Robbie Dinwoodie reported in Friday’s Herald (here) that it was likely the Scotland Bill Committee at Holyrood would recommend that the Parliament withhold legislative consent unless joint commencement arrangements for the income tax provisions were agreed. It’s odd that this particular issue should seemingly be the decisive one, though less so if one looks at the conduct of the various parties.
The unease of the Holyrood committee about the bill is no wonder. The committee has an SNP majority, including three ex-ministers. The UK Government has declined to amend the bill as requested by the predecessor committee, let alone in accordance with the changes sought by the SNP Scottish Government. The bill already failed to incorporate some recommendations made by the Calman Commission (notably devolving a share of income tax arising from interest and dividend payments, air passenger duty and the aggregates levy), but included a UK Government wish-list of powers over matters like referrals to the UK Supreme Court and international relations that would increase UK power to control the use of devolved powers. None of that is conducive to helping gain support for the bill at Holyrood. There’s a long list of concerns about the bill, including those set out in my own evidence, and the evidence of Michael Moore and David Mundell last week may have been emollient but it was also unyielding.
But perhaps the key issue is the way the Scottish block grant is to be cut to allow for the new devolved power over income tax. This has been a key objection of mine to the bill’s proposals, from the time it was published just under a year ago. It ought to be fairly straightforward to calculate the first year’s reduction, and illustrative figures for that could have been prepared when the first UK Government white paper was published in November 2009 (but wasn’t). What’s more difficult is the methodology for adjusting that amount in subsequent years, so the amount by which the block grant is reduced in year 5 or year 10 after the new system is introduced is still ‘proportional’. This issue was covered in a single sentence into the Calman Commission report, but took 10 pages in the Holtham commission’s report looking at the same issue for Wales. Although the first Scotland Bill Committee made a recommendation about the approach based on the evidence of Gerald Holtham, the UK Government has still not set out its position about this vital issue – two and a half years, now, since the Calman report was published. All Moore could say about this when questioned about it before the Holyrood committee last week was that a meeting with the Scottish Government had agreed ‘principles’ for the calculation, though he did not divulge what those principles were or how far the agreement went, and that the committee – and implementation of the Act – meant he should be trusted. It was telling that many of the sharpest questions on this point came from David McLetchie, the only Conservative on the committee. They aren’t limited to the SNP, nor should they be.
The Scottish Government’s proposal for joint commencement (or, more accurately, implementation) arrangements arises principally because of this lack of clarity about the reduction in the block grant. Their position is that this is a way of ensuring that the approach taken by the UK Government does not undermine the interests of the Scottish Government. Given the importance of the point and the UK Government’s lack of clarity about it, such an approach is entirely understandable. But both Moore and, a couple of weeks earlier Lord Wallace, indicated that such a provisions would be unacceptable because the bill is ‘a package’. So joint commencement seems out, though it has become a key minimum demand for Holyrood and the circumstances mean it’s an understandable one.
That means that either the bill as a whole will fall (which is what Michael Moore has said would happen if legislative consent weren’t forthcoming), or it is imposed on Holyrood despite its rejection there. As I’ve argued HERE, the latter would seriously undermine devolution as a constitutional project. The former would show that devolution is in fact incapable of evolving, though.
In taking this position, the UK ministers seem to have overplayed their hand. It’s their bill, and one which the present Scottish Government and a majority in the Parliament don’t care for very much. To gain their support, the UK needs to make its case that it is in fact in Scotland’s interests for the bill to go forward, and they’ve shown no eagerness to revise it to make that case. The changes made to the Calman package in preparing the bill were clearly to its detriment; the changes made since introduction (the clauses relating to the UK Supreme Court) are seen in the same way. However, the pressure is on London here, not Holyrood. Failure of the bill would suggest that London is intransigent, that it doesn’t have the best interests of Scotland at heart (it certainly has failed to argue convincingly that it does), and that devolution is in fact incapable of developing to respond to changing circumstance. In practice, looking to a referendum it would mean that the options for the future would come down to independence versus the status quo. That is a very uncomfortable place for the unionist parties to be.
All this goes back to the ‘original sin’ of the Scotland bill; the fragmentation of constitutional debate that took place in the second half of 2007, between the start of the ‘National Conversation’ and the unveiling of the Calman Commission (see HERE for my detailed discussion of that). The political assumption underlying the unionist parties’ position was that they would be able to bring their proposals into effect without the need for engaging the SNP in the process, it was a mistaken one – not just with hindsight (because of the May 2011 election), but at the time, because constitution-making has to proceed in different ways to ordinary politics, and runs into serious difficulties when it excludes one of the major parties in a political system. The SNP has no stake in the Scotland bill because it was outside the process that produced it.
Where we are now means that any amendment of the bill would be an embarrassing highly visible climb-down – there’s no discreet way out of this situation. But that is probably better for unionists than the alternative, of losing the bill entirely, with all that says about devolution as a project.