Written by Simon Toubeau.
Although Scottish voters decided to remain part of the UK in September 2014, the question of Scotland’s constitutional future remains an important concern for the Conservative government. Its efforts to deal with this matter have resulted in the ratification of The Scotland Bill in November 2015, which drew on the work of the Smith Commission.
The bill promises to offer an ‘enduring settlement’ that anchors Scotland firmly in the UK. But, in reality, it is another instance of reform that heralds the return of a ‘dual polity’.
How will the bill affect the autonomy of the Scottish government?
The nub of this bill is about allowing the Scottish government to forge its own way in matters of welfare policy and providing it with greater financial independence from the Treasury.
The Scottish government will gain control over the allocation of various social assistance cash hand-outs and will be able to make some discretionary supplementary payments to welfare recipients. It will also be taking responsibility for the Work Programme- a labour market activation initiative.
This transfer of powers should enable the Scottish government to develop an independent approach to public policy that is better aligned with the preferences of Scottish voters.
How will these new powers be funded?
The details of how these new powers are to be funded, however, remains to be worked out.
There are two contrary forces at work here. On the one hand, the control over welfare benefits and employment policies will lead to a transfer of around £2.5bn a year to the Scottish government. On the other hand, the Scotland Bill makes new provisions for fiscal autonomy: the Scottish government can set the rates and bands of personal income tax and it will receive a proportion (up to 10%) of VAT revenue raised in Scotland.
To offset this loss to its revenue, however, the Treasury must recalculate the size of the block grant that it transfers to the Scottish government. How this is done is shrouded in uncertainty, because the Smith Commission did not have the time to consider Scotland’s broader fiscal framework; it only mentioned some principles that should be adhered to, many of which cannot be reconciled. So, the sums will be settled behind closed doors, between the British and Scottish governments.
How will the bill affect the Scottish government’s relations with the UK government?
The relation between the Scottish and UK government is thus likely to become more conflictual.
At stake are two issues: how to reach agreements in areas of welfare policy, such as housing or unemployment benefits, that are now effectively ‘shared’ between the two levels; and how to make adjustments to the block grant in relation to the devolution of new powers.
In the past, such matters would have been resolved informally between ministers and senior civil servants in London and Edinburgh. But, the Smith Commission judged that this way of doing things was inadequate for handling the important new powers transferred to the Scottish parliament and so proposed that the machinery of inter-governmental relations be ‘scaled-up’.
This potential strengthening of inter-governmental relations is said to portend the emergence of a ‘Federal Britain’. The comparison made is with Germany or the USA, where representatives of state governments are directly represented in the upper chamber of the federal parliament, and thus engage in collective ‘shared rule’ with other units of the federation in the making of national laws.
The forces of nationalism that pushed for devolution are thus balanced by the forces of the constitution that bring the Scottish and British governments into dialogue. Devolution and Federalization march on, hand in hand.
Does this mean a ‘federal’ Britain?
Devolution sceptics and enthusiasts alike have embraced this federal vision, since it seems equally to satisfy their wishes and to quell their worries. But this federal vision is misguided.
The main reason is that, in spite of the Smith Commission’s urgent concerns, none of its specific proposals for reforming the system of inter-governmental relations have found their way into the Scotland Bill. Instead, this matter has been kicked into the long-grass, and left for future deliberation, largely between the devolved and central executives.
Second, there has been very little coordination between the Edinburgh government and its counterparts in Cardiff and Belfast over the new powers they seek to obtain and over the adoption of common practices or positions in their relation with London over shared policy areas. The reality remains one of informal bi-lateralism between national and devolved governments.
This outcome is less surprising if one considers the UK in light of comparable countries, such as Belgium, Spain and Canada: pluri-national states that have also experienced decentralization in order to contain the forces of nationalism. In these states, ‘federalization’ has lagged far behind devolution, and the system of inter-governmental relations remains weak to this day.
The return of a ‘Dual Polity’
Rather, amid these important constitutional changes, the UK is returning to its historic character as a ‘dual polity’- a term coined by the late British political scientist Jim Bulpitt.
For much of its history, the British union was an inchoate throng of different social, administrative, religious structures inserted into a legislative union, characterized by an important duality in which the central government retained primacy in ‘high politics’ and left the detail of domestic politics to local institutions. This was the case until the modernization of the British state in the post-war era under its social democratic and Thatcherite guises.
This duality is gradually being resurrected. The Scotland bill represents the centre’s top-down response to nationalism’s political pressures for change: its content overwhelmingly reflected the preferences of British mainstream parties, with little direct involvement by the Scottish government; its aim is a steady disentanglement between the UK and Scotland that allows the latter to go its own way in matters of welfare policy, and to pay for it.
This disentanglement is, moreover, paralleled and reinforced by the simultaneous decision to provide English MPs with exclusive say in policy areas that now only affect England, albeit within the confines of Westminster, rather than through territorial decentralization.
So, the dualism long central to the art of statecraft in the UK is now back, for the foreseeable future.
Simon Toubeau is an Assistant Professor at the School of Politics and International Relations. Image credit: Wikipedia Commons.