To protect the Union, recast the Scotland Bill

A strategy for recovery for Unionism in Scotland comes from the unexpected source of John McTernan, a New Labour strategist much respected in Cameron’s Downing St. He’s here talking about a revival for the Scottish Conservatives whose low vote is actually underrepresented  in  both Parliaments. But he could just as easily be talking about the Lib Dems and even Labour, mutatis mutandis.

The unspoken dimension of the debate about more powers for the Scottish Parliament is that Scots will be willing to pay higher taxes. Not true now, and in 2015 after four years of squeezed living standards the idea looks preposterous. Yet that is precisely when the SNP plan to hike income tax by 5p when they introduce local income tax.

Equally it could be said that demands for more powers and a differential  corporation tax for Scotland (a demand that could  complicate  NI’s bid by the way, having already been rejected by Downing St) is playing fast and loose with the block grant on which Scotland’s  large public sector still relies so much.

Alex Salmond has begun battle by calling independence “ inevitable” in spite of smothering the case for it in the campaign. He now foreshadows   a referendum late in the SNP majority government’s new  term. Alex may call such a referendum –  who can stop him? – but legally it can only be advisory, authorising  the Scottish government to negotiate separation with  Westminster . The SNP are a constitutional not revolutionary party and they will not attempt to pull off a Sinn Fein 1918 (not that SF’s UDI in the First Dail succeeded) .

My colleague the devolution expert Alan Trench puts the case for a second referendum approved by Westminster to vote on the terms of the negotiation. So far, the SNP have resisted this conclusion.

Alex’s demand for more taxation powers is designed as a win: win strategy leading towards independence. If denied, he will cry wolf and denounce Westminster for frustrating the will of the Scottish people. If agreed,  another step will have been taken towards the full taxation powers of a sovereign government.

In response, Alan also makes a powerful case for recasting the whole of the Scotland Bill at present frozen in Westminster. The borrowing powers offered are not enough even to satisfy the  unionist parties and should be raised from the  of present amounts of £500 million for cumulative current spending, unchanged from the 1998 legislation, and £2.2 billion for capital spending.  He argues:

To tackle the situation now, and assuming it doesn’t wish to lose the Union by default, the UK Government needs to start by recognising (at least privately) that the Calman process is effectively dead… Come the early autumn, it must have a clear plan. That must include a much more ample scheme for enhanced devolution, capable of securing agreement at Holyrood, and which provides the sort of constitutional arrangement that the Scottish people want.

The present Scotland bill will form part of that; to the extent the rest needs legislation, that will need to follow later in this Parliament, soon but not immediately. But when he lays out the plan for this, the Scottish Secretary has got to set out a clear timetable, so that by 2014 this model is before Parliament (or better, on the statute book even if not yet in force). There is no room to get this wrong now; the UK has used up all its margin for error already.