Wake up call for England

6 Apr 07
PETER RIDDELL | The devolution settlement is about to face its severest test.

The devolution settlement is about to face its severest test.

For the past eight years — the first two terms of the Scottish Parliament and Welsh National Assembly — there have been plenty of political squalls, but the basic devolution arrangements have proved largely uncontroversial.

This success has been for both political and economic reasons, the latter often under-appreciated.

The obvious political factor has been that the same party has been in control both in London and in the devolved executives (in the Scottish case shared with the Liberal Democrats). Labour has talked to Labour.

That has permitted a divergence of approaches on the running of key public services between the Blair government and the devolved administrations. A reinforcing factor has been the co-ordinating work of the Scottish and Welsh secretaries.

It has all been underpinned by the sharp rise in public spending since 2000, averaging more than 5% a year in real terms. That has allowed the Scottish Executive to have more generous student finance and residential care for elderly people than in England without having to squeeze other programmes.

All this could be about to change. Whatever the exact results, Labour looks like doing badly on May 3. The Scottish Nationalists could become the largest single party at Holyrood. But even on the most optimistic polls so far, the SNP would still be a long way short of an overall majority.

However, Labour and the LibDems might not win enough seats to renew their eight-year-old coalition — and it is possible that the LibDems might prefer opposition to being linked with a losing Labour group.

That could mean either a grand coalition of the main unionist parties or a minority SNP administration, possibly with some of the smaller Left-wing parties.

Despite some alarmist headlines, that does not mean we are heading for the break-up of the UK. The SNP would find it very hard, if not impossible, to get a majority in the Parliament for legislation on a referendum on separation. And the polls suggest that an independence ballot would be lost.

However, even short of such a constitutional confrontation, there would certainly be conflict, strains and tensions. Alex Salmond, as SNP first minister, and Gordon Brown, as incoming prime minister, are not exactly best friends, and each would be trying to get the better of the other.

Whatever happens on May 3, relations between the centre and the devolved administrations are certain to become trickier because of the Comprehensive Spending Review.

We already know that the overall rate of spending growth will halve to around 2% a year in real terms from 2008 onwards. Education will do better than most at 2.5% a year, but still more slowly than recently. The same is likely to apply when the details of the health and other budgets are announced in October.

Before then, the new post-election devolved administrations will conduct their own spending reviews in conjunction with the Treasury. Under the Barnett Formula, which relates their grants to spending by Whitehall departments, the growth of spending on devolved matters is bound to be much slower. That will, in turn, limit the scope for policy initiatives and divergence.

These political and economic developments will strain the carefully constructed arrangements for trying to limit conflict between London, and Cardiff and Edinburgh.

The arrival of Brown in Number 10 is a further complicating factor. Not only does he have a direct constituency interest as a Scottish MP but he is hypersensitive to all the arguments about devolution and the union. As his frequent speeches on Britishness have underlined, he is a committed unionist, not least to justify a Scot becoming prime minister.

That close involvement is both a plus and a minus. Brown will certainly not neglect the union. But, equally, his personal involvement could lead to a confrontational approach with any SNP Executive.

Differences of political control, and consequent conflicts, could lead to demands for the granting of more powers to the Scottish Parliament and Executive, and a complicated parallel debate in Cardiff.

We would even hear more demands for an English Parliament or English votes for English laws, both of which look wholly impractical.

More likely are pressures to revise the Barnett Formula for distribution of the central grant — much though that will be resisted by Labour. There is a strong case for the devolved administrations to have greater freedom to raise revenue, and to levy new taxes.

All predictions must be heavily qualified. But we appear to be moving from quiet childhood to turbulent adolescence for the devolved bodies. Former Cabinet Secretary Richard — now Lord — Wilson, once remarked that constitutional reform had happened under anaesthetic. He was right. The English hardly noticed. We are about to wake up.

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