The politics of implementing Calman

The Calman Commission’s final report has become a key part of debates about Scotland’s constitutional future, and by extension those of the UK as a whole.  The Queen’s Speech contained a commitment to ‘take forward proposals’ in  the Commission’s report, and a UK Government white paper to that effect is due shortly.  What that white paper says, and how exactly it proposes to implement those recommendations, will be highly important.  After all, it’s now pretty clear that actual delivery of the white paper’s proposals will not happen this side of a UK general election; there was no slot for legislation in the Queen’s Speech, and there’s precious little legislative time for what’s likely to be a contentious measure anyway. That means the government which has to implement the recommendations is very likely to be different to the one publishing the white paper.  And talk of implementing Calman’s ‘proposals’ – not ‘recommendations’, and without a definite article – implies at least the possibility of cherry-picking from the report, rather than implementing it in full.  (As an aside, it’s worth noting that those involved in the Commission think that it needs to be implemented as a package – but the report itself doesn’t say so.)

It’s best to start with clarifying what the Calman Commission’s report does and does not do.  First and most important, it’s not a radical piece of constitutional thinking.  As I’ve argued elsewhere, in fact it’s very conservative in constitutional terms.  It has nothing to say about the issue of independence, which was excluded by its terms of reference (to the SNP’s chagrin), or even about reshaping the division of powers between the devolved Scottish and UK levels.  It accepts the division of powers from 1998 as satisfactory largely without questioning it, and suggests some pretty limited changes to make it work better.

What the Commission then suggests is that, in order to work properly, that division of powers needs a much more substantial degree of fiscal accountability for Scotland. The model it proposes – devolving 10 points of income tax across all rates, plus various smaller taxes such as stamp duty land tax or landfill tax – would mean that the Scottish Parliament would be responsible for raising about 30 per cent of devolved spending (which itself is about 60 per cent of total identifiable public spending in Scotland).  The measure of fiscal autonomy it recommends is part of making the existing division of powers work better, not about reshaping that division.  And it’s about using taxes to raise revenue from one’s own sources, not as a lever to develop a distinct economic policy.  (As an aside, there are strong economic grounds for criticising the report’s recommendations on those grounds.  The fullest statement of that is in the recent book from Paul Hallwood and Ronald MacDonald, The Political Economy of Financing Scottish Government, though it also runs through the work of Reform Scotland on this subject.  There’s considerable debate about that position, and the Calman view is not universally accepted.)

Second, extending the scope of devolved powers is not necessarily part of a slippery slope toward independence (even if the SNP hope it is).  It can also be part of helping secure Scotland in the Union, by ensuring that the constitutional settlement reflects the wishes of the Scottish people generally to combine self-government with remaining part of the United Kingdom.  The serious opinion polling on this is pretty clear, and pretty consistent over a number of years.  The Scottish people trust devolved government more than UK Government; they think the devolved level should be the most important in their lives, but don’t think it is at present; and no more than 35 per cent have ever supported Scotland becoming a separate state.  Finding an institutional means to achieve those wishes, in a way that is also acceptable in other parts of the UK, is perfectly possible – if the UK level can accept that that is what people want. Calman is an attempt to do so.  It’s not a radical attempt, a shortcoming which in the longer term means it’s unlikely to be the last word in these debates, but it is a substantial step toward what people want.  Forcing the issue to exclude options of this sort simply boosts the position of the SNP.

Third, given all this, the main political effect of the report is to keep the Unionist parties collectively in the constitutional debates that are underway in Scotland.  As a position, it’s at the more conservative end of the broader consensus of public opinion in Scotland.  The key issue in the Scottish debate isn’t whether there should be devolution at all, or a return to rule simply from Westminster, or even about maintaining the status quo.  Even what ‘independence’ means is unclear, as SNP thinking about independence has come to emphasise the close relationships of the various governments in these islands that an independent Scotland would have, and is more about reshaping those relationships than about separate seats at the United Nations. Rather, the Scottish debates are about the form further devolution should take.  Failing to deliver the Calman recommendations is therefore a way of saying to a broad swathe of Scottish opinion that , no matter what they want, London won’t deliver even a modest version of it.  Again, it’s a political gift to the SNP.

Because Calman is so conservative in those terms, implementing its recommendations in full doesn’t put the unionist parties ahead of the game – they’re still behind where public opinion appears to be.  They are at least able to engage in the debate, though.  They can also show the value of their connections with their colleagues at Westminster, and that constructive engagement between Scottish and UK institutions can deliver what Scotland wants.

Fourth, both Labour and Conservative parties are divided about the desirability of the Calman strategy.  There are clearly Labour MSPs at Holyrood who think that this approach – inspired by Wendy Alexander during her short spell as leader of the party at Holyrood – was misconceived.  That view is more widespread in Labour at Westminster (it took two and a half months from the first proposal of this approach, in Alexander’s lecture at Edinburgh University on St Andrew’s Day 2007, to get Gordon Brown to endorse it).

The Conservatives were less enthused about it in the first place, and seem more ambivalent about the idea of fiscal devolution.  For many English Tory MPs, it sticks in the craw, especially given what they see as the undue and unjustified generosity of the Barnett formula arrangements to Scotland.  Getting the party to agree to implementing Calman will call for David Cameron to exercise his authority.  He’s clearly not afraid of doing so on other matters, and his authority is probably at its greatest in the run-up to an election campaign the Tories think they should win.  Nonetheless, his political capital is not limitless and there are many calls on it.  Maybe this is simply a case of the Conservatives keeping their powder dry, so that they can unveil a far-reaching agreement with the SNP if they come to power after a UK general election.  But if they continue to hold back on implementing the Calman proposals, given the speed with which debates are moving in Scotland, they risk being a long way out of the game indeed come May 2010.  If that happens, it will be hard for the Conservatives (or other unionist parties) to make much political capital out of that ‘new settlement’.  Its chief beneficiary will be the SNP.

And there’s the rub.  No doubt Labour’s white paper will be designed in large part to drive a wedge between the government and opposition parties at Westminster and highlight differences between them, as part of pre-election campaigning.  Actually, though, it’s a case where the best interest of both present and future UK Governments is served by delivering the Calman recommendations in full, and as quickly as possible.  That’s not straightforward, given the technical complexity of the income tax proposals.  However, clear announcements can be made, and the other recommendations, on the conduct of intergovernmental  relations and the division of powers, can be delivered quite readily.  Those are important in themselves and as tokens of intent on delivery of the whole package.  Playing Westminster party politics with this issue may win a few (very few) votes in the 2010 election, but will have very serious longer-term consequences.

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Filed under Calman Commission/Scotland bill, Conservatives, Labour, Public opinion, Scotland, SNP

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