Politics and Governance in the UK

Second edition

by Michael Moran

Update 49 - July 2014

The difference the referendum is making

Nobody knows with certainty how the Scottish people will vote in the independence referendum on 18 September, but we do know one thing with certainty: the referendum campaign has already irrevocably changed the way the United Kingdom is to be ruled. We know this because, in advance of any result, the major UK political parties, Conservative and Labour, have committed themselves to big changes in the devolution settlement if the referendum rejects the call for independence. Thus we can be sure that one of two significant outcomes will happen after September 18th: either we will have the constitutional earthquake of independence, or the lesser, but still significant, change of a major expansion of devolved powers.

What these expanded powers might be we still cannot be certain about, but the reports of two commissions established by the Labour and Conservative Parties in Scotland give a clear idea of forward thinking, and they both suggest radical change.

Scottish Labour’s Devolution Commission Report published in March 2014 -available at http://www.scottishlabour.org.uk/campaigns/entry/devolution-commission - proposes a whole set of institutional changes which will make Scottish administration more distinctive: for instance the jurisdiction of the UK wide electoral commission would be replaced by Scottish control over the administration of elections in Scotland. But the two key recommendations concern taxing and spending. First, ‘Labour will give the Scottish Parliament the power to raise around £2 billion more in revenues beyond the recent Scotland Act, so that it raises about 40 per cent of its present budget from its own resources.’ And second, ‘we will widen the variation in income tax in the Scotland Act by half from 10p to 15p. It will mean that three-quarters of the basic rate income tax in Scotland will be under the control of the Scottish Parliament.’ The Strathclyde Commission (http://www.scottishconservatives.com/wordpress/wp-content/uploads/2014/06/Strathclyde_Commission_14.pdf), the report of the Scottish Conservatives’ position on devolution published in June 2014, goes even further: full control over taxation powers (setting both rates and bands) should, it recommends, be in the control of the Scottish government.

These commitments are obviously a response to the challenge of the referendum campaign. But they also reflect something deeper. In the two editions of Politics and Governance in the UK I have raised, without answering, the question: is the devolution settlement of 1999 stable? That was the intention: devolution was to establish once and for all the division of powers between Westminster and the devolved systems. But these proposals show that the settlement is not stable. Indeed, one consequence of the widening of Scottish powers has been to make more vocal Welsh calls for enhanced devolution. The distance travelled by the parties in the last fifteen years is remarkable: the Conservatives, the defenders of the Union in the first devolution debates, are now trying to outbid Labour in offering enhanced powers.

Thus, whatever the outcome on September 18th, the governance of the United Kingdom will never be the same again.