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| Smith Commissioners representing SNP, Green, Labour, LibDem and Conservative Parties |
“Following the referendum we have a willingness, shared by all five of Scotland’s main political parties, to strengthen the powers of the Scottish Parliament, within the UK.
“My job is to create a process through which politicians, civic institutions and the Scottish public can come together, work together and agree the detail of what those powers should be.
“To that end, I am working to one aim: to produce a unifying set of proposals by the 30 November 2014.”
Lord Smith of Kelvin
The committee of Yes East Kilbride responded to the Commission's call for submissions by forwarding the following comments.
1 Our perspective on the Commission
1.1 This Commission is just the latest in a number of attempts to define a stable settlement for Scotland in the United Kingdom. These date back to at least 1885, with the establishment of the Scottish Office and the modern post of Secretary of State for Scotland. At this time, the growing importance of government in all aspects of society refocused attention on the undertakings in the Treaty of Union intended to safeguard Scotland’s unique identity after the union. The following year the Scottish Home Rule Association was formed.
1.2 Westminster has since made many attempts to redefine this relationship on its own terms:
· adjusting the position of the Secretary of State for Scotland from that of a Cabinet attendee to a member of the Cabinet in 1926;
· appointing a Royal Commission in 1969 that reported in 1973, but on whose proposals no action was taken despite being endorsed by the majority of Scots voters in a referendum;
· re-establishing the Scottish Parliament in 1999, with minimal financial authority or accountability and a set of powers defined by reserving broad areas of policy to Westminster or restricting Holyrood’s capacity to amend or repeal specific pieces of legislation; and,
· through the representatives of the pro-UK parties in the Scottish Parliament, establishing a second commission in 2008, whose 2009 report formed the basis for the Scotland Act 2012; an act conceded by its authors to have been superseded before it was enacted.
1.3 Despite these efforts, the movement towards Scottish Independence has continued to grow, with each new Westminster-driven ‘solution’ seeing yet another pro-independence milestone reached shortly thereafter. It seems clear that the Scottish people consider Scotland to be a
1.4 If the outcome from this Commission is to be different from that of its predecessors, it must turn the viewfinder round. The Commission must avoid looking at this issue from Westminster’s perspective – “what is the minimum we need to do to keep the Scots in the union”. It should look at the issue from Scotland’s perspective – “what should we do for ourselves, and what must be done jointly if we are to maintain the integrity of the union in a manner that benefits and respects all its participants”.
1.5 The justification for the Commission taking this perspective can be found in statements from all of the UK political parties over the years, and right down to the closing days of the referendum. This view was clearly articulated by Margaret Thatcher, the Prime Minister who, having reviewed the outcome of the 1979 referendum, chose to do nothing, and, in so doing consigned her party to the margins of Scottish politics until rescued by the coming of the Scottish Parliament and its system of proportional representation. Mrs Thatcher said:
“As a nation, they (the Scots) have an undoubted right to national self-determination; thus far they have exercised that right by joining and remaining in the Union. Should they determine on independence no English party or politician would stand in their way, however much we might regret their departure. What the Scots (nor indeed the English) cannot do, however, is to insist upon their own terms for remaining in the Union, regardless of the views of the others.” Margaret Thatcher, The Downing Street Years
1.6 It is a moot point that Scotland’s entry to the union was the work of a small band of decision-makers with no democratic mandate, and led to riots when the news broke. However, on 18th September, Scots were offered the opportunity to regain their independence only because they voted for a party pledged to achieving significant change in how Scotland is governed.
1.7 Long-run opinion poll data demonstrates that the clear majority of Scots want a form of government that is at or near independence, or ‘near-federalism’ as stated by Gordon Brown. Two tables from the records of the Scottish Social Attitudes Survey demonstrate this point:
1.8 This table demonstrates that, over a four-year period a remarkably stable, minimum of 60% of Scots supported independence or the ‘devomax’ option, whereby only Defence and Foreign Affairs lie with Westminster. These positions were taken even against the option of devolving everything bar Defence and Foreign Affairs, Taxes, and Benefits.
Who should make decisions for Scotland?
1.9 The following table demonstrates that, over an even longer period, Scots have consistently rejected a Westminster-driven welfare system, with a minimum of 57% wanting Holyrood to make the most important decisions, as against a maximum of 25% preferring Westminster. It is worth noting that the first three surveys in this table were conducted with a Labour Government in Westminster, so this is not simply a ‘Scots reject Tory policies’ short-term reaction.
Who ought to make most important decisions for Scotland about welfare benefits level?
1.10 Considerable time and effort was expended by civic Scotland in the run up to the referendum, promoting inclusion of a ‘more powers’ option on the ballot paper. Following considerable opposition by the UK Government, this was rejected. However, the response of the pro-UK parties to the rising tide of support for Yes in the latter days of the referendum led them to make promises of a considerably revised union that must now be redeemed.
1.11 In any referendum or electoral campaign, parties enter into a debate determined to emerge with as much of their opening position intact as is possible. Their policy commitments should remain consistent throughout the campaign, unless it is clear that these are not gaining acceptance with the electorate, in which case they may adjust their position. In interpreting the true mandate of the winning side following an election or a referendum we must give more weight to statements made at the end of the campaign, just before people vote, than long-forgotten positions set out in background papers.
1.12 The vote on 18th September took place after the extraordinary (perhaps unprecedented) events of 9th September, when, instead of appearing at Prime Minister’s Questions, David Cameron, accompanied by his Deputy PM, and the Leader of the Opposition, abandoned Westminster and travelled to Scotland, and a second event on 16th September, when these same leaders issued a joint ‘Vow’ to the people of Scotland, delivered on the front page of one of Scotland’s leading papers and repeated by other papers and the broadcast media, which said:
1.13 “The Scottish Parliament is permanent and extensive new powers for the Parliament will be delivered by the process and to the timetable agreed and announced by our three parties, starting on 19th September.”
1.14 In his last speech before the referendum vote, the Prime Minister said:
“'Business as usual’ is not on the ballot paper…The status quo is gone. This campaign has swept it away. There is no going back to the way things were”
1.15 In the final days of the campaign, many of those backing a No vote across all of the major pro-UK parties echoed such views. It is for this reason that, in interpreting the term ‘extensive new powers’, the Commission must start from the premise that the three ‘opening position papers’ published by the pro-UK parties in the run up to the referendum, like the 2012 Act, have been superseded. Any attempt to rely on one of these papers, or a simple synthesis of their provisions (if such is even possible) as the basis for going forward would be an act of bad faith; an attempt to negate the change in the position of the No campaign driven by the impact of the campaign.
1.16 The ‘views of the others’, in Mrs Thatcher’s terms, are quite clear. Scots want substantially more autonomy than is in place at present, or will come into being with the implementation of the 2012 Act, and more than was on offer in any of the position papers published by the pro-UK parties before the referendum. The view of the rest of the UK, as expressed by the pro-UK leaders in the closing days of the referendum debate, is that they are committed to responding positively to Scotland’s desire for a radically different union in order to seek greater stability for the UK. They have tasked the Commission to deliver an outline of that radically different union.
1.17 The alternative to delivering a radically different union is that the Smith Commission becomes just another stepping-stone on the path towards the breakup of the UK. While Yes East Kilbride would welcome that outcome as the best way forward, we believe that the people of Scotland deserve to be treated with respect, and the UK parties must live up to their campaign promises. That is why we have made this submission.
2 A new constitutional settlement
2.1 In 1707, Scotland was undoubtedly a separate and independent nation when its representatives negotiated the Treaty of Union and embedded in its provisions protection for the expressions of Scottish nationhood. At no point since 1707 has that status of Scotland as a separate nation been seriously challenged, and at no time since then have the Scottish people been asked to endorse a contrary view; nor were they in the 18th September referendum.
2.2 Following the announcement of the referendum result there was a call by Jack Straw MP, former Labour Home Secretary, for Westminster to restate the Union, permanently enshrining it in a modern legal framework designed to prevent Scottish independence. Such a proposal played no part in the referendum process. However, as evidenced by Jack Straw’s intervention, there are those within the UK Parliament who would follow the example of the Spanish Government and block any future expression of the views of the Scottish people on this question.
2.3 The Commission must take the opportunity to recommend statutory recognition by the UK Parliament for the 1989 Claim of Right, signed by all but one of Jack Straw’s then Scottish colleagues and their Liberal Democrat colleagues and endorsed by the overwhelming majority of the Scottish Parliament in 2012, which stated:
“We … do hereby acknowledge the sovereign right of the Scottish people to determine the form of Government best suited to their needs...”
2.4 There was much debate prior to the referendum about the competence of the Scottish Parliament to legislate for a referendum on independence. All parties involved in the Commission have expressed the view that Scotland is a separate nation and should continue to be so; none has yet articulated agreement with the opinion of the UK Government’s legal advisers that Scotland was ‘extinguished’ in 1707.
2.5 Holyrood is now widely accepted as the focus for the expression of Scotland’s political persona. Johann Lamont articulated this most recently, in her resignation statement, when she said:
“.. colleagues need to realise that the focus of Scottish politics is now Holyrood, not Westminster.”
2.6 That being the case, it is time to acknowledge that the restriction on Holyrood’s capacity to call a referendum on independence should be political, subject to the will of a sovereign people, not legal, subject to the decision of a court.
2.7 The Section 30 order that passed to the Scottish Parliament the power to hold a referendum contains a time limit of December 2014. Instead of allowing them to die, the Commission should recommend incorporation of its provisions into a revised Scotland Act. In addition to clarifying that the Scottish Parliament has an entrenched position in the UK Constitution, this should also entrench Holyrood’s legislative competence to call a referendum on independence without the approval of the Westminster Parliament or the UK Government.
2.8 Such a change will properly establish the sovereign right of the Scottish people to determine the form of Government best suited to their needs in a modern democratic context. The right of Northern Ireland to choose democratically to leave the UK and reunite with the Irish Republic, enshrined in the Northern Ireland Act 1998, offers precedence for this recognition. However, the process by which this can be exercised in Northern Ireland reflects that community’s troubled past and does not form an appropriate precedent in the Scottish context.
2.9 We commend the submission by Andrew Tickell on this point.
3 Specific comments on the principles articulated by the Commission
3.1 We welcome the set of principles agreed by the Commission to guide your work, and have used these principles as the basis for more specific comments. It would be appropriate for the Commission to seek wider views on the principles, including from civic Scotland.
3.2 Principle 1: Form a substantial and cohesive package of powers, enabling the delivery of outcomes that are meaningful to the people of Scotland.
3.2.1 We welcome the commitment to produce a substantial and cohesive package of powers, enabling the delivery of outcomes that are meaningful to the people of Scotland.
3.2.2 The Commission must learn from the experience of the first 15 years of devolution – in this respect, the Scottish Government will be a source of significant information about where powers identified as devolved are stunted by their overlap with reserved powers.
3.2.3 The debacle of local government finance is a clear example. While nominally devolved to the Scottish Parliament, when change was advanced it was found that, because Council Tax Benefit was not devolved, changing the current regime would cost Scottish taxpayers hundreds of millions of pounds in extra payments and provide a windfall benefit to the UK Treasury.
3.2.4 Another example is Childcare, with responsibility for provision, funding, and regulation lying with the Scottish Parliament but tax credits, used by many parents to pay for their childcare, reserved to Westminster. Such overlapping arrangements are a recipe for confusion for providers and parents, waste, and poor planning and accountability.
3.2.5 One of the most significant areas of tension between the current devolution settlement and the will of the Scottish people has been in the field of Welfare policy. The imposition of the Bedroom Tax, which is both undesirable in principle and unhelpful in practice in relation to Scottish housing, is just one example of this conflict. Alongside greater flexibility of income sources, the Scottish Parliament needs to have greater autonomy in the fields of Welfare and Social Security. As evidenced above, the Scottish Social Attitudes Survey has long demonstrated support for devolved responsibilities for welfare, including benefits.
3.2.6 There has been much talk of the need to maintain a UK-wide minimum welfare guarantee. We consider that this can be achieved by amending the Scotland Act to give the Scottish Parliament a general competence in the field of welfare and social security, while preserving a UK-wide social security system from amendment.
3.2.7 The submission by Andrew Tickell spells out how this general competence can be achieved in terms of amendments to the current legislation.
3.3 Principle 2: Strengthen the Scottish devolution settlement and the Scottish Parliament within the UK (including the Parliament’s levels of financial accountability).
3.3.1 We welcome the commitment to strengthen the Scottish Parliament and increase its financial accountability. However, if the parliament is to be stronger as well as more accountable, it must have flexibility in how it manages its sources of income and the impact its decisions have on the Scottish economy.
3.3.2 The focus on Income Tax as the sole major tax to be devolved is not appropriate if the parliament is to be strengthened as well as made more accountable. With its high visibility, Income Tax is a major driver of accountability, but changes in Income Tax also have little impact on economic growth.
3.3.3 If Holyrood becomes dependent on Income Tax as its sole major source of revenue, and economic levers remain at Westminster, there will be no opportunity to maintain public services by stimulating economic growth because the public finance benefits will still largely flow to the Westminster Treasury. In these circumstances, the pressure on Income Tax levels in Scotland will only be in an upwards direction. This would drive up dissatisfaction with and disengagement from the Scottish Parliament, an outcome that none of the parties to the Commission should wish to see.
3.3.4 The creation of Revenue Scotland means that the Scottish Parliament can quickly gear up its own tax collection capacity to administer additional devolved taxes. Currently, the UK Government controls some twenty-five taxes and other sources of income while the Scottish Parliament has partial control of income tax and control of just two minor taxes. When the Scotland Act 2012 is fully implemented this will increase the level of control over income tax, but subject to considerable constraints, and increase the number of minor taxes to four.
3.3.5 There has been much talk of devolving with a purpose. The purpose in devolving a basket of taxes is precisely to allow the Scottish Parliament to meet the aspiration set out in the first principle - the delivery of outcomes that are meaningful to the people of Scotland, which devolving only Income Tax, or together with just one or two minor taxes is unlikely to achieve.
3.3.6 Some of the taxes and other levies are closely associated with policy responsibilities that are either already devolved to the Scottish Parliament or should be as part of the Commission’s proposals. Devolving these taxes and levies would allow the Scottish Parliament to develop coherent policy and revenue packages that reflect Scotland’s unique assets and resources, and the preferences of Scottish voters.
3.3.7 In this respect, we endorse the submission by the Scottish Government as regards a broad devolution of tax powers.
3.4 Principle 3: Aim to bring about a durable but responsive democratic constitutional settlement, which maintains Scotland’s place in the UK and enhances mutual cooperation and partnership working.
3.4.1 We endorse the focus on a responsive settlement founded on cooperation and partnership working. However, the Commission must recognise that co-operation and partnership both start from the assumption of separate, unique, individuals combining in a common endeavour.
3.4.2 The language of incorporation and ‘Scotland extinguished’ heard during the referendum has no place in a package of proposals founded on this principle; nor does the right of an overweening partner to dictate terms. We ask the Commission to reject the proposition that the Scottish people, expressing their sovereign voice, have no right to withdraw their co-operation if the basis on which co-operation is taking place, or the outcomes it is delivering, are no longer acceptable.
3.4.3 Our comments on a new constitutional settlement are directly relevant to this principle. Any “durable but responsive democratic constitutional settlement” in the modern, democratic context must start from the position articulated in the Claim of Right. The decision makers in Westminster must work for and earn the continued participation of all parts of this voluntary union.
3.5 Principle 4: Not be conditional on the conclusion of other political negotiations elsewhere in the UK.
3.5.1 We endorse this principle, which is reflective of the work of the Commission as a continuation of the referendum process. Those speaking on behalf of the UK Government, and those leading the No campaign consistently stated that this referendum was a decision for the Scottish people. In this respect, it is difficult to see how the submission by the Liberal Democrats easily fits with the work of the Commission, relying, as it does, on “a route map to a federal future for the United Kingdom”. Given the timetable to which the Commission is working, it must not divert into exploring federalism for the whole UK.
3.6 Principle 5: Not cause detriment to the UK as a whole nor to any of its constituent parts.
3.6.1 Our view is that this principle needs reconsideration.
3.6.2 One of the signs of the fundamental failure of the UK to operate in the interests of all of its citizens is the disparity between the constantly growing prosperity of London and the South East as against the position of other nations and regions of the UK. The nexus of the state capital, a highly centralised government machine, cultural centre, a global financial centre, and the location of most company headquarters creates the kind of “giant suction machine, draining the life out of the rest of the country” so famously described by Vince Cable.
3.6.3 If one of the aims of devolution is to spread economic prosperity more widely across the country, it is difficult to see how any substantial devolution of power can be anything other than damaging to that region’s relative dominance of the UK economy. The UK Government’s response to Lord Heseltine’s review “No stone unturned”, stated:
“Over recent decades, London and the south-east have been relied on as the primary source of economic growth in the UK. Despite significant investment in the regions, London, with around 13 per cent of the population, produces around 21.5 per cent of UK Gross Value Added (GVA), and has the highest GVA per head of all regions. But countries can be more successful when they are driven not just by their capitals, but by multiple thriving centres each with their own strengths.”
3.6.4 Without commenting on the correct position as far as the rate of Corporation Tax is concerned, it is clear that, for example, the principle as stated could drive a decision not to devolve Corporation Tax because any diversion of future investment in HQ functions from London to Scotland may damage the London economy. The principle may have other unintended consequences in terms of favouring the status quo and needs reconsideration, or be balanced against other potential outcomes.
3.7 Principle 6: Cause neither the UK Government nor the Scottish Government to gain or lose financially simply as a consequence of devolving a specific power.
3.7.1 We agree with this principle, but recognise that, in relation to income, a decision as to whether this principle has been met can be problematic, particularly when set against the retention of the block grant through the Barnett Formula. The debate around the partial devolution of Income Tax now contained in the 2012 Act demonstrates this problem. This difficulty emphasises the need for Holyrood to have access to a range of sources of income, and not be reliant on a single major tax.
3.7.2 There will undoubtedly be transition costs associated with these changes. These must be managed in a way that reflects the referendum argument that Scotland benefits from the ‘pooling and sharing’ of resources and risk, and the funding mechanism should not put strain on the delivery of services in Scotland.
3.8 Principle 7: Be implementable; be compatible with Scotland’s and the UK’s international obligations, including EU law; and be agreed with a broad understanding of the potential associated costs.
3.8.1 We agree with this principle.
4 Conclusion
4.1 Yes East Kilbride is participating in this consultation out of respect for the views expressed by voters in East Kilbride, elsewhere in South Lanarkshire and across Scotland, many of whom voted No only in response to the clear shift in position adopted by the UK Government and those backing a No vote in the referendum campaign.
4.2 We take at face value the stated willingness of the rest of the UK, as expressed by the UK Government and other parties, to respond positively to the aspiration for a radically different union in which Holyrood exercises ‘extensive new powers’ significantly beyond those exercised at present, as delivered by the 2012 Act, or as envisaged in the position papers tabled by the pro-UK parties.
4.3 We ask the Commission to take this opportunity to apply a Scottish perspective to the nature of the union and to make recommendations on both powers and accountability that respond to the clearly stated aspirations of the Scottish people.
4.4 We also ask the Commission to propose a revised union, truly founded on principles of co-operation and partnership, in which the right of the Scottish people to exercise their sovereign voice is subject to democratic restraints and not to being overruled by the courts.
Yes East Kilbride
October 2014
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