Category Archives: Scotland

‘Constitutional Futures’ workshop at Queen’s University Belfast, 10 October

Along with James Mitchell from Edinburgh and Aileen McHarg from Strathclyde, I’ll be taking part in a workshop on ‘The Direction(s) of Devolution’ in the law school at Queen’s University Belfast on Friday 10 October.  There is more information here, or the flyer can be downloaded here.  Capacity is limited; please email law-enquiries@qub.ac.uk if you’d like to attend.

 

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SNP, sorry: the referendum result takes Devo Max off the table

The clear and decisive vote in the Scottish independence referendum is a powerful statement in a number of ways. There is clearly a large constitutional and political debate now underway, for the whole of the UK and each of its parts and not just Scotland.

But aspirations that this means ‘devo max’ – the devolution of all functions save defence, foreign affairs, currency and maybe immigration, and including the power to set and collect all taxes in Scotland – are simply wrong.  Devo max in that form is definitely off the cards. It has never been offered or proposed by any of the pro-Union parties. The enhanced-devolution schemes they have, to be brokered now through the process chaired by Lord Smith of Kelvin, are all substantial further devolutions of power, but not ‘devo max’.

In his concession speech, Alex Salmond committed to work with other parties in Scotland, and the rest of the UK, to deliver further powers for the Scottish Parliament. The Scottish Government of course undertook to ‘continue to work together [with the UK Government] constructively in the light of the outcome, whatever it
is, in the best interests of the people of Scotland and of the rest of the United Kingdom’, in the much-discussed Article 30 of the Edinburgh Agreement.  For the Scottish Government to be an active participant in that process, it and its supporters need to acknowledge that devo max is also now off the table. The referendum was a clear signal by the people of Scotland that they wanted to remain part of the United Kingdom. Far-reaching further devolution is perfectly compatible with that, more so with the wide-ranging approach to constitutional reform that the Prime Minister has signalled. But – as I made clear in my evidence to Holyrood’s Finance Committee in June – full fiscal autonomy and devo max are not. It has nothing to offer Wales or Northern Ireland, and would be unworkable for them. More seriously, the extensive, de facto withdrawal from most aspects of a shared economy and shared social citizenship that devo max would imply is not workable for other parts of the UK. Those remain key tangible manifestations of remaining part of the UK. By rejecting full-fat independence, Scotland’s voters also opted to decline its skimmed version that is devo max.

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Devo Max and Devo More

There are two myths going around about what happens following a No vote in the Scottish referendum.

First, it’s said that plans for ‘more devolution’ are unclear. They are not. The three pro-UK parties have different schemes for them, it’s true, but there is a substantial degree of common ground between them. All involve devolution of most or all of personal income tax to the Scottish Parliament. Labour and Conservatives both support forms of welfare devolution, which – among other things – would have enabled Scotland to opt out of the Housing Benefit change that led to the ‘bedroom tax’. The differences do need to be resolved, but there is also a clear route for that, endorsed by the UK Prime Minister in his Aberdeen speech as well as other party leaders: an early process of cross-party negotiations, leading to a white paper by November 2014, publication of draft legislation in early 2015, followed by incorporation into manifestoes for the May 2015 general election, which will give the mandate for delivery of them.  That level of political commitment is not easily ducked – and ironically it is perhaps the Conservatives who have the greatest short-term political interest in securing their delivery.

It’s also untrue that these are last-minute proposals All these schemes have drawn on the work I have done with IPPR, and particularly Guy Lodge, through the Devo More project since late 2012. They reflect many months of work and careful analysis of the implications of further devolution, not just for Scotland but for other parts of the UK as well – they haven’t been suddenly ‘pulled out of a hat’.

Details of the key publications from Devo More can be found here, here and here (and there are posts about the financing paper here, the welfare one here and how the programme fits various political traditions here).

Second, it’s suggested that these proposals amount to ‘Devo max’. They don’t. This is usually a rather lazy shorthand from journalists or politicians who haven’t understood what is actually on the table. The extra-devolution schemes, or scheme, will substantially enhance the autonomy of a devolved Scotland within the UK. But the Scottish Parliament is already responsible for about 70 per cent of all public spending in Scotland. The Devo More proposals will take Scotland as close to home rule as is possible in a single state.  They will deliver what Scots had clearly shown they’ve wanted for a decade or more – greater self-government in the Union – in a way that works with the interests of people in other parts of the UK, rather than against them.

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What follows the referendum: the process of negotiating Scottish independence, or of delivering Devo More

Back in May, I gave a lecture at the University of Ulster’s Belfast campus about what might follow the vote in the Scottish referendum. I’m afraid I’ve only now had the chance to tidy that up for wider reading. It’s available on the Social Science Research Network here, or can be downloaded directly HERE. The lecture as a whole is somewhat lengthy (around 10,000 words), so this post picks out the key points.

Perhaps the most important and novel part of the lecture is the second one, where I map out what would follow a Yes vote – the sort of steps needed, particularly on the rUK side to tackle the many uncertainties that will follow. This is a separate issue from that of the strengths of each party in the negotiation, discussed HERE earlier in the week.  This would call for a great deal of imaginative thinking, in the midst of a first-order constitutional crisis. In particular, it seems to me that:

  • The negotiating process needs to move with all due speed, to preserve the democratic legitimacy of both rUK as well as an independent Scotland. There is no good reason for rUK to seek to prolong the process, and plenty of reasons for it not to.
  • The 2015 UK General election presents grave problems for that – the time lost to campaigning in an election and briefing a possible incoming new government means it will be impossible to make a proper start in negotiations before June 2015, since even provisional agreements reached under the present government might lack support from the new one.
  • One option – which appears to be gaining some support, particularly among Conservatives – is to postpone the 2015 election. But the present government has already been in office for 4½ years, and has no mandate to negotiate something so important to rUK as Scottish independence.
  • A better option would therefore be to hold a general election early, before the end of 2014, so there was both certainty about the composition of the UK/rUK Government and that government had a political mandate for independence negotiations. This would need approval by a two-thirds majority in the Commons, under the Fixed-term Parliaments Act 2011.
  • Those negotiations will not be quick or straightforward – not just because of the difficulty or complexity of the issues to be considered, or how trade-offs might be made between issues, but because they are a matter for parliaments as well as governments. Parliaments will need to approve legislation giving effect to the final outcome, and in Westminster’s case also to authorise much of the necessary preparation on the Scottish side. There will need to be close co-operation between governments and their parliaments, both to ensure proper democratic control and accountability in the process and to simplify the process of approving the agreement at the end of it.
  • A special UK Parliamentary committee, probably mostly meeting in private to preserve the confidentiality of proceedings and negotiating positions, would be an important way of helping to accomplish that.
  • There would also be problems about the involvement of Scottish MPs and ministers in the independence process on the UK/rUK side. It would be contrary to the interests of the people of rUK for MPs sitting for Scottish seats to be involved in that process; as those negotiations affect first and foremost the people of England, Wales and Northern Ireland, only their representatives should be involved – whether in negotiating teams, Cabinet or Cabinet committees when considering independence-related matters, or when those are considered in Parliament. This is the West Lothian question on steroids.
  • The need to ensure a broad consensus of support within rUK for the agreement also means that the Opposition – whoever it may be at the time – will need to be involved in the process. In particular, figures from the Opposition should be included in the rUK negotiating team, and party leaderships kept abreast of all issues under consideration. Again, while this complicates the process of the negotiations, it will simplify the process of approving and implementing an independence agreement.

Much of this sits oddly with usual British constitutional practice. But a Yes vote would trigger extraordinary times, and a need for extraordinary measures to cope with an unprecedented and very difficult situation. (Observant readers may note the considerable overlap between these recommendations and those of the Lords Constitution Committee’s report on Scottish independence: constitutional implications of the referendum - which was published after I gave the lecture.  I do differ with the committee’s conclusions about the compostion of hte UK negotiating team and timing of the 2016 election, however.)
As far as a No vote is concerned, the lecture maps out the programme that was clearly being advanced by the Unionist parties in May, and advanced by the IPPR’s Devo More project: separate party policies, cross-party agreement on the key elements of that, early consideration of them following the referendum and implementation through endorsement in the 2015 election manifestoes. That process would clearly need to include the SNP as well as the pro-union parties, unless the SNP chose not to take part. Since I gave the lecture, the Scottish Conservatives have published their proposals in the form of the Strathclyde Commission report (and I have amended the text to reflect that). Subsequent developments have hardened the commitment of the parties both to the need for joint action and a clear timetable, as well as a Scottish-focussed process to agree the main features of ‘enhanced devolution’.
None of this is about simply ‘giving Scotland more powers’. It is about getting devolution right, so that it enables Scottish voters to have what they have wanted for more than a decade: extensive self-government within the Union. That will benefit other parts of the UK too, and not just by achieving a greater degree of constitutional stability. It will ensure that if Scottish taxpayers choose to spend more on devolved Scottish services, they bear the fiscal consequences of that; this would not be at the expense of taxpayers outwith Scotland.
There is, however, a clear need for that to be followed by a wider process covering the whole UK, and the best way to achieve that would be through a conference of members of the UK’s parliaments and legislatures; MPs, MSPs, AMs and MLAs. This is the idea underpinning the Strathclyde Commission’s recommendation for a ‘committee of the parliaments and assemblies’ . Through their election, these figures all clearly have a mandate and authority that other methods of selection would not give them.
Whatever happens on 18 September takes the UK into new and uncharted constitutional waters. It is important that everyone understands what is likely to follow, and what the world is likely to look like in a few months’ time.

This post also appears on the UK Constitutional Law Association blog, here

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Negotiations after a Scottish referendum Yes vote

In just over a week’s time, Scottish voters will choose whether Scotland should become an independent country outside the United Kingdom, or remain a devolved part of the UK. It’s a big decision, but they should not think that the referendum vote is the end of the matter. In reality, it is only the beginning. The pro-union parties have long made it clear that a No vote will start the process of delivering a form of enhanced devolution; a Yes vote will trigger a process leading to independence, about which there are few other certainties.

Much of the campaign in the last few weeks has been about creating a different sort of politics, and a different approach to social policy, within Scotland. But at least as important for Scotland as an independent state is the nature of its relations with the remaining part of the United Kingdom (rUK) – its much larger southerly neighbour, its main economic and trading partner, with which the Scottish Government aspires to share a currency, ‘social union’ and much more. All those plans are predicated on a close and amicable relationship with rUK, with Scotland able to enjoy the continuing benefit of a number of services that the UK presently offers to all its citizens.  The question is: can that vision actually be delivered? Even if that model t is the interests of an independent Scotland, why is it in the interests of rUK, if Scotland chooses a future outside it? If it is not, why should rUK comply with independent Scottish wishes – why is it in rUK’s interests to do so?  And, given the differences in interest in securing that outcome, how might an independent Scotland make it happen?

If there is a Yes vote, there will be a complex and messy set of negotiations between referendum day and independence day. Before those negotiations can start, and certainly before the Scottish Government can talk to any entity outside the United Kingdom, a paving bill permitting it to do so would need to be passed by Westminster. At the end, following those negotiations, both UK and Scottish Parliaments will need to approve the resulting deal. Not all the issues that need to be resolved between rUK and an independent Scotland (iScotland) will be resolved by independence day. Indeed, if the Czech-Slovak parallels are anything to go by (and that was a much simpler case), they will not be fully resolved for at least two decades. That does not mean Scotland cannot become ‘independent’, but that independence will indeed be a process not an event, with many issues falling to be resolved only months or years later. However, for an independent Scotland to start functioning as an independent state, some key top-order issues have to be resolved. Prominent among these are:

  • the currency the new state will use, and who bears the risks associated with that
  • the borders of the new state – particularly its maritime borders, which will affect oil and gas reserves unless a distinct arrangement is made for these.
  • the arrangements for movement of persons between rUK and the new state, both at the border and more generally
  • whether, when and on what terms the new state will be or become a member of the European Union
  • the division of the UK’s current National Debt
  • the division of other UK assets and liabilities – ranging from defence infrastructure to museum and gallery collections
  • what happens to the existing UK nuclear bases on the Clyde
  • if rUK is to continue to administer welfare and pensions payments in Scotland for some transitional period, the basis on which it will do so
  • the means by which outstanding issues are resolved, and what happens if the parties cannot reach agreement by negotiation.

A good deal could be said (and has been) about the merits of each individual issue, and many others besides. (For example, how will benefits or pensions be paid to Scottish claimants or recipients the month after independence? If, as is proposed, rUK continues to provide that service to Scottish citizens, why should it do so?) But resolving each of them, and the relationship between them, which will shape the overall nature of an independent Scottish state, will largely depend on the negotiations with rUK. That is key to the ‘velvet divorce’ the Yes side has suggested would be part of independence. However, successful negotiations depend on each side being able to reach agreement, because each has something the other wants. So how likely is an independent Scotland to secure what it wants from those negotiations? What does it have that rUK would be likely to want? And what does an independent Scotland have that rUK wants?

The common response from the Yes side is to talk about a Scottish ‘mandate’ for independence.  But that is largely irrelevant here, at least on the rUK side. So is referring to Article 30 of the 2012 Edinburgh Agreement which has led to the referendum, and commits the two governments ‘to continue to work together constructively in the light of the outcome, whatever it is, in the best interests of the people of Scotland and of the rest of the United Kingdom.’ A mandate authorises the iScottish side to negotiate; Article 30 means holding negotiations about independence in good faith, and ensuring independence happens – not the terms on which it does so.

If the parties get to a negotiating table, the list of what iScotland has that rUK wants is short. One is continued membership of the United Kingdom – but that is lost if there is a Yes vote. The legitimacy of a UK including Scotland is ended, with no way back.  The obligations of the UK Government toward its citizens living in Scotland are not ended immediately, but they are attenuated, and as Scottish voters will no longer elect MPs, there is no political advantage in being helpful to them.  The act of having a mandate to negotiate means one key potential negotiating point is completely exhausted from the outset.  That card cannot be played again.

A second is that rUK would not want iScotland becoming a failed state. A failed state on the northern border would pose an unacceptable level of risk, in security and other terms. But even if an independent Scotland were significantly less prosperous, inclusive or happy than it is within the UK, that is a far cry from being a failed state. Indeed, the threshold of failing in the way that Afghanistan or Somalia failed is so high that it is almost impossible to imagine what would undermine iScotland so gravely as to make it a failed state. That is therefore not a strong negotiating point.

Third, there is Trident, while the UK/rUK remains committed to nuclear weapons. The thinking until now has been that the Clyde bases were crucial to that, and that might be a strong card. But it is a weaker card if there is a realistic prospect of relocating them elsewhere, as Hugh Chalmers and Malcolm Chalmers of RUSI have recently suggested. In any case, the commitment of the SNP and the wider pro-independence coalition to a Scotland free of nuclear weapons means the Scottish Government has little or no scope to make an offer to rUK for nuclear weapons bases – whether by lease, some sort of carve-out to mean they would not strictly speaking be on Scottish soil, or some other means. The pro-independence side has little room for manoeuvre here, given the commitments of its supporters. All that might be for discussion is the length of the ‘withdrawal period’, suggested in the Scottish Government’s independence white paper as four years (by the 2020 Scottish Parliament elections). There have been suggestions that this might be stretched (and Chalmers and Chalmers suggest removal before 2028 would be very difficult technically). However, any lease less than about 50 years is of limited value if rUK wishes to commission a successor to Trident based in Scotland – with a shorter arrangement, the bases would need to be moved mid-term at considerable cost and with operational implications. So that negotiating point is worth little too, even if rUK is determined to remain a top-tier nuclear power (and is worthless if rUK gives up on that aspiration).

As for other issues like a common travel zone, these are much more marginal to rUK – and much more important to iScotland. The desire to have an arrangement that minimises the border and its impact is much stronger for iScotland than rUK.

On the other hand, what does Scotland want or need? Its desire to ‘share the pound’ has been clearly ruled out by the UK Government. What is important for Scottish voters to realise is that a currency union transfers a disproportionate degree of risk to rUK. It is very hard for rUK politicians to justify taking on those risks for what would be another country. There might be a huge advantage to iScotland from a currency union – but what does it offer rUK? The convenience factor of lower transaction costs is of very limited importance for rUK and its citizens and businesses.  The January announcement means there will be no negotiation about this – but even if there were, what does iScotland have to offer to compensate rUK for the potentially huge risks it would incur?

Similarly, free movement across the border, a ‘social union’ or access to the BBC may have strong attractions for iScotland, but what do they offer rUK? An open border needs to be structured in such a way that it does not cause any security threat to rUK – which means at least some control over iScotland’s immigration policy. A key element to making an open border work would also be the nature of citizenship of UK citizens living in Scotland or with Scottish connections – something on which the white paper is strikingly silent. A further issue, given English concerns about immigration, it would also have to include limits on the rights of people immigrating to Scotland to move to rUK – so it would not be as open as the UK-Irish border is, or the UK is to people from other EU member states. Similarly, why should Scotland get access to the services of the BBC?  If it wishes to have the BBC (and the white paper makes a set of detailed criticisms of it), it will need to pay rUK for doing so – and why should rUK offer the full range of BBC services to Scottish listeners and viewers for less than those in rUK?  And Scottish residents would also have to fund the proposed Scottish Broadcasting Service as well.  Deals may be done, but on what terms?  The question in such cases is what does iScotland have to offer rUK for making a concession which matters a great deal to iScotland but just not very much to rUK?

The problem with all these issues is the asymmetry.  They simply matter much more to iScotland, and its citizens, than they do to rUK.  No amount of wishful thinking can change that.  Something has to be put into the balance to switch the way rUK calculates its benefit and disadvantage from making such concessions to iScotland.  This is aggravated by the way almost all ‘default options’ will be to rUK’s benefit and iScotland’s disbenefit.  By seceding from the UK, iScotland has to make a case to change the loss of much of what it presently enjoys through the UK which appeals to more than emotion.

One negotiating point iScotland would not have – or which can only be used at hugely disproportionate cost – is not taking a share of the UK’s current National Debt. There is scope for negotiations about the size of that share, how it is calculated and how it is offset against other UK assets. But threatening to repudiate a share of the UK National Debt – as various pro-independence hot-heads, and more recently John Swinney – have threatened is about as counter-productive as one can imagine. If iScotland acts unilaterally, it will make itself an international pariah. If it is able to borrow on the global markets at all, repudiation of debt will mean it incurs a very hefty premium on its interest rates. An ongoing dispute with rUK will impede or completely block negotiations about membership of the European Union, as well as international organisations like NATO. There will be sour, damaging relations with rUK for bilateral matters as well.

By contrast, rUK could be a valuable ally for iScotland in securing membership of such bodies as the EU and NATO. There would be three options for rUK; actively to assist and persuade, to remain impartial and do nothing, or actively to obstruct iScotland. It can be helpful, unhelpful, or sit on its hands.  Each of those positions would have a material impact – active assistance and a ‘velvet divorce’ would make iScotland’s passage to statehood hugely easier, active opposition would make it much harder (but without triggering the real threat to rUK of a failed state).

About the only card left for Scotland is to string out the negotiating process so that rUK makes concessions out of exhaustion and frustration.  But this would mean abandoning the May 2016 target for independence (problematic though that is in any case), souring relations with rUK, and undermining democracy in both rUK and iScotland.  If Scots want to be in a different state, that wish should be implemented as swiftly as practicable – not postponed to suit the convenience of the Scottish Government.

It may be a bitter truth for advocates of independence, but an independent Scotland would remain heavily dependent on rUK in a large number of ways. These ways are important for iScotland, but not particularly so for its much larger neighbour. To secure an advantageous ongoing arrangement, it has to be able to make convincing proposals to rUK that deliver things rUK wants or needs – and the list of those, once there has been a Yes vote, is small. The upsides of a velvet divorce for Scotland are huge, and the downsides of the opposite – a grinding-wheel divorce? – even larger. But once a divorce is happening, its nature simply does not matter much to rUK. If there are independence negotiations, iScotland will essentially be a supplicant to rUK, so weak that it largely has to accept what rUK offers.  Scottish voters need to bear that in mind when they head to the poll.

UPDATE, 13 September: There is a relationship between what is discussed in this post and the discussion in my Belfast Lecture and post above about the impact of a Yes vote on rUK, and the framework for any negotiations.  The fact of the Yes vote will have a considerable, adverse impact on rUK – disrupting a variety of institutions and other arrangements. So in addition to there being little reason to be accommodating to iScotland at rUK’s expense, there will be positive reasons not to.  This is not simply petulance, but an understandable reaction to the damaging effects of a Yes vote on England, Wales and Northern Ireland.  A rupture of that scale has inevitable consequences.

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The Strathclyde Commission report

The Scottish Conservatives have today published the report of the Strathclyde Commission, their review of how Scottish devolution should change if there is a No vote in the September referendum. I’ve been an adviser to the commission since it was set up, and it has been a great pleasure to advise Lord Strathclyde and his fellow commissioners, and the party more generally, and to help them consider what can (and what cannot, or cannot sensibly) be done by way of enhancing devolution.

The report recommends the devolution of income tax, including the power to set the rates and thresholds between bands, as well as some smaller taxes, and to look at assigning a proportion of the proceeds of VAT.  It also proposes devolution of attendance allowance, housing benefit if that is possible given the Universal Credit, and a general devolved power to supplement UK-level welfare.

The report is available from the Scottish Conservatives’ website here. Their press statement about the report is here, and Ruth Davidson’s article for Scotland on Sunday on the plans is here.  Sunday’s Telegraph trail for it (pretty well informed) is here.

The impact of the work I’ve been doing with Guy Lodge in the IPPR’s Devo More project is palpable in the Strathclyde proposals. This is clearly a model for enhanced devolution and – as I argued in my chapter for the IPPR’s book Democracy in Britain – works from the point of view of all three major political traditions, with some variations.

Those interested in the effect of the Strathclyde proposals may find it useful to look at two tables I’ve prepared.  These can be downloaded HERE. Table 1 shows how much of the Scottish Government’s budget would come from devolving the various taxes considered in the report, without any change to its current functions. Table 2 shows the proportion of its budget it would generate from tax revenues if the measures of welfare devolution that it contemplates also took place. In the case of tax revenues, it assumes that Scottish tax levels of devolved taxes would remain the same as those set by the UK Government, so in that sense it should be regarded as an assessment of fiscal capacity rather than a straightforward amount of money. The assumption that 10 points of VAT (rather than some other figure) is mine, and made mainly as that is the figure used in Funding Devo More which involved some complicated arithmetic given changing rates of VAT between 2007 and 2010.

UPDATE: There’s news coverage from BBC News here, and a Guardian liveblog (quoting this post!) here.  The Guardian news story is here, a blog post by Severin Carrell here, the FT‘s are here and here (note: registration/paywall), and the Telegraph’s (emphasising David Cameron’s support) here.

 

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Guardian ‘Comment is Free’ piece on ‘What happens after a Scottish independence Yes vote?’

Drawing on my Belfast lecture, I’ve a piece in the Guardian‘s ‘Comment is Free’ section on what would happen following a Yes vote in September’s Scottish independence referendum.  I argue that the difficulties with a long transition are very great indeed, and that there are compelling reasons to ensure Scotland becomes independent by the time of the May 2015 UK general election if there is a Yes vote.  That  would be formidably difficult – not only are there are tough and complicated issues to be negotiated and resolved  between the governments, but also legislation needs to be passed by both Scottish and UK Parliaments (and the UK Government would need to pass a paving bill too).  But the problems caused by a longer transition are even more formidable, in my view.

The CiF piece can be found here.

 

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Filed under Implications of Scottish independence, Publications and projects, Referendums, Scotland, Scottish independence, Westminster, Whitehall