Government and Politics


Developing Devolution

Alan Trench

Devolution and the UK’s ‘territorial constitution’ has become one of the most significant and fast-moving areas of politics since 2010. This has been driven by two factors. One is the Conservative-Liberal Democrat Coalition government that took office at Westminster after the May 2010 UK election failed to give any party a majority. That government was committed to a rapid policy of reduction in the budget deficit and the national debt, as well as a different approach to public services and the welfare state – one emphasising individual choice of providers, and a greater role for the voluntary and private sector, than its Labour predecessor had. This change of government meant that there were not just differences of political composition between UK and all three devolved governments, but also in what they wanted to do with their powers.


The second factor making devolution important was the 2011 devolved elections in Scotland, Wales and Northern Ireland. In particular, the Scottish National Party (SNP) won a majority in Scotland, and formed a government committed in principle to independence and more directly to holding a referendum on independence during its current term. That has meant that the break-up of the United Kingdom becomes a meaningful prospect, to the alarm of politicians from Labour, Conservative and Liberal Democrat, the three unionist parties.


This article will look at how devolution has developed across the UK since 2010, and what the key issues now are from four different points of view: Scotland, Wales, Northern Ireland, and the UK Government and Parliament, at the centre. In this, it will focus principally on institutional issues, rather than party politics. It covers events up to December 2011.


Where Scotland ends up, constitutionally, will affect not just Scotland but also the whole of the United Kingdom. There is strong public support for much greater devolution there, but much more limited support for independence. Over many years, the annual Scottish Social Attitudes surveys confirm that the most popular constitutional option is devolution with tax-setting powers within the UK. However, the outcome of the constitutional debates will depend on how the various options are presented to the public. Scottish independence would be a great failure on the part of UK politicians to understand and deliver what the Scottish people clearly want: extensive self-government within the Union.


Scottish devolution was designed never to produce a majority government. The ‘additional member system’ used for elections to the Scottish Parliament was intended to ensure all parties were represented at Holyrood, but it was not foreseen that any party would win a majority. The SNP succeeded in doing so in 2011, winning 69 seats – a majority of four in the 129 seat Parliament, after running a very effective campaign but facing a very poor one from Labour and poor performances from both Conservatives and Lib Dems, seen as a response to the unpopularity of the UK Coalition.


Constitutional debates in Scotland have been underway since 2007. The SNP entered office then with a commitment to introduce a referendum bill (which it did not deliver), following a wider constitutional debate. The ‘National Conversation’ was launched in August 2007 and ended with a white paper ‘Your Scotland Your Choice’ in November 2009. The white paper presented four options for the future: the status quo of devolution with minimal tax powers, the ‘Calman Commission’ package of somewhat extended devolution (discussed more below), ‘full devolution’ with Scotland controlling all policies except defence, foreign affairs and economic management, while remaining within the Union, and outright independence: Scotland becoming a separate state, within the European Union, but retaining the Queen and her successors as heads of state.


The ‘Calman commission’ was set up by the three unionist parties in response to the Scottish Government’s constitutional initiative, in March 2008. It was formally set up by the Scottish Parliament and UK Government, and had close links to the Labour UK Government as well. Its report in June 2009 recommended a number of minor changes to the scope of devolved and non-devolved matters – devolving control over drink-driving limits and airguns, for example. It also proposed a limited amount of tax devolution to Scotland, based mainly on reducing UK income tax for Scottish taxpayers by 10 percentage points, and allowing Scotland to fill that ‘tax space’. (The block grant to Scotland would be cut, so Scotland would have to levy some tax to make up the gap.) This system was meant to introduce ‘fiscal accountability’, though it would mean Scotland would raise only around 35 per cent of devolved public spending, even taking into account local taxation – council tax and non-domestic rate – which the Scottish Parliament controls indirectly.


The UK Government did not rush to implement the Calman proposals. A white paper from the Labour government in November 2009 produced a watered-down version. The Coalition committed itself to implementing the proposals, and introduced a Scotland bill into Parliament in November 2010. That bill also needs the approval of the Scottish Parliament, and has received two sets of consideration: by the old Parliament in early 2011, which gave it qualified approval but reserved the right to reconsider it, and by the new one starting in September 2011. The UK Government has refused to amend the bill to extend devolved powers – the Scottish Government has sought powers over corporation tax and excise duty.


Particularly since the 2011 election, much attention has focussed on ‘full devolution’, or ‘devolution max’ as it is also called since then. This attracts the SNP as it would give Scotland a huge range of autonomy. It also attracts some unionists, as they see it as a way of keeping Scotland within the Union. Its political supporters include Sir John Major, Labour peer and former MSP George Folks, and newspaper columnist Simon Jenkins. This would involve ‘fiscal autonomy’: Scotland setting and collecting all taxes within Scotland, and sending to London a contribution to pay for common UK public services. That would end problems caused by higher levels of public spending in Scotland, as this would be a matter for Scotland to decide for itself. However, it would imply the end of a UK-wide system of social security and welfare benefits, as Scottish welfare would be paid for from Scottish tax revenues. There are serious concerns about how workable it would in fact be as well. In any case it would create a very asymmetric, unbalanced union, held together by convenience more than anything else.


There have also been disputes about the SNP’s proposed referendum. The Scottish Government proposed a referendum would be held before 2016, which would put two questions to voters: in essence, ‘Should the Scottish Parliament have more devolved powers or not?’, and ‘Should those powers be extended to include independence?’ The very idea of a referendum was politically controversial, and raised serious legal problems about whether it would be within the Parliament’s power to hold such a referendum or not. Some voices in London urged the UK Government to call its own referendum much sooner instead. How questions about a referendum are resolved will be a major issue for the first part of 2012.


Northern Ireland

One big constitutional change has already happened in Northern Ireland; the devolution of justice and policing, in April 2010. That took a long time to happen, and remains difficult there because of concerns about which party should hold the justice ministry. (Unionists are determined not to see it pass into Sinn Fein’s hands, given Sinn Fein’s historic links to the IRA.)


Northern Ireland has been largely a bystander in the debates about devolution finance. Its main concern has to been to seek the devolution of corporation tax. This would make it easier for Northern Ireland to compete economically with the Republic of Ireland, where corporation tax is only 12.5 per cent, but would be difficult practically and financially (as Northern Ireland’s block grant would have to be cut to allow for it). There are also political problems, as it would be hard to devolve corporation tax to Northern Ireland but refuse to do so to Scotland. So far, no official decision has been announced, but official discussions about the practicalities of devolving it are underway.



In Wales, the most important political decision came with the referendum result in March 2011. This gave a ringing endorsement to the principle of Wales have extensive devolved powers over primary legislation. It also emphasised that devolution was the ‘settled will’ of the people of Wales, to borrow John Smith’s phrase. This therefore significantly altered the dynamic of the relationship between Cardiff and London, with the balance moving significantly in Cardiff’s favour.


From the newly-renamed Welsh Government’s point of view, the referendum result largely put an end to constitutional discussions. While it was unhappy about bearing cuts in its block grant imposed from London, it had little enthusiasm for the devolution of fiscal powers. It sought two changes: making the block grant into a ‘fair grant’, in line with the recommendations of the Holtham Commission set up by the ‘One Wales’ Labour-Plaid Cymru coalition in 2008, and seeking powers to borrow money to finance capital projects. That was not London’s view. The UK Coalition Government’s Programme for Government did not contain a commitment to ‘fair funding’, but did promise ‘a process similar to the Calman commission for the Welsh Assembly’ if there was a ‘Yes’ vote in the referendum on the Assembly’s legislative powers.


After much debate about terms of reference, the ‘Silk commission’ was announced in October 2011. Its main concerns are with ‘fiscal accountability’ for the National Assembly – tax issues, not ‘fair funding’ or borrowing powers, which the Welsh Government intends to pursue directly with the UK Government. That will occupy the Commission until the middle of 2012. In 2012-13, it will also look at whether further functions should be devolved to Wales. Top of the list there are youth justice, and other legal issues including the idea of creating Wales as a separate legal jurisdiction, favoured by many lawyers given the differences that already exist between laws in England and Wales. Another important set of issues, about the size of the National Assembly and the system used to elect its members, has been deliberately kept off its agenda altogether.



England has always been outside the scope of devolution Labour put in place in the late 1990s. Labour’s efforts to establish an elected regional tier of government in England soon foundered, with the referendum voting down an elected assembly in North East England in 2004 finally killing the scheme off. The only part of this plan that was implemented was the creation of a Mayor for London and London Assembly, with a high profile but limited powers mainly over transport and strategic planning.


The Coalition’s plans have been rather confused. It has dismantled much of the regional tier of government, including the regional development agencies Labour established, and the government offices for the regions established under John Major’s government. It has pushed a ‘localism’ agenda for England, supposedly meant to strengthen local government, but weakening it in some key respects, notably over education (free schools stop local education authorities planning for their areas), and planning (with a much more pro-development approach). It has also promised another commission, this time on the ‘West Lothian question’ (the anomaly that means Scottish and Welsh MPs can vote on matters affecting England but not, thanks to devolution, their own constituencies). The Conservatives have long been worried about this, and keen on securing ‘English votes for English laws’. The government has, however, been in no hurry to set that commission up. Although an announcement was expected no later than November 2011, it will now not happen until early in 2012.



The UK position


What has been missing from devolution debates since 2010 is much sense of a coherent strategy from the centre about what sort of a country the United Kingdom should be – what its citizens have in common as well as what makes them different from one another. There has been emphasis on some traditional symbols of British unity, such as the Royal family or the armed forces, but little that is more systematic or that takes into account the impact of changes in one part of the UK on another. Scottish concerns have been to the fore, because of the threat to the Union that they pose and the immediate pressing issues of the Scotland bill and a possible independence referendum. The failure either to offer Scotland and Wales what voters there want, or to offer a strong positive vision of the Union for the future, suggest serious weaknesses in how the UK might respond to a rapidly changing world.




Even in the last two years, devolution has developed very rapidly. It will continue to change in the coming years, to deliver greater financial devolution, no matter what else happens. Beyond that, there are now major questions about the future of the UK. How would Wales, Northern Ireland or parts of northern England respond to a Scotland as autonomous as ‘devolution max’ would imply? If that happened, what would keep the Union together? These are big questions for the future of everyone who lives in Britain, but the answers are not at all clear.