On Friday 5 June, the Constitution Unit and the Wales Governance Centre jointly sponsored a conference of politicians and academics on ‘Devolution and the Future of The Union’ at the British Academy. It followed up a series of separate reports by them and by the Bingham Centre for the Rule of Law and the Institute for Government, urging an end to the UK’s government’s piecemeal approach to devolution. But the Scotland Bill’s second reading in the House of Commons on Tuesday made it clear that the political parties are not rushing to heed the academic advice. Brian Walker reflects on the differences between the two agendas.
The two rival victors in the general election have made opening moves over the future of the United Kingdom. After the second reading debate, government sources let it be known that the Scotland Bill based on the Smith Commission report was all Scotland was going to get this session, while the SNP played down full fiscal autonomy as one of its early aims. But this still leaves plenty to dispute. SNP demands for ’Smith plus’ – in the shape of further powers on job creation, taxation, welfare and wages – were left hanging. No clue was offered as to how the balance would be negotiated between pooling and sharing at UK level, and the extensive new fiscal powers being awarded to Holyrood. While the Barnett formula which disproportionally benefits Scotland remains in place, the government’s position contains the implicit challenge: if you want to take public service provision further, pay for it yourselves.
Fiscal devolution: Barnett and other issues
At the conference, it was the English local government expert Tony Travers who put his finger on the issue likely to feature more prominently than purely constitutional matters. ‘The Conservative aim of shrinking of the state to 36% of GDP raises big questions of how to sustain public services’. It is hardly shock news that there will be no increase in subvention levels from Westminster for further devolution under the Chancellor’s latest programme of fiscal consolidation. In his much-vaunted ‘Northern powerhouse’ plan, budgets will be concentrated for maximum effect, not increased. Fiscal tightening has already aggravated the stand-off between Westminster and Cardiff Bay over the ‘unfairness’ of Wales’ Barnett deal, and it has produced an anti-austerity rebellion at Stormont which could threatened the survival of the power sharing institutions. From the start of the parliament, political tensions over devolution seem set to rise, with unpredictable results for the future of the UK.