Today’s papers carry the text of a pledge by David Cameron, Ed Miliband and Nick Clegg that a No vote in Thursday’s referendum is not a vote for the status quo.  Rather, they claim, a No vote will mean ‘faster, safer and better change’ to the devolution settlement than a Yes vote would bring.  This is the fourth commitment to further devolution by the Unionist parties – following the pledge by the Scottish party leaders in June, another by the UK party leaders in August, and the timetable for reform announced by Gordon Brown and endorsed by the other parties last week – and all three parties have, of course, produced individual sets of reform proposals.[1]  However, this latest pledge strengthens the commitment to reform by offering more information on the likely substance of a post-referendum cross-party agreement.  Accordingly, we can probably now say with some confidence that there will be some reform to the devolution settlement in the event of a No vote.

Nevertheless, important questions still remain about the nature of the constitutional alternative to independence that is being offered to voters in Scotland.

Do We Know What Exactly is on Offer?

There are four elements to the party leaders’ latest pledge.

First, they promise ‘extensive new powers for the [Scottish] Parliament’.  The pledge does not specify what these will be, but going by the individual party proposals, the key reforms are likely to involve taxation and welfare powers.  However, as regards further tax devolution, there are significant disagreements between the three parties on how far this should go.  The Liberal Democrats have proposed full devolution of income tax, capital gains tax, inheritance tax and air passenger duty, along with assignment of the proceeds from corporation tax.  The Conservatives have proposed full devolution of income tax, air passenger duty and (possibly) assignment of the proceeds from VAT.  The Labour party proposes only further partial devolution of income tax, and a possible power to set a lower rate of fuel duty for remote rural areas. 

On welfare powers, the Liberal Democrats propose that these should be entirely retained at the UK level, while both Labour and (more tentatively) the Conservatives have suggested devolution of Housing Benefit and Attendance Allowance, with the Conservatives also proposing a general power to ‘top up’ UK-wide benefits.  The problem here is that it is not clear how, in practical terms, individual benefits could be hived off from the overall welfare system, particularly given the move away from specific benefits towards Universal Credit.

Secondly, the pledge states that ‘the Scottish Parliament is permanent’.  Again, it is not clear what is intended here.  The Liberal Democrats proposed entrenchment of the Scottish Parliament via a formal declaration of the UK Parliament, while the Labour party proposed that the Sewel Convention (which prevents legislation by the UK Parliament on devolved matters, or amendment of the Scotland Act, without the Scottish Parliament’s consent) should be made legally binding.  However, without broader constitutional reform, neither of these would by themselves secure legal entrenchment of the Scottish Parliament.

Thirdly, the pledge implies that the Barnett formula, which secures a relatively generous allocation of public expenditure to Scotland, will be retained.  It does, however, stop short of clear guarantee – perhaps in recognition of the fact that this is a controversial issue elsewhere in the UK.  And in any case, the significance of the Barnett formula will be proportionately reduced the greater the degree of fiscal devolution. 

Finally, the pledge contains a statement of the ‘purposes’ of the Union.  The party leaders ‘agree that the Union exists to ensure opportunity and security for all by sharing our resources equitably across all four nations to secure the defence, prosperity and welfare of every citizen.’  This picks up on an idea proposed by the Liberal Democrats and by Gordon Brown that there should be a declaration of ‘principles of Union’ to guide future development of devolution, and (presumably) assist in resolving conflicts over the allocation of powers between Westminster and Holyrood.  As things stand, however, it is not clear what legal status, if any, such an agreement on the ‘purposes’ of the Union would have.  Moreover, the statement agreed by the party leaders is so vague and bland as to be little help in assisting with the kinds of detailed disputes over which powers should be reserved and which devolved which have arisen in the past and which are likely to recur in future.

There are a variety of other specific reform proposals which appear in the different parties’ devolution proposals.  For instance, Labour and the Liberal Democrats have recommended reforms to the machinery for inter-governmental relations to enhance partnership working.  All three parties have called for reforms to local government in Scotland.  And the Conservatives have proposed reforms to the internal workings of the Scottish Parliament and to the civil service in Scotland.  It is still not clear whether any of these wider issues will be included in post-referendum reforms, nor whether more powers for the Scottish Parliament might be conditional on agreement to these broader changes.

Can the UK Party Leaders Commit to Further Reform?

Assuming that that agreement can be reached on the content of further reforms to devolution, is the pledge by the party leaders a guarantee that such reforms will in fact be implemented?  After all, one of the reasons why the UK government rejected the Scottish Government’s suggestion that there should be a second question on more devolution on the referendum ballot paper was that changes to the devolution settlement could not legitimately be agreed without a UK-wide process.  At the very least, any changes will inevitably require the consent of the UK Parliament and the Scottish Parliament, whether in the form of new primary legislation, or of Orders under the Scotland Act 1998 or the Scotland Act 2012.

In reality, the party leaders probably can ensure, though the operation of the party whips, that sufficient of their members will back any legislative proposals that emerge from a post-referendum agreement process.  Nevertheless, given that we know that there is considerable opposition amongst both Labour and Conservative backbenchers to the transfer of any more powers to Scotland, and likely unhappiness in the Welsh Assembly (and perhaps also the Northern Ireland Assembly) about further privileging the Scots, any legislative proposals can expect to face opposition in the House of Commons, and perhaps especially in the House of Lords.  Given that the Scottish Parliament will remain under the control of the SNP after the referendum, we might also expect that Holyrood will try to use its consent power to seek stronger powers and/or to remove proposals that the SNP does not like, as occurred in relation to the Scotland Act 2012.

Is the Proposed Timetable Feasible?

Given the ongoing lack of agreement on the details of reform, as well as the likelihood of opposition, the timetable proposed by Gordon Brown for post-referendum reforms to be implemented seems extremely ambitious.  The proposal is that cross-party talks would be convened immediately after a No vote in the referendum, with a view to producing a White Paper by the end of October and draft legislation by January 2015.  Since there would then be less than three months before the dissolution of the UK Parliament on 30 March 2015, there seems little realistic chance of legislation being enacted before the General Election on 7 May.  Nor would it be desirable for an important constitutional reform measure like this to be subject to such a truncated period for public consultation and parliamentary scrutiny.

In fact, this does not appear to be what is envisaged.  Instead, the proposal seems to be that the three main parties would commit in their election manifestoes to enacting the agreed draft legislation in the first session of the new Parliament.  However, postponing reform until after the 2015 election adds a new element of political uncertainty.  It is unclear whether manifesto commitments would be honoured if, for instance, the proposals became a major point of contention in the election campaign or if UKIP secured significant electoral support. 

Are the Powers On Offer Likely to be Adequate?

Assuming that the parties can agree on a set of proposals for reforming the devolution settlement and get them through the legislative process intact, are they likely to make a substantial difference to the powers of the Scottish Parliament?

Although the media routinely refer to the alterative to independence as ‘devo max’, it seems clear that even the most expansive version of any likely agreement between the parties would fall far short of ‘full fiscal autonomy’, and an even longer way short of giving the Scottish Parliament powers to engage in meaningful reform of the welfare system.  To the extent that the referendum debate has unleashed a desire on the part of the Scottish people for fundamental social and economic reform, these proposals would not allow that desire to be fulfilled by the Scottish Parliament. 

Indeed, there is a risk that the Scottish Parliament could in practice be more tightly constrained than it is at present.  As already noted, an increase in fiscal autonomy necessarily implies a reduction in the relatively generous financial consequences for Scotland from the Barnett formula.  During the referendum campaign, the Scottish Government has sought to justify that generous treatment by pointing out that Scotland generates more in tax revenues than it receives by way of public expenditure.  However, that favourable tax position is largely attributable to the assignment of a geographic share of oil and gas revenues to Scotland.  Since there is no proposal to assign or devolve these revenues to Scotland, a Scottish Parliament with enhanced tax raising powers could find itself in a weaker financial position.  Indeed, the desire to rein in the Scottish Parliament’s spending power seems to be a key reason why the Conservative party is relatively keener than the Labour party to extend Holyrood’s fiscal powers.

Moreover, as Paul Cairney has argued, the devolution of income tax by itself gives the illusion of greater fiscal autonomy than it actually brings.  For one thing, the Scottish Government would have limited power to balance changes in income tax with changes in other taxes, so as to enable it to influence social and economic behaviour.  For another, income tax is a tax with particularly high political salience, making it especially difficult to increase.  In the context of ongoing Union, it would also be politically difficult to maintain different income tax levels from elsewhere in the UK.

Is Reform Likely to Produce a Stable Constitutional Settlement

What is missing from the party leaders’ pledge is any acknowledgment of the implications of further devolution for Scotland for the governance of the rest of the UK.  As is well-known, the UK’s current territorial constitution is highly asymmetric: there are different levels of devolution to Scotland, Wales and Northern Ireland and none in England.  This is a situation which is potentially highly unstable, as the different devolved nations play catch-up with one another.  It is also a situation with high potential for territorial resentment.  We see this, for instance, in concern over the perceived unfairness of the Barnett formula, and in the so-called ‘West Lothian Question’, which asks why Scottish (and Welsh and Northern Irish) MPs should be able to vote on issues in the UK Parliament which affect England only.  This latter problem stems from the lack of institutional differentiation between the governance of England and the governance of the UK.  But its flip side is equally problematic – the inbuilt risk of conflating the interests of the UK with the interests of England.

There has been some discussion during the referendum campaign of establishing a constitutional convention in the event of a no vote to examine the broader territorial constitution, and some interest in a potential federal solution.  However, there are significant challenges in finding a stable, long-term constitutional solution for the UK.  More importantly, the absence of any such promises from the party leaders’ pledge suggests that broader constitutional reforms are unlikely to be a high political priority.  In the meantime, stronger powers for Scotland are likely simply to exacerbate existing asymmetries at the risk of further stoking territorial resentments. 

Conclusion

The ratcheting up of the unionist parties’ promises on further devolution suggests a belated realisation that keeping a second question on this topic off the referendum ballot paper was a tactical mistake.  We have known all along that there would have been considerable public support for a half-way house between independence and the status quo, and over the course of the long referendum campaign it might well have been possible to work out some of the problems in the current proposals that have been identified here. 

In contrast, by introducing a de facto third option at this very late stage in the referendum process – and very obviously in response to tightening opinion polls – the unionist parties may well discover that their proposals are ‘too little too late’ to stop the momentum towards a Yes vote.  Alternatively, if the No vote does hold up, and the proposals are implemented, it might be a case of ‘legislate in haste, repent at leisure’.

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