Devolution in the Head

By Liam Payne

A constitutional conundrum. A constitutional contraction. In the world of Scottish politics, even a global pandemic has been unable to fully shift attention away from the topic of the constitutional settlement. Since 2014, every devolved policy area, every political occurrence, has tended to be accompanied by the undertow of a simmering battle between Independence or Union. 

Throughout this modern constitutional contest, the labour movement left has struggled to make its voice heard above the din. Historically, the preservation of the union had been championed in the terms of left shibboleths such as solidarity and class consciousness. However, the various setbacks incurred by the UK left since the dawn of the neoliberal counter-revolution of the late 1970s, led adherents of the left in Scotland in particular to increasingly look to constitutional change in the UK state as a palliative to Thatcherism and ‘third way’ neoliberal political hegemony.

In the first instance, this took the form of arranging an unofficial ‘constitutional convention’ in the late 1980s, and the labour movement left largely falling in behind the call for devolution of powers to Scotland, through the creation of a ‘workers parliament’. After the achievement of a form of devolution in 1998, it was felt by the Labour Party in particular, that constitutional agitation in Scotland was a sore that had now been treated.

The minority SNP government formed after the election in 2007, and the supposedly electorally impossible occurrence of this becoming a majority administration in 2012, illustrated that this was a fantasy. The constitutional issue in Scotland was now front and centre, and has remained so.

During the campaign leading up to the totemic 2014 independence referendum, a number of activists from the labour movement left were drawn to the energy, ideas and potential of the radical independence group. The end result, however, was an apparently solid win for remaining as part of the UK. A year later, and the referendum campaign and left support for a radical ‘Yes’ option had translated into the implosion of the electoral ‘red wall’ across central Scotland in the UK election, in favour of the Scottish National Party.

In this climate, the labour movement left has been looking to get its constitutional house in order. Through this process, an acceptance of the democratic right of Scotland alone to decide its constitutional future has correctly been advanced, and this has been allied to a specific left solution to the issue – in the form of enhanced devolution, based on the principles of solidarity, class consciousness and subsidiarity. The important work of groups such as the Red Paper Collective in this area, has recently been enhanced by the Remaking the British State report from the Labour Party’s Sean Griffin.

Devolution with a Purpose

In a section of the report titled ‘More Powers for a Purpose for Scotland’, Griffin outlines further devolution measures for Scotland that could be enacted by a radical Labour government, without the need for the further constitutional changes the report proposes for the UK as a whole.

For this purpose, a new Scotland Bill should be introduced to Westminster immediately. This would include the devolution of further powers to Holyrood and the reframing and refining of the existing structures of devolution. A high priority would be the replacement of the block grant and Barnett formula of extra funding with a legally applicable and progressive alternative.

Currently, the devolved government of Scotland receives the majority of its funding – just over half – from a block grant administered as part of the UK state budget. This funding is granted at the whim of the Treasury office and Secretary of State for Scotland, and is then available to the Scottish government and parliament for any purpose it decides. To maintain parity and fairness in the still-existing UK state, any increase in the UK budget concerning devolved areas is passed onto to the devolved administrations using the Barnett formula.

This calculation takes into account how much of a specific policy area is devolved – which the UK government is responsible for contributing towards through the Barnett formula top-up of the block grant –  and the proportion of the Scottish population as a percentage of its English equivalent – or England and Wales depending on the area of extra funding. The Barnett formula thus ensures extra funding is added to the original block grant for any devolved competencies that have received additional fiscal stimulus from Westminster, and apportions this relative to the population of Scotland.

Crucially for Scotland, this formula does not consider any regional contexts in its application. The public sector, and its attendant spend, is larger in Scotland than the rest of the UK (rUK). For instance, water provision is still a nationalised industry in Scotland, so is funded through the state. Additionally, the relatively sparse population of swathes of northern Scotland can precipitate an increase in the funding needed to supply public services. Also, levels of deprivation are historically higher in Scotland than rUK. All of this adds up to additional funding needs that the Barnett formula takes no consideration of.

Importantly though, Griffin rightly acknowledges that while Scotland has suffered to a degree from the inadequate Barnett formula, it has consistently benefitted from generous block grants from the UK – something independence supporters will need to contend with, moving forward. Griffin wishes to see these arrangements updated in a progressive manner to reflect the problems above, and placed on a statutory and legally binding footing to remove them from any arbitrary decisions by bureaucrats or a single appointed politician.

Tax and Spend

Building on this, Griffin proposes that extra tax powers be granted to the Scottish government. Firstly, he highlights that the maintenance of certain UK-wide taxes has a common sense. The devolution of something like corporation tax could see divergences in rates between Scotland and rUK, which could lead to capital and job flight from one to the other, and perhaps a classic ‘race to the bottom’.

Bearing this in mind, Griffin posits that Scotland should gain devolved control of excise duties on alcohol and tobacco, plus all betting and gaming levies (with obvious fiscal and potential health/social benefits). On top of this, the power to create a new Scottish Wealth Tax should be devolved. This could allow Scotland to tackle inequality in a more contained and specific manner than through the further devolution of existing tax powers.

As a remaining member of the UK, Scotland would benefit from Labour’s proposed National Investment Bank and National Transformation Fund. These would be utilised to repurpose the UK economy away from short-term financialisation, and redistribute national wealth across the nations and regions of the country in search of increased needs-based productivity and equity. Griffin’s report supports the Scotland Office gaining control of any investment through these channels that concerns competencies which remain reserved at Westminster, such as rail infrastructure, to still allow a degree of democratic Scottish control of these investments.

All current caps on Scottish government borrowing amounts should be removed. Holyrood should be able to “borrow and issue bonds for both resource and capital spending without any restrictions.” (p.97). To avoid any ‘moral hazard’, access to the National Loans Board of the UK state could be restricted, with any borrowing coming mainly from commercial financial sources. This is to avoid the Scottish government borrowing beyond its means, with the guarantee of the UK bailing the administration out as a last resort.

Social Policy

Further devolution measures, Griffin avers, should include aspects of employment law, especially pertaining to trade unions. There should be the power to reintroduce the ‘absolute protection’ of the right to strike, the removal of ballot requirements and notice periods, a return of the right to solidarity action by other trade unionists, the compulsory reversion to sectoral collective bargaining for all employers, and the ability to ban new forms of precarious employment practices.

To deal with the epidemic of drug deaths in modern Scotland, drug policy should be fully devolved to Holyrood. This would be accompanied by the full devolved administration (short of full devolution of power) of all social security – including Universal Credit. This would sit alongside the raft of benefit entitlements the Scottish government gained power over after the 2016 Scotland Act, many of which have still to be taken up by the SNP administration.

From an internationalist perspective, Scotland should be granted the ability to confer a Scottish Graduate Visa on qualifying candidates. The influx of students to Scottish higher education institutions due to free tuition for EU citizens has been severely threatened by Brexit. This new visa would allow the Holyrood parliament to try and assuage this drain by offering the chance of overseas students gaining an employment visa after graduation. This could also contribute to attempting to reverse Scotland’s historically decreasing population. Furthermore, Scotland should have the power to enter into international treaties concerning any and all matters that are devolved.

Constitutional Conventions

In conjunction with such enhanced devolutionary powers, Griffin envisages a tightening of the constitutional conventions that were adopted largely at the onset of devolution. The Sewel Convention was created after the successful 1998 referendum to establish the devolved parliament in Edinburgh. Its purpose is to allow deliberation between parties when the UK government seems set to legislate on issues that could either directly or indirectly affect devolved competencies and administrations.

Griffin aims to see the wording pertaining to this convention in the extant Scotland Act changed to state that the UK government ‘must not’ legislate on anything deemed to encroach on devolved competencies without the express consent of those administrations. Currently, the guidance is that this should ‘not normally’ occur – which gives Westminster overarching control. Again, Griffin wants this convention to become legally binding.

As it stands currently, official liaisons between the devolved administrations and Westminster take place through a Joint Ministerial Committee (JMC), which meets on an ad hoc and largely unofficial basis. Griffin would again suggest that this body be made statutory and given legal definition. This should be the first line in any inter-governmental discussions and decisions pertaining to the devolved settlement at the UK level as a whole.

As part of the legal locks put on the devolution structure, Griffin proposes that all UK government departments be mandated to carry out ‘Devolution Impact Assessments’ and “establish how the devolved settlement in Scotland may be affected by a policy and based on this assessment, the JMC should be consulted.” (p.98).

Furthermore, to foster cooperation between the devolved parliaments, an Inter-Parliamentary Committee should be convened at Westminster, made up of backbench representatives of all the devolved chambers and the House of Commons. This could act as a check on the more powerful functions of the JMC.

Finally, Griffin posits that the existing UK government Scotland Office should also have its position strengthened. It should be given specific competencies relating to matters that are still reserved at Westminster, an example being its control of any Scottish share from state investment proposals mentioned previously.   

Forward Steps of Labour

In a live TV performance of The Beatles 1968 musical broadside ‘Revolution’, John Lennon qualified his incendiary song title with the line “Don’t you know you can count me out/in”. This lyrical and political equivocation can also be applied to the positions adopted by the left in Scotland on the constitutional conundrum – some out, some in, and others in between. The work that the left-led UK and Scottish Labour Party’s, and groupings such as the Red Paper Collective, have been patiently undertaking over several years has begun to flesh out what that ‘in between’ position could and should look like.

Prioritising the democratic rights and socio-economic needs of Scottish citizens, the engendering of class consciousness to combat simplistic and binary nationalisms, maintaining solidarity between working people regardless of their geographic location, and pursuing the devolution of powers and responsibilities to their lowest natural level – subsidiarity. The proposals contained in Sean Griffin’s timely and thorough report contribute significantly to the historic aim of creating a truly democratic state, in both Scotland and the UK as a whole.

These important proposals should form a core part of any labour movement programme for a Scotland dominated by the spectre of on-going constitutional wrangling, offering a progressive third option outside the old divisions. Properly engaging in the constitutional debate could allow for a resumption of the labour movement’s previous level of influence in Scottish politics and civil society, and perhaps finally fulfil Mick McGahey’s vision for a truly radical ‘workers parliament’ in Scotland at long last.

Liam Payne is a Labour Party member based in Edinburgh.

Image: Debating chamber in Scottish Parliament. Author: User:pschemp, licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license.

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