Anti-Independence Bribes For Scotland Could Wreck The Union

RBS banknote


Hearteningly for those who believe in the United Kingdom and do not want to see the fragmentation and balkanisation of our country, the latest opinion polls still show a large (if slightly falling) majority in favour of voting No in the upcoming referendum on Scottish independence. But this has not put the No camp at ease, as evidenced by new reports of more hurried ‘concessions’ being offered to sweeten the deal for those Scots still vacillating over how to vote.

The Guardian reports:

David Cameron has backed plans for Scotland to set its own income tax rates, including the freedom for the first time to cut taxes below the level of the rest of the UK. He said the proposals, published by Scottish Tory leader Ruth Davidson on Monday, would offer Scottish voters “real powers with real consequences” if they voted no in September’s independence referendum.

The new powers, potentially including control of housing benefit and Scotland’s share of VAT receipts, were described by Davidson as a radical and “thoroughly Conservative vision” for greater devolution.

It is certainly true that additional devolution of powers could fall within the remit of a “thoroughly conservative vision”, as the Scottish Tory leader says – but only if the entirety of the Strathclyde report is implemented, not just the eye-catching parts about tax. Ruth Davidson has taken an excellent piece of constitutional work and boiled it down into a single policy that would actually be harmful if implemented.

The ill-conceived focus on tax is just another reactive move, likely to serve only two purposes, both negative:

1. Offering additional concessions suggests fear and panic on the part of the “Better Together” campaign. When issues of momentum and public perception are known to be so important, it reeks of political amateurism to carelessly give the impression that the pro-Union campaign is somehow on the back foot and in need of new eye-catching reasons for Scots to remain part of the United Kingdom.

2. Offering additional areas for devolved power in a reactive way because of opinion polling is just about the worst way of charting a path toward constitutional reform imaginable. And this latest bribe raises all sorts of questions that our political leaders (many of whom are out of their depth on constitutional matters anyway) are unable and unwilling to answer at the moment. Why, for example, will Scotland be given this new power over income tax, but not Wales, Northern Ireland or England?

The danger is that by touting ill-conceived bonus incentives such as these to remain within the Union without the context of broader constitutional change for the UK (which Lord Strathclyde gave in his report but is going largely unreported), the “Better Together” advocates are simply punting on the issue and creating more problems that the UK must wrestle with in future.

Offering greater income tax and VAT altering abilities may have the short term effect of pleasing a few wavering Scottish voters, but it will also sow the seeds of discontent in the other home nations which are not equally favoured with these powers. How is it wise to fight the flames of Scottish separatism today in a way that can only fuel the fires of Welsh and English nationalism tomorrow?

As with any discussion about devolution of powers, there are also important considerations around the West Lothian question that remain unanswered.

From what little we currently know of the proposal, the Scottish Parliament would be given full power over income tax rate setting (over and above the +/- 3% deviation currently allowed), as well as some control over VAT. But while there is a partial link between taxes raised in Scotland and the amount of money available for Scottish public services, in reality most of the UK’s finances are ultimately fungible, with a big central pot satisfying demands from all corners of the United Kingdom.

If the Scottish Parliament assumes these new powers of taxation but Scottish MPs at Westminster are not prevented from voting on matters of taxation involving England, Wales and Northern Ireland, it would create an extraordinarily strong perverse incentive for Scottish MSPs to vote to lower income tax and VAT as much as possible within Scotland while Scottish MPs vote to keep taxes higher in the rest of the UK, knowing that the rest of the country must continue to subsidise Scottish defence, infrastructure and other critical areas.

But more than questions of hurt pride, inequality or the creation of an incentive to effectively steal from the rest of the Union, this represents yet another cack-handed attempt by politicians to solve a short-term problem at the expense of the longer-term stability of the United Kingdom. More devolved powers over taxes and other areas are a great idea, but all of the home nations deserve these power equally; they should not be granted to Scotland alone.

Giving out important constitutional waivers whenever one part of the union becomes restive is a terrible way to govern, and yet this is increasingly becoming the norm, with the incomplete rollout of Strathclyde’s excellent report being preceded by Gordon Brown’s one-sided suggestion of the same thing – more devolution on taxes and not much else.

This blog has strongly and consistently advocated for a full constitutional convention to be held to debate and agree precisely how we want to move forward as a United Kingdom of four home nations, which powers we want to reserve for “we the people” and which we lend to government at the local, county, devolved country and national level – with equality of powers among the home nations a central tenet.

The current settlement – with broad powers given to the Scottish Parliament, lesser powers to the Welsh Assembly and the fractious Northern Ireland Assembly never more than five angry words away from suspension and the reimposition of direct rule from Westminster – is rapidly becoming more complicated than any of us, least of all our politicians, can wrap our heads around.

At the time of Gordon Brown’s unrequested intervention in January, this blog warned:

When the unionist side is already making such a convincing case and steadily holding a majority of public opinion, why come out proposing “major constitutional changes” as a deal-sweetener? Not only does it reek of panic and desperation, it is a cast-iron certainty that the constitutional changes being proposed will be of a narrow, specific and non-universal nature, designed to bribe voters but carrying with them the unintended consequence of making the architecture of the UK’s political governance even more complex and inequitable than it is today.

Unfortunately, it seems that what was just a doodle in the margins of Gordon Brown’s notebook in January is now well on the way to becoming part of the UK government’s official pitch to Scottish voters, and blueprint for the constitutional future of the entire UK.

Scottish tartan enjoys timeless fashion appeal not just because of the rich culture and history associated with it, but also because of the intricacy and precision, the warps and wefts intersecting and being spaced apart just so in order to produce a unique pattern in the larger tapestry.

It is sadly ironic that the panicked and misguided efforts of short-sighted politicians north and south of the border risk turning the UK – if it survives 2014 at all – into a far messier, less pleasant patchwork than we are today.

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