Category Archives: Calman Commission/Scotland bill

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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Implementing Silk in Wales: an update

The UK Government has now published its proposals for the implementation of the Silk Commission’s Part 1 report, following its announcement at the beginning of November (and so managed to get its response in just before the anniversary of the publication of the Commission’s report).  The Wales Office’s news release is here and the paper itself, Empowerment and responsibility: devolving financial powers to Wales, is here. (Note for government documentation trainspotters: this isn’t a Command paper to be formally laid before Parliament, and certainly not a white paper or even green paper.  This contrasts with both Labour and Coalition responses to Calman, and again suggests either that the UK is not taking Wales as seriously as it did Scotland, or that this is a response framed in some haste.)

Unsurprisingly, the paper largely confirms the key elements of the deal announced by the UK Prime Minister and Deputy Prime Minister, previously discussed HERE: devolution of two small land taxes, devolution of 10 points of income tax, but only after a referendum.  It confirms that, as for Scotland, aggregates levy may be devolved, but only once outstanding EU state aids issues are resolved, and that air passenger duty will not be. Continue reading

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Wales’s new fiscal package: the UK Government response to Silk

Friday’s news had ample coverage of the UK Government’s decision about financing Welsh devolved government, following the Silk Commission’s Part 1 report from last November.  No doubt the looming anniversary of the publication of the Silk report triggered a certain sense of urgency.  Despite promises that the UK Government would produce its response in ‘the spring’ (and strong hints this would be earlier in the spring rather than later), that has been delayed and delayed.  At the end of June, Secretary of State David Jones said it had been postponed until after the summer, and now pretty late in the autumn it has finally materialised.

There has been wide coverage of the UK response.  The Western Mail’s article by David Cameron and Nick Clegg is here, and their news coverage is here, here and here.  BBC News coverage is here, and analysis here.  The Guardian’s story is here.  The official Wales Office press release is here, and the written ministerial statement is here.

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Implementing the Silk Commission’s proposals, and the Welsh block grant

This post also appears on the Institute of Welsh Affairs’ ‘Click on Wales’ blog under the title ‘Havering over Welsh taxation’, here.  I was on BBC Radio Wales’s ‘Sunday Supplement’ programme to talk about it at around 8.30 am on Sunday 21 July, available to listen again here or as a podcast here.

While the Silk Commission carries on work on Part 2 of its inquiry, the UK Government has been deliberating slowly on the Part 1 report.  Promises of an ‘early’ response vanished, as did the commitment to one in the ‘Spring’. The summer solstice came and went, with no response from the Secretary of State other than a note that ‘good, positive progress’ had been made, ‘many issues’ resolved, but some remained outstanding. The rumour mill abounds with explanations of what the unresolved issues might be (see, for example, David Cornock here and here). If what happens to the Welsh Government’s Block Grant is not one of them, it should be.

The approach for dealing with the reduction in the block grant recommended by the Silk Commission sounds comparatively straightforward in principle, though it is rather harder to apply in practice. In the first year the new arrangements are in operation, the block grant is cut by an amount corresponding to the yield of the devolved tax ‘space’ – 10 points of personal income tax in the case of Silk (and Calman/Scotland Act 2012) for Scotland.  That cut is then adjusted ‘proportionately’ in subsequent years. What ‘proportionately’ means here is not clear. The Holtham Commission did sterling work in identifying what that might mean in practical terms, recommending what it called the ‘indexed deduction’ approach for personal income tax.  The same approach applies in principle to other devolved taxes, but the yields of those are modest so the issue is not so vital there.

The ‘indexed deduction’ method would involve taking the Welsh proportion of the overall UK revenues from that tax, and reducing the block grant by that proportion.  So, if devolved income tax in Wales generates 1.75 per cent of total UK personal income tax revenues in year one, the reduction in the block grant would be 1.75 per cent of UK personal income tax in each subsequent year – whatever the change in overall UK personal income tax revenues. The amount of the deduction would go down if overall tax revenues went down, and be increased if revenues went up. The result would be that the Welsh Government would gain if its use of its powers increased tax revenues in Wales ahead of the UK as a whole, and lose out if they declined more than the UK as a whole.  This approach has been agreed between the UK and Scottish Governments for the working of the Scotland Act 2012, but work on what it means in practice is ongoing in the ‘Joint Exchequer Committee’ established by the two governments. There has still not been any published attempt to show what the impact of making the cut and adjusting it by that method would be.

Applying the ‘indexed deduction’ method is comparatively easy for Scotland. The Barnett formula means that the Scottish block grant is comparatively generous. One can argue about how generous it is, but it is clear that the Scottish Government’s block grant exceeds by some distance any reasonable estimate of Scottish relative needs. Holtham estimated Scottish needs at 104 or 105 per cent of English ones, but depending on how one cuts the numbers (which is tricky) Scotland gets around 118-120 per cent of English spending for services covered by the block grant.

A further quirk is that the public spending boom of the 2,000s should have led to quite rapid convergence in devolved spending on the ‘English’ level – but, for Scotland, it did not. It appears that Scotland’s declining population cancelled out the convergence effect in the block grant, since convergence relates to per capita levels of spending, while the block itself is calculated as a lump sum and updated population numbers only affect incremental changes to that. So if the application of the reduction in the block grant affects the overall resources available to Scotland, it will only eat into that ‘cushion’ of the Barnett bonus – and it will not make a difficult situation significantly worse as time goes by.

Wales would love to have Scotland’s problems. It is clear that Wales is somewhat ‘underfunded’ given its present relative needs. At present, the block grant provides 113 per cent of the English level of spending on devolved services – while Holtham found Wales’s relative needs were between 114 and 117 per cent. That creates a different set of difficulties. If the block grant fails to produce a ‘fair’ level of funding relative to need at the outset, any cut in that grant – however it is adjusted – will probably make matters worse, as convergence happens. As a result, it becomes very hard to reconcile devolved fiscal accountability with reasonable UK-wide equity in public spending.

Matters needs not necessarily get worse, if the grant were adjusted to compensate for unfairness in funding before any reduction is made to allow for devolved income tax. The demand for a ‘fair’, needs-based grant – as articulated by Holtham – would be the simplest and most effective way of doing that. But a needs-based grant looks to be pretty clearly off the cards at present. The effects of introducing that for Scotland, particularly in the run-up to the 2014 independence referendum, are frightening enough to send politicians running in the opposite direction.

By pursuing its bilateral discussions about the block grant with the UK Government – and excluding it from the Silk Commission’s remit – the Welsh Government minimised its influence over securing ‘fair funding’, as well as preventing the Silk Commission from taking a comprehensive view on Welsh devolved funding. What it got instead – the deal announced last October – was promise of some undefined action if convergence appeared to become a material issue, though it isn’t at present because of the restraints on public spending at Westminster.  (My discussion of that on Devolution Matters is HERE.)

How this would be resolved if or when convergence comes back on the agenda would involve a good deal of bargaining and haggling between the Treasury and Welsh Government, and a good deal of reliance on subjective assessments.  Although the Welsh Government seems to have a good deal of confidence in that deal, it is not so much a sticking plaster to help a broken leg, as a fig leaf.

Even then, a ‘fair’ grant would need an adjustment mechanism. You would need to be able to adjust the Welsh block (before the deduction for the share of devolved income tax) as spending changes in the reference point – so Wales gets a consequential change as spending on health or transport in England goes up (or down).  The simplest adjustment mechanism is that used for Barnett – allocating a population share of changes in spending on ‘comparable functions’ in England.  But any formula that works in that way will have a convergence element built into it.  So the problems caused by the Welsh block grant falling below Welsh relative need will not go away.

Indeed, it is made worse because the devolved tax power transfers a degree of volatility risk to the devolved level, while devolved public services are counter-cyclical or inflationary in their cost. A devolved government needs to know as accurately as it can how much money it will have for those services, and the starting point for that figure must deliver a comparable level of spending to that in England.  The more subjective the mechanism for adjusting the numbers, the less certainty and accuracy there is in the system.

Each of these problems is capable of being fixed. It would be quite possible to build into the mechanism for implementing Silk an adjustment to the block grant to avoid convergence, and another to cut the block grant to allow for partially devolved income tax. It would even be possible to establish a system that was also robust and predictable, and pretty stable, though HM Treasury would probably baulk at the loss of control over spending policy that would entail.

But the problem is that such mechanisms will need to be applied by the Treasury, and run on Treasury estimates which will necessarily have an element of subjective estimation built into them. By contrast, the day to day, year to year, operation of Barnett is pretty automatic and clear. The most serious problems arise when it is changed at a spending review.  So ironically, there is a real prospect that the overall effect of devolving income tax while making sure other changes do not damage Wales financially will increase the extent to which Welsh public spending depends on HM Treasury’s calculations, not reduce it. Ensuring a measure of fairness may mean less clarity about how financing works.

And that is the real problem.  The goal of the Silk recommendations is to increase the National Assembly and Welsh Government’s ‘fiscal accountability’. That means establishing clear lines between what is a devolved responsibility and what is a UK responsibility. There is little point in voters being able to hold the Assembly to account for increased (or reduced) income tax if there can then be arguments that this only happened because the Treasury has allowed it. That would not add to accountability. In fact, by creating scope for extra arguments between governments and blame-shifting, it would reduce it.

There are two points here that require further consideration. The first is that the detail of any response implementing Silk needs to be looked at carefully, to see how that mechanism will work.  Steering a course that delivers the benefits of Silk – in the form of increased autonomy and accountability – is difficult, and UK Government claims of success should be treated with scepticism given the difficulties of delivering these objectives.

Second, one has to ask how long the financial system for devolution can go on being amended and patched in this way. It is increasingly looking like one of Heath Robinson’s strange jerry-rigged machines, and increasingly incapable of actually doing what is demanded of it. These problems are much worse for Wales than for Scotland, but Scotland has them too. What look like bolder approaches – such as my proposals set out as part of the IPPR’s ‘Devo More’ project – in fact resolve them much more effectively, by trying to start with a clean slate rather than perpetuating the mess that has accumulated over decades. At some point, clarity and comprehensibility need to take priority over political or administrative convenience.

As part of that, the Treasury needs to be asked a hard question: why does the same framework for financing arrangements have to apply to Wales as to Scotland and Northern Ireland? While almost every part of the three sets of devolution arrangements varies a good deal, the Treasury has insisted on a measure of symmetricality in the block grant and the Barnett formula. It is rather a superficial form of symmetry, as when one digs down there are many substantial differences between each country’s arrangements. At present it is Wales alone that is underfunded relative to need by the block grant, and therefore only Wales that is exposed to the acute problems of convergence on an English level of public spending.  Symmetry causes problems for Wales in a way that it does not for Scotland or Northern Ireland.

In his recent speech at the Wales Governance Centre in Cardiff, Welsh Secretary David Jones lauded the virtues of ‘asymmetric devolution’. Asymmetry when it comes to the operation of financing would have a direct and tangible value for Wales.  It will be interesting to see whether that was merely an attempt to defend a messy status quo, or a preparatory step for an imaginative deal to make fiscal devolution for Wales work.

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Wither the Scotland bill?

The fate of the Scotland bill has been a recurrent theme on this blog (see HERE and HERE for some examples, or use the ‘Calman Commission/Scotland bill’ category in the sidebar at the right for a comprehensive listing).  The bill will start its Lords committee stage this coming Friday, during which I understand the practice is not to propose amendments, but only to discuss the bill.  (Amendments get proposed at report stage.)  However, although the Scotland Bill Committee has reported to the Scottish Parliament, there’s no sign of the legislative consent motion being tabled in plenary.

This absence is important.  Legislative consent needs to be affirmative; it can’t be presumed by its absence.  In the absence of an LCM, Holyrood can’t even vote to reject the bill – and its progress to the statute book is as stymied as if there were a clear motion opposing the bill.  (I’ve argued earlier, HERE, that respecting the Parliament’s power to block the bill is constitutionally fundamental.)

There is plenty of scope for negotiation about the bill, despite the long list of changes identified in the Scotland Bill Committee’s report.  Many of the changes named there – the demand for full fiscal autonomy, for example – are there to be negotiated away.  Given the recent comments of Linda Fabiani, the committee’s convenor, asking for the Secretary of State to propose changes, it seems that the SNP remains keen to see the bill pass, with appropriate changes.  It equally appears that Michael Moore is unwilling to enter that sort of debate – though, given the terms on which it’s now being held, it has become something of a dutch auction.  Moore’s self-imposed deadline of ‘the end of this parliamentary session’ (meaning May, or thereabouts) for passage of the bill adds to the pressure.  The pressure is, however, mostly on him.

As an aside, it’s worth noting the rather unusual intervention of the Lord President of the Court of Session in the debate about the bill’s provisions concerning criminal appeals to the UK Supreme Court.  There’s a press statement here, from which Lord Hamilton’s ‘written representations’ can be downloaded, and a news report here.  The Lord President emphasises his statutory authority (under the Constitutional Reform Act 2005) to make those.  The substance of his representations is to side with the review group chaired by Lord McCluskey set up by the Scottish Government, that the Court of Session should be able to certify cases which go to the UK Supreme Court on human rights grounds.  (See also news coverage here.)  The alternative to this is Advocate General’s position, reflected in the Scotland bill, that such cases should continue to go automatically to the UK Supreme Court as they are ‘devolution issues’.  Such an intervention adds further weight to the calls (from many in the law in Scotland, though not the Law Society of Scotland) to amend those provisions of the Scotland bill.

The question of whether the bill still serves any purpose is a valid one.  Regardless of how far the constitutional debates have moved since the bill was first introduced into Parliament (only 14 months ago), it still serves two purposes.  The first is as valid for anyone who wants to see ‘devolution max’ happen.  What the bill proposes in terms of fiscal devolution remains revolutionary in administrative terms.  Getting HM Customs & Excise to grapple with arrangements for collecting different rates of income tax is necessary not just to make the bill’s arrangements work, but as part of creating the machinery for any further fiscal devolution in future.   It’s a vital step along the path toward a fiscally decentralised UK.

Second, it’s clear that the people of Scotland want something more than devolution as enacted in 1998, and indeed more than the bill provides.  Heading into a referendum, the worst position for unionists to be in would be to argue that devolution can only mean what was enacted in 1998 and cannot change or develop.  If the bill fails to reach the statute book, that’s exactly the message that will sent to Scottish voters.  In that context, a defeat for the bill does not send the message ‘SNP oppose further powers for Scotland’, but ‘independence only meaningful alternative to status quo’.  That message will work electorally to the SNP’s benefit in the referendum, not the unionist parties’ – and of course the SNP will have no objection to letting the unionist parties score an own-goal if they wish.

UPDATE, 26 January: The list of marshalled amendments to the bill for Friday’s start of Lords committee stage as of 24 January is available here (though check here to see if this is the latest one).  There’s quite a range of amendments.  Lord Forsyth and Lord Foulkes both want  (different) referendums on the tax powers. Lord Foulkes also objects to them entirely, while Lord Forsyth is willing to devolve some smaller taxes including excise duty and air passenger duty, but on their existing basis.  (That would mean Holyrood could change the rates of tax but not what it’s charged on – so it’s a transfer of a source of revenue, but not a way of using tax as a lever to encourage or discourage particular sorts of behaviour.  And to devolve excise duty as Forsyth proposes would in fact mean establishing an internal trade barrier to the movement of alcoholic drinks, as you’d need to charge duty on the movement of alcoholic drinks across the England/Scotland border.)  Foulkes also proposes amendments to ensure the Scottish Government’s name is ‘the devolved Scottish Government’.  The Earl of Caithness wants  a referendum in Orkney and Shetland to allow them cease to be part of Scotland if there is a referendum on independence.  There’s also an independence referendum amendment, proposed by Lord Forsyth, Lord Lang and the Earl of Caithness.

Less dramatic but more practical are amendments by the Duke of Montrose to delete the clause preventing Holyrood legislating in relation to Antarctica.

Most interesting in practical terms are the amendments relating to legal provisions and the courts.  There are also some detailed amendments relating to the legal system from Lords Boyd of Duncansby and Lord Browne of Ladyton (more familiar as Colin Boyd QC, former Lord Advocate , and Des Browne, former Secretary of State for Scotland).  Theirs include deleting clause 7, allowing referral of particular clauses of bills to the UK Supreme Court (a good amendment to address a bad clause).  There are amendments from both Lord Wallace and Lord McCluskey to give effect to their different position about human rights-based appeals to the Supreme Court, and the question of certification.

Lords Committee stage (and report stage) are going to be messy, protracted affairs.  This just reinforces the point I made above – that time pressure to complete it progress through WEstminster, as well to secure Holyrood’s legislative consent, means that this bill is in fact very likely just to die.  The only way to save it will be for the Scotland Office to remove Michael Moore’s self-imposed block on carrying it over to the next session.

FURTHER UPDATE, 27 January: Some further supplementary amendments can be found here.  The most notable is Lord Foulkes’s probing amendment concerning fiscal autonomy.

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Devolving air passenger duty, or not

One of the important decisions that came out with the UK Government’s Autumn Statement relates to the devolution of air passenger duty (APD).  The debate about devolving APD has now been going on for some time.  The Calman Commission recommended its devolution in unequivocal terms, along with stamp duty land tax and some smaller land taxes, noting that these

tax items which are less mobile, and so are unlikely to cause significant economic distortions.  These also provide useful additional fiscal levers to the Scottish Parliament … [A]llowing a Scottish rate of such taxes would offer a better match of policy instruments to the existing powers whilst not necessarily creating economic inefficiencies. (Executive summary, para. 27; Consultation Response – Evidence from the Independent Expert Group: Summary and Conclusions, para. 5)

 The Labour UK Government didn’t agree.  In the 2009 white paper Scotland’s Future in the United Kingdom, Cm 7738, it said:

 The Government’s assessment is that state aid rules, competition considerations and international aviation agreements restrict its ability to devolve air passenger duty. The Government does not therefore attach priority to the implementation of this recommendation although it will keep the position under review. (para .4.22)

The Coalition took a different view.  The 2010 Command paper Strengthening Scotland’s Future, Cm 7973, said:

On air passenger duty, the Government is considering the wider future of aviation duty, and it would not be practical to devolve this duty while these considerations are ongoing. The Government will consider devolution as part of the ongoing work on aviation taxation. (p. 13)

That consultation related to the Lib Dems’ favoured idea of moving to charging APD per plane, not per seat – so encouraging airlines to fill all seats on a plane, and reducing emissions per Continue reading

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Holyrood’s Scotland Bill Committee publishes its report

The Scotland Bill Committee at Holyrood has just published its report.  The report, in two volumes is available here; the Parliament’s press release about it is here. There’s a BBC News report here.

The report is not a straightforward one to summarise, and I haven’t read it properly myself yet. Broadly, there’s cross-party agreement that the bill needs extensive amendment before the Parliament can give it legislative consent, notably on constitutional issues.  A majority (SNP members, with Green support) also oppose the income tax provisions as they stand, have sought full fiscal autonomy and devolution of welfare benefits (for which the bill is a wholly unsuitable vehicle), and much greater control over HM Revenue & Customs including a separate ‘Scottish department’ within HMRC.  The SNP and Green members also want ‘joint approval’ of the introduction in practice of the income tax power, to ensure that UK does not abuse the blank cheque a straightforward approval would otherwise give them.  This last is likely to be the most explosive point for the UK Government, which has signalled that this is emphatically not on offer.

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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.

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Scottish independence referendum developments

The last couple of weeks have seen spats about Matt Qvortrup’s views on an independence referendum and its use by the Scottish Government and about Aidan O’Neill’s doubts about the legal competence of an independence referendum (most fully set out here; there’s also a report from the Daily Telegraph here).  Sir David/Lord Steel’s concerns have also had an airing (reported in Scotland on Sunday here).  Now, there’s a broadside from Adam Tomkins, John Millar Professor of Law at Glasgow University and a legal adviser to the Lords Constitution Committee.

This comes in the form of Tomkins’s evidence to the Commons Scottish Affairs Committee’s inquiry on a ‘referendum on separation for Scotland’, reported in today’s Scotsman here.  (The inquiry was previously discussed HERE).  Tomkins is highly doubtful about Holyrood’s power to call any referendum on independence, certainly one involving multiple options or a question targeted directly at independence.  He takes the view that the powers of the Scottish Parliament and Government are limited to ‘devolved matters’.  I find that unconvincing to an extent, as there are no ‘devolved matters’ when it comes to the Parliament’s powers – there are reserved and non-reserved ones. While ‘the Union of the Kingdoms of Scotland and England’ is a reserved matter, questions about issues related to negotiations to change that would seem to be within competence (hence the legal merit of the ‘two referendums’ approach).

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The Scottish Lib Dems’ ‘home rule commission’

Sir Menzies Campbell has been announced as the chair of the Scottish Liberal Democrats’ home rule commission, first announced by Willie Rennie in September at the UK Lib Dem conference in Birmingham.  There still aren’t many details about the commission, particularly its terms of reference or composition (other than Sir Ming).  About all we know is that Rennie says it is to ‘set out our vision for a strong Scotland within the UK and for strong, powerful communities in every part of Scotland’.  That suggests it will be concerned not just with Scotland-UK issues, but also local government ones.

There’s coverage from BBC News here and the Scotsman here. The Scottish Lib Dems’ own news release is here.

This is hardly unexplored ground for the Lib Dems.  Indeed, that’s both part of the problem for this commission, and part of the reason for it.  Back in 2006, the Lib Dems were the only one of the unionist parties in Scotland willing to think about constitutional matters.  The Steel Commission  came up with a blueprint for extremely far-reaching devolution, so much so that it was used by the SNP as the basis for the ‘full devolution’ model sketched in the November 2009 white paper Your Scotland, Your Voice.  In effect, the Lib Dems wrote the SNP’s version of Devolution Max.  That in turn has made it very hard for the Lib Dems to challenge the SNP on constitutional matters, as every time they do they have their earlier position thrown back at them. That knot has been compounded by the insistence of Lib Dems in the UK Coalition as being effectively unchangeable.  I’ve heard quite senior Lib Dem figures confirm with equal vigour and in the space of five minutes that the party is committed to the Steel Commission, to the Calman recommendations/Scotland bill in its current form, and to a federal United Kingdom.  They showed no awareness of how contradictory these positions were.

The new commission has got to avoid making the mistake the Steel Commission did.  That was to come up with a scheme for very extensive devolution within the Union, without having any good rationale for why there should be a Union or what it should do.  The UK level, in the Steel Commission’s schema, was largely a residuum of things that either couldn’t be devolved without clearly breaking up the Union (such as defence or foreign affairs), or which it just considered were too cumbersome to handle.  To be convincing, any unionist argument has got to include a positive rationale for the continuation of the Union, not just convenience.

UPDATE: I shall be talking about this on The Politics Show Scotland on Sunday 6 November: 12 noon, BBC 1 Scotland (though I think the ‘Scottish’ bit starts at 12.45), 3 pm on the BBC Parliament channel, or via the iPlayer.

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