With even unionists now arguing for radical devolution for Scotland, Britain is about to become a very different place
The Scottish Question has been undergoing such rapid twists and turns in the past few months that even constitutional anoraks like myself have had difficulty keeping up. But one thing is clear: whatever happens in the independence referendum scheduled for 2014, Britain is about to become a very different place.
Let me explain. At the turn of the year, the UK coalition government finally realised that the possibility of Scotland leaving the UK was no longer the fantasy of a nationalist fringe.
Prime Minister David Cameron came to Scotland determined to seize the political initiative from First Minister Alex Salmond. He did so by, on the one hand, insisting that the referendum should be a single question – independence ‘Yes’ or ‘No’ – and, on the other, offering ‘new powers’ for the Scottish Parliament should Scots reject separation.
That was on February 16. Three days later, Alistair Darling, the former chancellor who is Labour’s leading voice in the unionist campaign, declared: ‘The status quo is not an option.’ To be responsible, he said, a Parliament that spent money needed also to ‘suffer the pain of raising it’. This was a significant departure from a politician who has been no enthusiast for fiscal autonomy in the past.
For their part, the Liberal Democrats have set up a commission to explore greater tax powers, headed by former leader Sir Menzies Campbell. This means that none of the unionist parties is now in favour of the status quo – or indeed the current Scotland Bill, under which Holyrood would raise 10p per pound of income tax. The Bill has become obsolete before it is passed.
A unionist consensus is emerging instead around a proposal called ‘devolution plus’, promoted by the Conservative-leaning think-tank, Reform Scotland. Under this arrangement, the Scottish Parliament would raise all income tax, corporation tax and excise duties and would receive a geographical share of oil revenue. The Barnett Formula, which sets per capita funding for the devolved nations, would be scrapped. VAT and National Insurance would remain with Westminster. Chancellor George Osborne is reportedly enthusiastic about Devo-plus and favours offering a commission on fiscal autonomy after 2014.
So, by default, the unionist parties are now turning to what is a form of federalism. This is arguably as radical a constitutional change as the establishment of the Scottish Parliament itself in 1999. However, the unionists are not insisting that Devo-plus should appear on the ballot paper in the referendum. Cameron, Darling et al say that the Scots should take it on trust that, if they vote ‘No’, better devolution is what they will get.
But there is history here. In March 1979, on the eve of the original devolution referendum, the former Tory Prime Minister, Lord Home, urged Scots to vote ‘No’ because the incoming Tory government would ‘offer something better’. It never did. Indeed, then PM Margaret Thatcher turned the Conservatives firmly against all forms of devolution.
It seems to me – and to constitutionalists such as Professor Vernon Bogdanor – that this is untenable today. If Devo-plus is to be taken seriously, the Scots will have to be offered a clear choice, either in a second question or a second referendum. Otherwise, how will they know what they are voting for when they vote against independence?
But it also means that Britain has changed without realising it. Ceding extensive tax-raising powers to Holyrood will place Scotland in a similar position to the semi-autonomous province of Quebec, which has a very different political culture to the rest of Canada. The Scottish National Party might style it ‘independence-lite’, because even Alex Salmond envisages an independent Scotland maintaining a ‘social union’ with England, retaining the Queen, the pound and the Bank of England. Devo-plus looks like the price that will have to be paid to keep the UK intact.
There might not be any border posts, but we will be in a different country, even if the name stays the same.
Iain Macwhirter is political commentator on the Sunday Herald
This article first appeared in the April edition of Public Finance
