for constitution making, Bismarck and sausages come to mind; but so does the Scottish Constitutional Convention, which the SNP eschewed.

  2. I have a different view and it is simply if the Scottish Parliament votes ‘no’ to this ludicrous and badly drafted bill with all its poisonous amendments from the unelected Lords derogating the independence of Scots Law – devolution and the Treaty of Union are, to all intents and purposes, dead in the water.

    Politically Westminster has painted itself into a corner because post May 2010 they thought Labour would be a shoe in to Holyrood in 2011 and this bill devised by Gordon Brown and Wendy Alexander would finally do what the original Scotland Act was supposed to do – kill the SNP stone dead.

    Westminster now faces a constitutional crisis of their own manufacture, they spent from 2007 to 2011 using their satraps in Holyrood to prevent a referendum on the issue of independence in the hopes this Scotland Act Amendment Bill would ensure it could never happen. Now to hide their own embarrassment they shout loud for a referendum and fast.

    Next, if we agree that Scots Law remains independent, there is a constitutional problem of where lies the people of Scotland’s sovereignty.

    In their smugness they allowed the Scots Parliamentarians to announce the temporarily suspended of the session of the sovereign Scots Parliament of March 1707 is resumed, in July 1999. In Scots Law the people of Scotland’s sovereignty is lent to the Scottish Parliament in the first and only instance, that Scotland is constitutionally a representative democracy and not a parliamentary democracy as conducted by Westminster. The people of Scotland’s sovereignty has been entrenched in Scots Law since 1328 and was reaffirmed in the 1689 ‘Claim of Right’ which is still ‘in law’ and protected for all time by the 1707 Treaty of Union. A point made clear by Lord Cooper in 1953 in the Court of Session and conceded on the UK Government’s behalf by the Lord Advocate.

    The crisis comes with an SNP majority at Holyrood who have better claim to represent the sovereign people of Scotland than the Scottish Office or Westminster. Donald Dewar attempted to square this circle with the ‘Sewel Convention’ which requires the Scottish Parliament to agree to any legislation by Westminster concerning Scotland. In this way it was hoped the real issue of Scottish sovereignty would not arise. This fudge could only work while the Westminster parties held sway at Holyrood.

    We are now at the constitutional point raised by Lord Forsyth in 1997 that if a majority of the members voted in the Scottish Parliament for independence, independence would happen as it would be the will of the sovereign people of Scotland. The majority, Dewar’s design of a mix of constituency and list votes was supposed to prevent.

    The SNP Government now have Westminster between a rock and a hard place as in effect the impact of the Scotland Act Amendment Bill, the Sewel Convention coupled with an SNP majority is that section 5 of the 1999 Scotland Act becomes unenforceable as it does not have the ‘nod’ of a supine Scottish Parliament and in any international arbitration Westminster has to concede that the Scottish people are sovereign in accordance with Scots Law, Scots constitutional practice and the 1707 Treaty of Union.

    The SNP can pick and choose which part of this new bill they dislike and the grounds for rejection. The worst Westminster can do is pull the fiscal plug which gives the SNP an easy win with a unilateral declaration of independence and an existing economy which will, GDP per capita, make Scotland the sixth richest country in Europe – just behind Norway but ahead of Sweden according to OECD analysis (UK currently stands 22nd).

    The question remains is Cameron and Westminster’s ego willing to kill the goose that is laying the golden eggs that keeps their heads above water or, in other words Cameron, punk, think and think carefully – is this your lucky day?

  3. Ted Harvey

    Eminence Grise provides a grisly example of the prevailing, contorted, Unionists’ perspective. In this perspective, everything is all cast in ways such as; Salmond picking a fight; the SNP being divisive; further significant devolution will bring the sky crashing down; or the juvenile behaviour of members of the Westminster Select Committee on Scottish Affairs dredging up the term of ‘Seperatists’ to describe the SNP (oooh scary… it’s like… divorce!).

    Eminence Grise’s typical example is to take a ludicrous position into which Westminster has painted itself (as well detailed by Peter Thomson’s comment) – and then to opine, in a faintly risible tone, that, “It may indeed be that the Scottish Government are looking for a basis to vote against the Scotland Bill, other than ‘not invented here’.

    Err… this farce had nothing to do with the Scottish Government; it was, like so much of the Unionist farrago, home-baked by mother Westminster.

    The Westminster-and-London-centric Unionist political class seems congenially incapable of entering into an informed and reasoned narrative on the possibilities for Scotland – both within the Union as, yes, beyond that.

    When asked about his use of the juvenile ‘Seperatists’ term when on the Committee’s recent foray into Scotland, a Scottish Labour MP member retorted that when he was first elected the SNP were calling his party ‘Unionists’, so they now had to take what they ‘dished out’. There you are; you call me a bad name and I’ll call you a bad name. How very Parliamentary! The meaning, moreover, of that retort must be truly obscure for the great majority of that MP’s Westminster colleagues.

    The outcome of Westminster’s buffoonery and canards is that a) they become increasingly less effective b) it is likely that they are now becoming counter-effective. Much of the Scottish electorate is concluding that Westminster’s language on Scotland seems to all be, variously; derogatory; menacing; fear-predicated; and almost invariably baseless.

    On that last point we had the cringe inducing performances of Mundell on BBC Scotland television and of that Lib Dem Alexander one, on BBC Radio Scotland – this followed Chancellor Osborne’s ‘warning’ that the Referendum was causing international companies to be unsure about investing in Scotland (that was, of course, the week after at least one announcement was made confirming a major incoming investment to Scotland ). Mundell and Alexander were completely unable to provide a shred of sustainable evidence to support this scare mongering – as indeed had Osborne.

    (Could a kind friend not explain to Mundell that sitting in a television studio and blatently, unblinkingly, unimaginatevely, refusing to answer a plain question repeatedly put is in itself an answer – but not a very good answer for the interviewee’s credibility?)

    This unrelenting Westminster negativity is all especially toxic for Scottish Labour. It’s engendering an increasingly corrosive image of a Westminster subsidiary doing its master’s bidding in Scotland – to the extent of decrying any development of true autonomy for Scotland.

    There are some Scottish MPs, such as Douglas Alexander, who perceive the growing danger. He has consistently urged Scottish MPs and Scottish Labour to adopt a more positive narrative about the Union, and a more conciliatory and constructive dialogue about what might be entailed in greater autonomy for Scotland. Against the likes of ‘she got a doing’ Scottish Labour MP Ian Davidson, we can only say that Douglas has a bit of a steep challenge.

    But even if the likes of Douglas Alexander succeed in all of that – what about ‘England’? Can the dialogue in that domain be moved beyond the purile nonsense of Subsidy Junky Jocks? I hae ma doots.

  4. @Peter Thomson – Thank you! the image of Alex Salmond as Dirty Harry has had me giggling all morning.

  5. Eminence Grise

    Ted Harvey seems to be a bit more thoughtful than many who blog on this subject, and he makes points worth considering. So let me gristle some more, even at the risk of opining.

    Scottish politics does seem to include a lot of name-calling, on both sides. Ted does quite a bit himself, which is a shame. Unionism or separatism may be unhelpful ways of characterising a discussion which is about how best to govern Scotland, and what its relationship with the rest of Britain ought to be. But they do illustrate one important aspect of that debate: should Scotland send MP’s to Westminster or not ?

    People can reasonably disagree about whether we should; but if we do, one set of consequences follow, and if not, another. It’s entirely fair for those who favour one option to point to the consequences of the other.

    So if you support independence, you have every right to say that staying in the UK limits Scotland’s autonomy and that’s a bad thing; if you don’t you are entitled to point to the downsides of it. One of the political tricks that the SNP has taken recently is to characterise any criticism of them as “negativity”: good politics, but in the end not helpful to a sensible constitutional debate.

    If you do not support independence in the traditional sense, a nation state recognised in international law with all that entails, as I suspect many in the SNP do not, then the question becomes what different relationship you want to construct with the rest of the UK.

    That’s not a unilateral process: the English have a say in it too. Their representative for that purpose is in practice the UK Government.

    As for the Scotland Bill, it represents a step – actually quite a big step, though to say so attracts abuse – in the direction of greater autonomy. It has the advantage that the UK Government agrees it. Not even those who devised it claimed it was the last word.

    In the end the SNP Ministers can reject it – even though they voted for it before. The point of my last post was to say that if they do, it won’t be for the presenting reason (relative detail on grant reduction formulae). Perhaps they hope to get a better deal, but I cannot escape the suspicion that if it was something they had negotiated for themselves they would regard it as progress to be welcomed while they pressed for more.

    But it’s a topsy-turvy world in which SNP politicians turn down additional powers, while their opponents call for a referendum. Thoughtful Scots might see that this tribalism is on both sides and is getting in the way.

  6. Ted Harvey

    Eminence Grise you’re not just grisly, you’re incorrigible, a right liitle opinionater ;-)

    I do still assert you are representative of a certain Unionist mindset. It’s not ‘good politics’ borne of the SNP to present anything against their case as negativity. Firstly, the negativity from the Unionist side is, as I said, unrelenting. It is a reality, not a piece of ‘good politics’, Secondly, the Unionists have long since practised the dark art of the negativity whereby persons articulating anything remotely in favour of independence, or even greater autonomy, was caricatured as the very Devil incarnate.

    There has been a many decades-long a ‘good politics’ practised on the part of Scottish Labour MPs , whereby this negativity blanket was extended over anyone (in Scotland) seeking to question just what kind of deal these MPs were brokering for Scotland in return for subservient clientellism (and considerable wealth accumulation on the part of those same MPs whilst they presiding over what remained constituencies with areas of some of the worse deprivation and poverty in Europe).

    On the point of tribalism – is this not a blight originating and cultivated by the Westminster system? A system to which the SNP was a very late entrant, and always a marginal one at that. If anyone has any doubt about the primeval tribalism of the Westminster system they need only to read the accounts of women trying to make their way in that system without resorting to the persona of some sort of chemically castrated macho male (remember Scottish Labour women MPs who relished being called something like ‘Stalin’s Granny’?).

    No, Eminence Grise, the overwhelming odour around all this negativity and tribalism is the baleful Westminster way.

    The Westminster way includes the latter invention of a supposed imperative that the ‘English’ must have a say – as you obligingly repeat. Well, as Mr Dalglish says, maybe ayes, maybe noes. Maybe at some point, but certainly not at the stage of a referendum. That referendum is entirely a matter for the Scottish electorate – and it should not be blighted by seconded, Scottish-based, MPs carrying out an essentially English perspective. An aside – if the little Englanders get their way and England… sorry the UK… has a referendum on EU membership, will the Unionists be consistent and demand the inclusion of the EU in what is set in the referendum and how it is conducted?

    If we are in a topsy turvy world, then that is the making of the Westminster system. 9Wea re of course in a topsy turvy world whereby the Westminster system includes and reveres in its House of Lords membership, convicted arsonsist, perjurers and otherwise demonstrated corrupt individuals.

    I sense that it is possible that after a referendum , or maybe it will take referenda, we reach the point of negotiated independence – and at that point the English will be utterly unprepared beyond negative and self-serving rhetoric (note how we have together and tellingly ignored the rest of the UK?). That scenario would be disastrous for all parties. As the interim, existing and determining, power the responsibility for that would lie with the Anglo Westminster system.

    • If I may butt into this discussion, I’d like to add a couple of ‘buts’. One is that we are where we are because of the shared insistence by the SNP and now the UK Government that there will be a single referendum on Scottish independence, not two. A two-referendums route (consultative referendum called by Holyrood; if a Yes vote, then negotiations about terms and practicalities of implications; second referendum to endorse that deal, called by Westminster) would create a clear basis for independence if that’s what the Scottish people wanted – its very clarity making it very hard for any UK efforts to undermine that. But ‘clarity’ itself – though a basic constitutional norm – seems to be becoming a dirty word. That is partly because it’s seen on the nationalist side as an attempt to rig the terms of the referendum, partly because the SNP’s pursuit of a referendum on dubious terms – two messily-worded questions, in particular – creates serious worries. While I can understand political reasons for the SNP pursuing the referendum in the way they have, they’ve made it hard to endorse the constitutionality of their position because of the problems about clarity. (The UK is not much better here, but it’s also been taken by surprise by all this while the SNP has been thinking about a referendum for years and the chief surprise has been its May election result.)

      It’s worth also saying something about the English. What the English collectively think is still unclear, but they’re entitled to some sort of say in what sort of union they want. That emphatically doesn’t mean a veto over Scottish independence, but I think it does mean that Scottish independence does need to satisfy Canadian style clarity requirements (a clear majority voting Yes on a clear referendum question) too. And, having asserted a right to self-determination for Scotland, Scots can’t subsequently object to English self-determination on constitutional matters either. The Union would be untenable if Scotland clearly decided to leave it; it would be equally untenable if the English decided they no longer wished to be part of a Union with Scotland.

  7. Eminence Grise

    Ted

    There’s hope for you yet !

    I wish it were so simple that all the ills of the political world – from tribalism to corruption and fire-raising amongst Edinburgh soft furnishings – can simply be laid at the door of ‘Westminster’ and can be cured by the cleansing waters of independence. If I thought that was true even I might support it.

    Of course Scotland could be independent, and if that was what the Scottish people wanted, the reality is that the rest of the UK could not and would not try to stop it. But if we don’t want that, but do want a different relationship within the UK, then they have to agree to it.

    “Stalin’s granny” by the way, was a nickname given to the General Secretary of Scottish Labour long before she became an MP.

    I don’t seek to defend bad behaviour by politicians – of which I have seen plenty – but it’s no justification for SNP Ministers to say that the other lot did it first.

    And last of all: surely the plural of referendum is referendums…

    …gerunds and all that.

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  10. Ted Harvey

    Alan et al what do you make of the latest farrago over referenda for Scottish Independence? I blogged this in resposne to the FT article on the matter last night:

    “So correct when Henry McLeish, a former Labour first minister who opposes independence, accused Mr Cameron of behaving opportunistically.

    He said: “The danger in David Cameron’s approach is that he polarises opinion between this rock of Unionism at Westminster and a hard place of independence.”

    This clumsy attempt at a gerrymandered referendum, steered at a distance from Downing Street, is typical of the clod-thumping ineptness that seems to mark the anti-independence Westminster Parties at every turn. I have heard nor read any reference to the Scottish Conservative Party or its Scottish Leader in all the Monday interviews with PM Cameron on the topic, or in the media reports (presumably part-briefed by the Conservative Party/UK Government).

    So the Scottish Conservative Party Leader is marginalised and belittled by her own UK Party Leader on what should e her ‘home ground’. Her counter-part predecessors in the Scottish Labour Party suffered, again and again, much the same treatment from their London overseers.

    ‘Union’ appears to be an especially inappropriate label to apply to these parties.”

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