New powers for Scotland threaten constitutional crisis for the UK

David Cameron’s claim that the Smith report will create “a stronger Union “ rings hollow when  set against  his insistence that the case for  English votes on English laws is “ unanswerable,”  If it means that English MPs should have a veto on any measure they don’t like that a future  Labour government proposes, it will create a constitutional crisis . Equally hollow sounding  is Scottish Labour’s praise for a good deal from Smith on the   transfer of income tax powers to Holyrood, when only a couple of weeks ago,  Gordon Brown was calling it “a Tory trap” to prevent a Labour majority at Westminster  dependent on Scottish MPs from governing at all. Now he has to swallow his words. The leader of the No campaign Alastair Darling has warned that it will all end in tears. But the reservations of the old grandees who were dominant so recently have been swept aside. .

In this political firestorm the rebalancing of powers between Westminster and Holyrood in the Smith report is too subtle to take it easily. That it’s also a Scottish solution to an all-UK question done in a panic hasn’t helped. The panic has spread to England.  This is no way to bring about the biggest constitutional changes for centuries but it’s the only way we’ve got. For MPs what’s at stake first is their own survival:  for Scottish Labour against the threat from an SNP acting like winners; for English Tories from the UKIP.   The truth is that the bulk of MPs – who are English – have reduced the future of the Union to  an issue about their own powers  – over immigration, the EU and taxation. For now the Union will have to look after itself.

The issue hangs on Smith’s declaration that  “income Tax will remain a shared tax and both the UK and Scottish Parliaments will share control of Income Tax.”  This technically accurate statement  also  defines  the case for allowing  Scottish MPs  to vote for the UK Budget  in full. But it doesn’t wash with the bulk of English MPs.  For them the powers Westminster loses and Holyrood gains are the ones that matter, the ability to set different rates and bands – the amount people pay before different rates apply.   The balancing of powers between the two parliaments is too confusing a political message. They appear to take no comfort from the fact remaining with Westminster will be the personal allowance, the taxation of savings and dividend income and  tax credits, which have been the main instrument for relief in recent years, together with the level at which taxation begins.  Split responsibility doesn’t end with income tax. It continues over welfare.  BBC Scotland has exposed it as a last minute mish mash.

The case for and against EVEL – English votes for English laws – is actually quite a fine one but the Conservatives led by Cameron don’t appear to see it that way. Ferocious interparty battles seem inevitable. With political opinion in England already febrile, the prospect of the biggest constitutional crisis in a century can’t be ruled out. So stand by for months if not years of angry and divisive politics further fuelled by neurosis over immigration and EU membership.

We are also left an ever more lopsided Union which will be very complicated to run. Wrangling and competition between the territories will be built in factor in UK politics from now on. Will people see  a post code lottery for services or the fair choices that devolution  is about?

Welfare is already devolved to Northern Ireland ( at least in law and theory) why  not to Scotland? If corporation tax is denied to Scotland why is it being  granted to Northern Ireland? The reason for  such asymmetry is in fact a paradox .

If the “social union “ that is the  UK is to be defended,  basic principles are applied but local variations that take account of local circumstances  are allowed. The SNP and Scottish Labour portray themselves as more social democratic than England. Very well , let them be more generous but they will have to pay for their generosity themselves.  Impressions that  Barnett formula levels of subsidy will remain are misleading. Barnett levels will  be reduced. They are already too high in Scotland as they are calculated on the basis of similar spending in England but before sweeping English cuts were imposed.

On a differential corporation tax for Northern Ireland ,  the private sector is too tiny for England to worry about tax competition, assuming that brass plating will be  prevented.  The land border with a low rate to the south is enough to make NI a special case.  But with the Barnett formula becoming  ever more controversial, local hearts will be in their mouths  at the consequences for the block grant.

But make no mistake. A lower corporation tax will draw Northern Ireland closer to the Republic and further away from GB, if the results are as good as the most favourable predictions for growth. It’s encouraging the unionist politicians don’t seem to mind and for once are putting a view of the common interest ahead of the old obsession.

Let’s just note a hint of momentum on the inter- party  talks, with Enda Kenny suggesting a joint visit to Belfast with David Cameron.  As  Cameron said about a plan for a constitutional convention. ” I can hardly wait.”

 

 

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  • barnshee

    The treasury is laughing all the way to the bank
    The Scots shortly–followed by the Welsh and N Irish will get to pay there own bills
    The trick for the English will be to make sure that they don`t have to pick up the pieces when the sh1t hits the fan

  • Reader

    Brian Walker: If it means that English MPs should have a veto on any measure they
    don’t like that a future Labour government proposes, it will create a
    constitutional crisis .

    That’s a strange “If” – the obvious procedure is to have English MPs only make decisions on devolved matters. In effect, give them exactly the same powers as Scottish MSPs. Therefore, no constitutional crisis.
    The “Labour Government” of which you speak will deal with non-devolved matters. If they want to govern England in respect of devolved matters they need only win enough votes in an election – which seems entirely fair.

  • Brian Walker

    Reader,

    The context is clear enough. An English veto arises for instance if a Labour government relying on Scottish votes proposes a 50% tax band for England, Wales and Northern Ireland and English MPs oppose it. The Budget can’t be passed and a government that cannot win a vote on supply cannot survive Also, at the moment there are no English “devolved matters,” only matters relating to England only which are often hard to define.

  • Superfluous

    In a post-devolution world they can’t shoehorn UK wide Labour into a Tory leaning England. The first obvious solution is for Labour to split between England and Scottish variations, where English Labour can move further to the Right to reflect the voting base – but then in a Westminster parliament the English parties will become truly dominant, as in on a federal level English politicians will have majority say at all times over the regions – and it becomes a situation like it currently is in NI, where the population of England ultimately have a dominance over the population of Northern Ireland since English parties don’t organise here and vice-versa.

  • Reader

    An area that has been devolved to Wales, Scotland and Northern Ireland is quite clearly devolved to England too, by default. Other areas should be defined specifically – and that is long overdue.

    I think your tax argument depends on confusion as to whether the tax bands are devolved measures or not. At present, they are not. The Smith plan suggests that in a year or so, a variation in the tax bands will be devolved to Scotland, but the overall tax bands are controlled by the UK government. So your scenario actually plays out as follows:
    UK labour Government uses Scottish votes to get a 50% tax band across the UK. They win the supply vote. Scottish MSPs decide not to apply it in Scotland, English MPs (using EVEL) decide not to apply it in England. NI MLAs and Welsh MLAs make their own decisions. Labour Government gets egg on its face and decides to think things through next time. They go off and make a (non-devolved) decision on defence or on the EU to steady their nerves.

  • Scots Anorak

    Any anomalies here are entirely of the Unionists’ own making, predicated on the perceived interests of their parties and MPs rather than on the wishes of the people. Regardless of whether they also want to be independent, around 70% of Scots want full control of domestic issues to rest with the Scottish Parliament, and that’s what will happen, probably sooner rather than later. As for EVEL, it’s entirely possible that Scotland will elect a majority of SNP MPs next year, who don’t vote on English issues as a matter of principle. Both devo max and independence now have very clear trajectories, and it’s anybody’s guess which will arrive first.

  • vaeliard

    If you simply asked each English only vote in parliament to be counted twice (once among all UK MPs and once for just English MPs), and required a majority in both groups to pass the bill, that may be a workable solution. It would still be slightly asymmetrical (in terms of Scots having some say over English only matters), but would allow for collective responsibility. As for a ‘constitutional crisis’ – yes, such plans may create a crisis for the government if it cannot pass certain bills or make certain changes to the English budget, but such a crisis happens regularly in many countries that have 2 equally powerful houses of parliament or a presidency that is separate from parliament (or both, as in the USA). It would not be a ‘constitutional crisis’ as it would not put the constitution at threat. At worst, it would make it difficult for a government to pass anything controversial relating to matters that are (de facto) devolved to England. Some would regard this as a good thing – in fact, my own father (in Australia) maintains that he prefers the govt to never have a majority in the senate (Oz’s very powerful upper house) as he fears any controversial changes to the country. This is a mainstream opinion in Oz.

  • Scots Anorak

    Requiring a majority in *both* groups would still allow Scots MPs to block Conservative-led reforms affecting only England, which would get my goat if I were John Redwood. Failing independence and English devolution, the neatest solution would be a “petition of concern” facility for English MPs to allow them to vote on an issue again separately and overrule the Scots. Scots MPs’ votes have actually made a difference to the outcome of a division on only 21 occasions since 1997; it would hardly be worthwhile instituting double votes when whole parliaments pass without the issue being relevant.

  • Tacapall

    “his insistence that the case for English votes on English laws is “ unanswerable,”

    So will we Irish in the future still need the consent of an British/English/Welsh/Scottish politician before we can decide our own future in a border poll. Does English votes on English laws open a can of worms in relation to that part of the GFA that deals with the calling of any future border poll.

  • Ian James Parsley

    Further to a comment by Brian, actually the only part of the UK where there are “devolved matters” is Wales.

    In Scotland and Northern Ireland there are “reserved (and excepted) matters”, so the assumption favours devolution.

    This is why, though I am impressed with much of Smith, I can’t help but think he asked the question the wrong way around. You need to explain why any given issue or power wouldn’t be devolved, not why it would.

  • Brian Walker

    Ian Parsley says:

    “I can’t help but think he asked the question the wrong way
    around. You need to explain why any given issue or power wouldn’t be devolved, not why it would.”

    That would be federalism Ian, and we’re not there. The short
    answer is on devo max which is essentially your question, Scotland would be worse off. And while there’s a surge in favour of going the whole hog on powers, opinion is less keen on higher taxation and separate Scottish pension . Canny Scots would prefer to stay in line with UK levels. What a surprise.

  • Scots Anorak

    If it’s genuinely the case that Scotland would be worse off than rUK with devo max, it’s a very recent phenomenon indeed based on a currently depressed oil price that may rise again within a matter of weeks once OPEC agrees production cuts (unless it’s a form of devo max that somehow leaves oil revenues with Westminster, which is not the usual understanding of the term). Taking account of the oil, Scotland has paid more tax per head than England for each of the last 33 years. In any case, if the Scots want it, why not give them it? By your own reckoning, it could only benefit the rest of the UK.

    http://www.businessforscotland.co.uk/10-reasons-why-an-independent-scotlands-economy-will-be-stronger-without-westminster/