“The soft underbelly of devolution”

Not my phrase, but one borrowed from Brian Taylor, political editor of the BBC in Scotland and author of books such as The Road to the Scottish Parliament. He was giving a lecture on Scotland and the EU at Edinburgh Law School, and in that context identified three weak points of devolution: the soft underbelly. Relations with the European Union; England; and money.
 

I’ll deal with each briefly in turn.

Clearly any ‘federal’ or ‘semi-federal’ state will have difficulty working out relations with or within the EU. Can a federal state work properly when it is nested within another federal-type (or multi-level) system such as the EU? In the UK, the issue is dealt with by making EU affairs reserved matters under the Scotland Act, but at the same time allowing full association of the Executive with policy-making, as after all the Scottish Parliament must faithfully implement any legislation emanating from the EU within its sphere of competences, in areas such as fisheries or health, for example. Even in a non-asymmetric system, however, such as Germany, relations can be difficult. Many argue that Germany is weighed down in its dealings with the EU by the complexities of finessing the various Länder interests, and is ultimately a less effective operator. In any Member State’s negotiations with other Member States in the EU Council of Ministers, there is only room for one national position. What if Scotland and the rest of the UK are in conflict – e.g. over fisheries? What if Bavaria and North Rhine Westfalia have very different interests? Who decides?
 

The English problem stems partly from the asymmetry of the current arrangements and partly from the geographical peculiarities of the UK. Historically, federal systems in which one large unit is federated with two or three other ones, the largest of which is one tenth the size, in population terms, of the large one, have not proved very stable. Moreover, if ‘devolution’ is something to do not only with issues of nationhood, but also with issues of localism (which it very probably is, especially in Wales and Northern Ireland) then an ‘English’ parliament is clearly not the answer to diversity and the demand for greater local democratic control within England. It will be a parliament representing 50 million people. The parties at the Westminster level are not proving very keen to grapple with this undoubted weak point in the system. For the Tories, as a unionist party, even ‘English votes for English matters’ within Westminster is a problematic posture to adopt. Labour seem palpably unwilling to open up the can of worms that this issue poses. And frankly, the Liberal Democrats at Westminster level, albeit much more open to flexible federal solutions, seem to be waning in importance.
 

And finally, money. The money issue has nothing as such to do with devolution, because it stems from the Barnett formula originally devised long before 1997, an allocation of funding across the UK that seems in its current guise to be manifestly unfair to England and Wales and manifestly skewed towards Scotland. The problem is that such a centralist approach clearly does not fit with the devolution of considerable powers to sub-national authorities. There was little to agree with in Johnny Grimond’s bitter rant about Scotland in last week’s Economist (not worth linking to because it is behind a subscription wall, but you can find presentation of the argument and criticism here, here and here), except in relation to the argument that the power to spend should indeed be allied to the power to tax. The UK needs urgently to look at fiscal autonomy to go with the devolution of powers. This is not because this will give the English things the Scottish have, such as lower university tuition fees, which they think they are being denied because of budgetary constraints. The differences lie in political choices, not budgetary possibilities. England, for better or for worse, is making different political choices to Scotland. That is very clear in the health services and schools arenas. Even leaving aside the West Lothian question, those political choices would be more legitimate and probably better thought through if they were tied to a system of fiscal autonomy, combined with an appropriate system of fiscal transfers which all federal systems must have in order to maintain solidarity within the union. Fiscal autonomy will not necessarily lead to the break up of the UK. I hope it does not. Refusing to contemplate such autonomy may on the contrary, though, foster the types of political movements which will ultimately do much greater damage to the union.