Author Archives: Alan Trench

About Alan Trench

Academic, non-practising solicitor, close watcher of devolution in the United Kingdom and similar systems around the world

Lecture in Belfast on what happens after the Scottish referendum

I’m giving a public lecture at the University of Ulster’s Belfast campus on 15 May, on what happens following September’s Scottish referendum.  It will take place in the Conor Lecture Theatre at 5 pm.  The poster, with more details, can be downloaded here.  Please email Zoë Lennon on z.lennon@ulster.ac.uk to confirm your attendance if you’d like to come.

 

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Filed under Events, Implications of Scottish independence, Referendums, Scotland, Scottish independence

Unlocking the lockstep?

There are interesting changes to the ‘Calman’ model of income tax in the Wales bill (which had its Commons second reading on Monday) and the Finance bill (which had its Commons second reading on Tuesday).

The ‘Calman’ model applies a ‘lockstep’ to the devolved income tax rate, which has to be the same for all three tax bands (basic, higher and additional or 45 per cent). That rate can be 0 per cent, 10 per cent (as it is at present) or some other figure but it must be the same for all three bands – so if the devolved rate were nine per cent, you would have tax rates of 19, 39 and 44 per cent. While this question did not attract particular attention when the Scotland Act 2012 was going through the UK and Scottish Parliaments, it has been controversial in Wales. It was not recommended by either the Holtham or Silk Commissions, and has attracted criticism from the Commons Welsh Affairs Committee, the First Minister (who called the power with the lockstep ‘pretty useless’) and the Plaid Cymru and Welsh Conservative leaders.

The provisions in the Wales bill mark a change from the draft bill published before Christmas. Instead of providing for a single ‘Welsh rate of income tax’ across all three bands, the key operational clause now provides for Welsh basic, higher and additional rates and defines each of them separately (see clause 9 of the bill). Clause 289 and Schedule 34 of the Finance (No 2) bill make similar changes to the finance provisions of the Scotland Act 2012. (Both bills also provide for beefed-up arrangements for reports on devolved tax powers by the Comptroller and Auditor General, something that was conspicuously missing from the Scotland bill.)

The substantive policy behind the devolved rate of tax remains the same; the lockstep is still in place, and UK Government policy backs it strongly. But this change creates the legal basis for having different rates of tax for each band, if that policy decision were taken later, by altering the rule regarding what a ‘Welsh’ (or ‘Scottish’) ‘rate resolution’ would be.

The application to Scotland appears to be an inversion of the position that ‘Wales gets what Scotland gets’, which is apparent throughout the finance provisions of the Wales bill. Since what Scotland has is proving politically very difficult in a Welsh context, creating a framework for a possible different approach is an interesting move. In the light of ongoing debates about fiscal devolution to Scotland, though, including the Scottish Labour Party’s proposals to increase the devolved rate of income tax from 10 to 15 points and to allow the Scottish Parliament to vary higher and additional rates upward, there are obvious potential uses on the table in Scotland as well.

UPDATE: There’s coverage of this issue – quoting me extensively – here, which appeared on the front page of Wednesday’s Scotsman, and a cartoon and comment, here.  It’s interesting to note a firm denial of the idea that there is any plan to break the lockstep from HM Treasury, reported in the Scotsman story.  Ben Riley-Smith of the Telegraph has also tweeted a denial from No. 10.  I don’t doubt the policy remains to maintain the lockstep, but also that this creates a smoother path to break it if the policy were to change.

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Filed under Calman Commission/Scotland bill, Devolution finance, Legislation, Scotland, Wales

Devo More and Welfare

Our paper on devolving welfare, snappily entitled Devo More and Welfare, is now available on the IPPR website here.

Our concern in making these proposals has been to formulate workable proposals which preserve important parts of the UK and its ‘social union’ as it presently is. There’s a lot of material in the paper discussing this, and why risk-sharing at a UK level is in the interests of all parts of the UK.  Constraints also arise from the existing pattern of welfare spending and the structures that support that – the role of the National Insurance fund when it comes to contributory benefits, for example.  However, we think it would be wrong to treat that social union as rigid; sharing risks for big things like old age or unemployment doesn’t mean other things can’t and shouldn’t be changed.  We argue for recognition of the role of devolved governments when it comes to providing welfare benefits, bearing in mind the large role they already play in providing public services that are part of the welfare state – an approach we call ‘welfare pluralism’.

We endorse, broadly, changes in three areas.  First, housing benefit should be devolved, given how closely it is linked to the devolved function of social housing. This would enable devolved governments to improve housing policy, by joining up housing benefit with already-devolved functions, and giving them more flexibility in how they invest in providing social housing.

Second, we support devolution of functions where this will improve social investment.  This applies to two areas in particular: the Work Programme and welfare-to-work, and childcare.  Devolving the Work Programme would involve a form of executive devolution, with Job Seekers Allowance and Employment Support Allowance remaining paid on a UK-wide basis. Childcare powers are already in devolved hands; the question is how that should be funded, and here fiscal devolution (as we recommended in Funding Devo More) addresses the problem.  Devolving the childcare element of the Working Tax Credit would support this.

Third, we support a power for devolved governments to supplement UK level welfare, and removing existing legal restrictions on devolved governments providing cash benefits, provided they do so within devolved resources.  This would certainly simplify action like that taken by the Scottish Parliament to redress the ‘bedroom tax’/spare room subsidy, and would enable a much wider range of possibilities for devolved governments that wished to undertake them.

Welfare devolution should not simply be about handing over more powers to devolved governments.  It is about improving how devolution works, but even more importantly about improving social outcomes across the UK.  This can produce benefits for all; it is about a win-win game not ‘making concessions’.  It is also for all devolved governments; what we propose would be as applicable in Wales and Northern Ireland as in Scotland.  It is also, importantly, about responsibility; in particular, we argue that fiscal devolution is a necessary prerequisite before devolution of welfare functions can take place.

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Filed under Policy issues, Publications and projects

‘Devo More and Welfare’ in ‘Scotland on Sunday’

The paper Guy Lodge and I have written on Devo More and Welfare as part of the wider Devo More project is published on Tuesday.   There’s extensive coverage of it in today’s Scotland on Sunday to whom we’ve given a preview of the paper, including a news article here and a comment piece by Guy and me here.

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Filed under Northern Ireland, Policy issues, Publications and projects, Scotland, Wales

The Silk Commission’s Part 2 report

If ever a report deserved careful consideration rather than an immediate response, it’s the Silk Commission’s Part 2 report.  The product of more than 15 months’ evidence-taking and deliberation, it is a carefully framed, principles-based blueprint for the next step for Welsh devolution.  The full report is available here, and the executive summary (which I must admit to having relied on for this post) is here.  There’s BBC News coverage here, here and here, and from Wales Online here.

The key recommendations are:

  1. devolution of policing to the National Assembly
  2. devolution of responsibility for youth justice, but not the courts or the legal system generally
  3. devolution of planning powers to approve energy projects of up to 350 megawatts, of powers relating to sewerage and the regulation of some aspects of water supply within Wales, and for there to be a Welsh Crown Estate Commissioner.
  4. some further devolution of powers in relation to rail franchising, bus and taxi regulation, and speed limits and drink-driving
  5. appointment of a Welsh member of the BBC Trust (something already in place for Scotland), and control for the Assembly over public funding for S4C
  6. an increase in the size of the National Assembly, noting many calls for 80 members but leaving the issue for further consideration
  7. an enhanced approach to the conduct of intergovernmental relations and the machinery for that. The Secretary of State for Wales would also lose his seat in the National Assembly, his right to receive its papers and obligation to present the UK Government’s legislative programme each Parliamentary session.
  8. perhaps most importantly, a move to a ‘reserved powers’ model for the National Assembly’s legislative powers, away from the current ‘conferred powers’ one, along with a removal of the current and problematic protection of pre-devolution powers of UK ministers.

There are also calls for further study of a number of matters – not just the size of the Assembly and the number of AMs, but also the possible devolution of prisons and the court system.  It sees no need for a further referendum on any of these proposals.

What is notable about this is how cautious it is.  The recommendations eschew a number of more radical calls – for the establishment of a separate legal jurisdiction, or for devolution of the civil or criminal courts, the civil or criminal law, or of welfare.  I argued in my own submission that it would be very hard to establish a ‘reserved powers’ model without establishing a separate legal jurisdiction, and that this could be done without losing many of the advantages of the current shared arrangement.  (See also THIS EARLIER POST on the relationship between a legal jurisdiction and legislative powers.)   I suggested as well that the Welsh Government’s proposals for a reserved powers model would imply a devolved power to legislate for areas like land or contract law (these are omitted from the Welsh Government’s proposed list of reserved matters).  This would achieve the substantive outcome of a separate legal jurisdiction without formally calling it such –which may be the worst of all worlds.

Welfare devolution is another area which would create a number of administrative problems but offers scope for major gains for both governments and for citizens – as we’ll be arguing shortly through the Devo More project.

The Silk proposals are, in essence, an attempt to make sure the division of powers between Welsh and UK institution catches up with reality.  They’re not actually very radical; they don’t take account, for example, of the impact of the September referendum on Scottish independence (whether there’s a Yes vote leading to Scottish independence and a restructuring of the remainder of the United Kingdom, or a No vote resulting in further devolution for Scotland).  Rather like Holtham before it, this is an exercise in bringing Welsh devolution up to date not making far-reaching plans for the future.

However, the proposals do represent a clear consensus across the Welsh political parties about what should happen next.  I’ll shortly be putting up a post about the problems arising from the way the UK Government approached Silk Part 1, and its profound misreading of the political and economic situation in Wales compared with Scotland.  The gravest mistake the UK Government could make would be to cherry-pick these proposals.  The second gravest would be to take a year to decide what to do, especially given that it has a legislative slot in the next Parliamentary session and not using that would mean a significant wait for any action – even though, from his initial reaction (saying a response would be for the next UK Parliament not the current one), that’s just what the Secretary of State seems to intend.

UPDATE, 4 March: Carwyn Jones’s response to the Silk Part 2 report, here, is interesting.  Although Jones calls for a substantial expansion of the powers of the National Assembly and Welsh Government, he appears unwilling to accept the logical implication that greater self-government means no longer being in a privileged position when it comes to UK-wide institutions.  He seeks to maintain the office of the Secretary of State (despite his well-publicised difficulties with both Conservative holders of that post), and the present number of Welsh MPs.  Both cases are poor. For a discussion of the Secretary of State, see HERE.  The latter case is if anything weaker.  Wales is presently over-represented at Westminster; if MPs were allocated to Wales on a similar basis to England, it would have around 32, not its present 40.  Scotland was similarly over-represented in the Commons before devolution, and the creation of the Scottish Parliament saw the number of Scottish MPs reduced to the English ‘quota’.  That meant a reduction from 72 to 59.  This was provided for in the Scotland Act 1998, and (to avoid  a reduction in the size of the Scottish Parliament as well) required further legislation to ‘decouple’ the number of MSPs from the number of MPs.  (Decoupling has already happened for Wales, as part of the abortive plans to reduce the size of the Commons.)

Wales cannot expect to maintain a privileged position at UK level if devolved powers are to be extended.  Carwyn Jones is trying to have his cake and east it.

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Filed under Courts and legal issues, Wales, Westminster, Whitehall

The UK Government’s increasingly clear referendum position

The UK Government has now taken to using publicly a clear line about the independence referendum.  A Yes vote, and Scottish independence, will lead to Scotland leaving the United Kingdom (despite semantic objections from the Yes side).  That means an independent Scotland will also cease to be part of UK institutions.  It can’t expect to be able to maintain participation in such bodies as the Bank of England (as emphasised by the row over currency union), the BBC (illustrated by Maria Miller’s comments in Oxford), and others. The European Union is another of these.  Lord Wallace’s impending speech makes the point vividly clear.  Expect to see the research councils added to the list over the coming weeks, as another body where an ‘independent’ Scotland would seek to share arrangements with rUK.  There may be some hard choices to be made about a common travel area and its security implications.  The ground for both of those has already been laid in the Scotland Analysis papers.  And expect arguments about such detailed matters as the organ transplant ‘pool’, which currently operates on a UK-wide basis.

None of this should be a surprise.  It’s been implicit in the UK Government’s position since the beginning of the Scotland Analysis programme.  Remember that that kicked off with an analysis of the international legal issues, concluding that (r)UK would be the successor state in international law and Scotland would be a new state.  The line of argument now emerging is simply the logical fulfilment of that.

This is also perfectly consistent with the strategy of the Unionist side in another respect.  Since the May 2011 Scottish election result, and David Cameron’s prompt acceptance of the need for referendum and stipulation that it be ‘legal, clear and decisive’, the UK Government has pursued an excluded-middle Continue reading

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Filed under Referendums, Scotland, Scottish independence, SNP

Nicola Sturgeon at UCL: the positive, England-friendly case for independence, and laying down a challenge on Devo More

Nicola Sturgeon’s lecture for the Constitution Unit on Thursday evening, 13 February, was a rare opportunity for her to speak to a London audience, and for a London audience to see her.  What they heard was a very slick presentation of the SNP’s case for ‘soft independence’, carefully tailored for the audience, and predicated on advancing Scottish self-government rather than breaking up the UK.  Her key arguments were that Scotland could be independent, and was well-prepared for that because of the development of devolution; that Scotland could and should become independent, because Westminster’s politics and policies were at odds with those of Scotland; and that independence would be a firm basis for good relations with all the nations of the British isles.  She emphasised that Scottish independence was ‘emphatically not separatist or insular … [n]or … driven by antipathy towards or resentment of our neighbours in the rest of the UK.’  Indeed, she said she was sure independence could be achieved without any lingering sense of resentment in the rest of the UK. She added that the debate was not about ‘identity’ and that the SNP were not asking people to choose their identity as part of the process which may come as a surprise to some observers).  Rather, it was about the best form of self-government for Scotland.

Much of this was familiar to those who have heard the SNP in recent years, and much could be strongly contested.  The line that Scotland’s politics were different to those of England was undermined by arguing that Scottish independence would not doom the rest of the UK to unending Conservative governments, for example.  Sturgeon made a good deal of how important it was for Scotland to have control of such issues as economic management, defence and foreign affairs from Westminster – even though an independent Scotland’s room for manoeuvre under its white paper blueprint would be limited, and even though there is little sign from polling that these issues are key in voters’ minds. Continue reading

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Filed under Events, Scotland, Scottish independence, SNP

Scottish independence: does taking a sterling currency union off the table change the game?

The heavy trailing of an announcement by the Chancellor of the Exchequer (and Danny Alexander and Ed Balls) that the UK Government is not prepared to establish a currency union with Scotland for use of the pound in the event of Scottish independence (see also BBC News coverage here) is a serious blow to aspirations of the SNP for a form of ‘independence lite’.  The logic of this was that it would avoid disrupting many key symbolic and economic ties between an independent Scotland (iScotland) and the remainder of the UK (rUK), so comforting swing voters about the limited scale of the risks of independence.  Those risks are real; think of how attractive Scottish investment trusts and insurance companies look if the complexities and exchange-rate risks of using a different currency are introduced into the equation, for example.  But this shift in the ground also emphasises a number of key issues about the implications of a Yes vote, and what would happen after it.

The first problem – which is particularly the case with the idea of a currency union, but applies to many other important issues – is the asymmetry of interest.  A currency union is central to the way the SNP has formulated its model for independence.  (That view can be contested, of course – whether by the likes of Jim Sillars on, essentially, autonomy grounds, or by Angus Armstrong and Monique Ebell on economic ones, relating to the flexibility of economic policy instruments and the implications of a debt burden.)  But it is of marginal interest or benefit to rUK at best, poses a serious risk at worst, and concluding that the risks of it from an rUK point of view exceed the benefits is a reasonable judgement to come to.  This isn’t the only issue where iScotland has a strong interest in something of limited concern to rUK, either.  In bargaining situations, iScotland has got to have something convincing to offer to rUK – and other than staying in the UK, or the Clyde nuclear bases, it’s hard to see what that might be. Continue reading

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Filed under Scotland, Scottish independence, SNP

‘The Staggers’ post on income tax devolution and Scottish Labour

Guy Lodge and I had a post in the New Statesman’s politics blog, The Staggers, on Friday about income tax devolution in Scotland. 

Since this went up, there has been further coverage of the story.  John McTernan came up with a rather doubtful proposal in Friday’s Scotsman – calling for substantial welfare devolution (including key UK-wide redistributive benefits like Job Seeker’s Allowance), but no fiscal devolution.  Saturday’s Guardian leader highlighted the importance of a ‘proposition that goes beyond the status quo’ from the unionist parties as part of their campaign in the Scottish independence referendum.   Scotland on Sunday’s coverage includes the front-page lead, a detailed analysis piece, and a leader Unsurprisingly, Alex Salmond is making the most of Labour’s disarray. 

The Staggers post can be found here, and the text is also below. 

Labour must not retreat from further devolution to Scotland

Those concerned about the survival of the Union would do well to turn their attention away from David Cameron’s “seven months to save the UK” speech and look instead at developments taking place in the Scottish Labour Party. Worryingly, just at the moment when the Yes camp appear to be gaining some momentum in the polls, Scottish Labour appears to be retreating from providing Scottish voters with a clear alternative to independence in the form of additional powers for the Scottish Parliament. Continue reading

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Filed under Labour, Referendums, Scotland, Scottish independence

After a Scottish independence referendum Yes vote

There has been remarkably little public discussion of what would happen if there were a Yes vote in the Scottish independence referendum.  The widespread assumption seems to be that negotiations would be swift and straightforward, and Scotland would readily become an independent state.  The Scottish Government’s position (previously set out in the February 2013 paper Scotland’s Future: from the Referendum to Independence and a Written Constitution, but repeated in the independence white paper) remains that May 2016 would be when Scotland would become independent.  That is a very simplistic approach; negotiations would be complex, possibly protracted, and gravely complicated by the May 2015 UK general election.  Considerations about timing, and the impact of the referendum vote would affect the strength of the various negotiating positions, as well.

Nick Barber of Oxford University has now written an exceptionally good post about the implications of Yes vote.  I don’t wholly agree with it, but it should be read by anyone thinking seriously about these issues.  It can be found on the UK Constitutional Law Association’s blog, here.

In a separate but related development, the Lords Constitution Committee at Westminster has announced an inquiry into the implications of a Yes vote.  There’s news coverage from the BBC here, and details of the inquiry and its call for evidence here.  The closing date for submissions is 28 February 2014.

UPDATE, 27 January: There’s also a Lords debate on Thursday about ‘The implications for the UK of the forthcoming Scottish independence referendum’.  Details are here.

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Filed under Implications of Scottish independence, Referendums, Scotland, Scottish independence, SNP, UK elections, Westminster, Whitehall