2 The future shape of the Union
The
Vow and the impact of the Scottish referendum
7. The Scottish referendum was a highly significant
political event for the UK. 4,283,938 people were eligible to
vote in the Scottish independence referendum, and 3,623,344 votes
were cast, a turnout of 84.6 per cent. 1,617,989 (44.7 per cent
of valid votes cast) voted Yes; 2,001,926 (55.3 per cent) voted
No.[6]
8. The turnout of 84.6 per cent was the highest turnout
at a nationwide referendum or parliamentary election in Scotland
since the establishment of universal suffrage. 16- and 17-year-olds
were eligible to vote in the referendum, and by the date of the
poll 109,533 people in this age group had registered to vote.[7]
The very high turnout reflected the considerable level of voter
engagement with a referendum campaign which had lasted for over
two years. The significance of the referendum and its outcome
has been confirmed by the reaction to the result not only in Scotland
but in the rest of the UK, with greater levels of interest in
the way the Union is governed and the potential for the further
devolution of power down to localities in each nation of the UK.
UNDERTAKINGS ON FURTHER DEVOLUTION
9. During the referendum campaign the constitutional
future of Scotland in the event of a Yes vote appeared reasonably
certain. Less clear, until the latter stages of the campaign,
were the potential constitutional consequences of a No vote.
10. In June 2014 the leaders of the Scottish Conservative,
Scottish Labour and Scottish Liberal Democrat parties issued a
joint statement:
Power lies with the Scottish people and we believe
it is for the Scottish people to decide how we are governed.
We believe that the pooling and sharing of resources
across the United Kingdom is to Scotland's benefit in a partnership
of four nations in which distinct national identities can flourish
and be celebrated.
We believe that Scotland and the United Kingdom
have been strengthened since the advent of devolution.
We support a strong Scottish Parliament in a
strong United Kingdom and we support the further strengthening
of the Parliament's powers. The three parties delivered more powers
for Holyrood through the Calman Commission which resulted in the
Scotland Act 2012.
We now pledge to strengthen further the powers
of the Scottish Parliament, in particular in the areas of fiscal
responsibility and social security. We believe that Scotland should
have a stronger Scottish Parliament while retaining full representation
for Scotland at Westminster. Our common agenda can bring people
together from all of Scotland, from civic society and every community.
The Scottish Labour Party, the Scottish Conservative
and Unionist Party and the Scottish Liberal Democrats have each
produced our own visions of the new powers which the Scottish
Parliament needs.
We shall put those visions before the Scottish
people at the next general election and all three parties guarantee
to start delivering more powers for the Scottish Parliament as
swiftly as possible in 2015.
Our common endeavour will deliver a stronger
Scottish Parliament in a stronger United Kingdom.[8]
11. On 7 September the Chancellor of the Exchequer,
Rt Hon George Osborne MP, indicated that a 'plan of action' was
being developed to give more powers over taxation, spending and
benefits to the Scottish Parliament in the event of a No vote.
On 8 September the former Prime Minister, Rt Hon Gordon Brown
MP, set out a process and a timetable for achieving the delivery
of further powers to the Scottish Parliament, and on 10 September
the leaders of the main UK political parties travelled to Scotland
to campaign for a No vote. On that day the Leader of the House
indicated that the commitment to further powers for the Scottish
Parliament made by the party leaders were not statements of Government
policy:
The statements by the party leaders made on this
in the last few days are statements by party leaders in a campaignnot
a statement of Government policy today, but a statement of commitment
from the three main political parties, akin to statements by party
leaders in a general election campaign of what they intend to
do afterwards. It is on that basis that they have made those statements.[9]
12. A key moment in the debate immediately prior
to the referendum was the publication in a Scottish daily newspaper
of a commitmentknown as The Vowfrom the Prime Minister,
the Deputy Prime Minister and the Leader of the Opposition, made
on behalf of their parties, "to deliver change for Scotland".[10]
The three UK party leaders declared agreement on the following:
· That
the Scottish Parliament is permanent
· That, in the
event of a No vote in the referendum, "extensive new powers"
for the Scottish Parliament would be delivered by a process, and
to a timetable, agreed by the parties, beginning on 19 September
· Each party
will work to improve the way the UK is governed
· The UK exists
to ensure opportunity and security for all, by sharing resources
equitably to secure the defence, prosperity and welfare of every
citizen
· Expenditure
on the NHS in Scotland is a matter for the Scottish Parliament
Willie Rennie, Leader of the Scottish Liberal Democrats,
described to us the significance of The Vow:
[P]reviously we were having a kind of a Unionist
offer, in which each individual party would put its proposals
in its manifesto and if it won power it would implement those
proposals. It was a direct line from its commissions to implementing
its legislation. What changed was that it was going to be a cross-party
affair [
] and also there would be a consensus before the
general election.[11]
13. In evidence to us the Local Government Association
indicated the significance of the Scottish referendum campaign,
and, in particular, The Vow, for further transfers of power away
from Westminster:
Scotland's referendum campaign has illustrated
the political dynamic very clearly. The Yes campaign was as much
an anti-Westminster campaign as a nationalist movement. Even No
voters, while rejecting a nationalist independence agenda, demanded
greater ownership by Scots of decisions that affect their lives.
The referendum's outcome, underpinned by the "Vow" made
to Scotland by the three main UK party leaders, has exposed the
failure of the centralised UK model for all the countries and
communities of the Union, not just Scotland. The UK government
has conceded that the old way of doing business must end.[12]
Devolution proposals after the
Scottish referendum
14. Since the referendum in Scotland, proposals on
further devolution to Scotland, Northern Ireland and Wales have
been agreed upon in principle: legislation giving the Northern
Ireland Assembly the power to set the main rate of corporation
tax in respect of certain trading profits from April 2017 has
passed both Houses and awaits Royal Assent.[13]
The Government has also been taking forward a programme of decentralisation
within England which we examine further below.
SCOTLAND
15. Immediately after the result of the referendum
on independence for Scotland was known, the Prime Minister invited
Lord Smith of Kelvin to convene a commission comprising two representatives
of each of the five parties represented in the Scottish Parliament.
Lord Smith's terms of reference were
To convene cross-party talks and facilitate an
inclusive engagement process across Scotland to produce, by 30
November 2014, Heads of Agreement with recommendations for further
devolution of powers to the Scottish Parliament. This process
will be informed by a Command Paper, to be published by 31 October
and will result in the publication of draft clauses by 25 January.
The recommendations will deliver more financial, welfare and taxation
powers, strengthening the Scottish Parliament within the United
Kingdom.
Each of the parties represented in the Scottish Parliament
accepted the invitation to participate in the Commission.[14]
16. The UK Government subsequently published a Command
Paper setting out the published proposals of the three main UK
parties on further devolution to the Scottish Parliament,[15]
while the Scottish Government and the Scottish Green Party published
their own proposals.[16]
The Commission held nine plenary meetings, including a public
evidence session with representatives of civic institutions, and
Lord Smith held a number of bilateral meetings with his fellow
commissioners. Each party representative agreed to the proposals
set out in the Smith Commission Agreement, published on 27 November
2014.[17] On 22 January
the UK Government published a further Command Paper on implementation
of the Smith Commission Agreement, including draft clauses for
a Scotland Bill intended to be introduced early in the new Parliament.[18]
17. The Smith Commission Agreement proposes substantial
new powers for the Scottish Parliament, and the draft clauses
are intended to illustrate how these powers will be transferred
to the Parliament. We have already undertaken pre-legislative
scrutiny of the draft clauses with major constitutional significance
which are to implement Pillar 1 of the Agreement. Draft clause
1 purports to make the Scottish Parliament and Scottish Government
permanent institutions, draft clause 2 is intended to establish
in statute the convention that the UK Parliament will not normally
legislate on matters within the competence of the Scottish Parliament
unless the Scottish Parliament has consented to such legislation,
and draft clauses 3 to 9 make provision for the Scottish Parliament
to have powers over its own arrangements and operations, and to
have all powers in relation to elections to the Scottish Parliament
and to local government in Scotland. As we said in our earlier
report,
The draft clauses, taken together, represent
a major change to the United Kingdom's constitutional arrangements:
they provide for very substantial devolution of powers over income
tax and welfare to the Scottish Parliament, assignment to the
Scottish Government's budget of the first ten percentage points
of all VAT raised in Scotland, a wholesale revision of the fiscal
framework for Scotland within the UK, and new borrowing powers
for the Scottish Government.[19]
WALES
18. The Commission on Devolution in Wales (the Silk
Commission) was established in October 2011 with a remit "to
review the present financial and constitutional arrangements in
Wales" in two stages, first with respect to financial accountability
and then with respect to the powers of the National Assembly for
Wales. It reported on the two elements of its remit in November
2012 ('Silk I') and March 2014 ('Silk II') respectively.[20]
A bill to implement recommendations from Silk I was enacted in
December 2014 as the Wales Act 2014.
19. In October 2014 the leaders of the four political
parties in the National Assembly for Wales tabled, and secured
the Assembly's agreement to, a motion calling for the devolution
of further powers to Wales.[21]
The Secretary of State for Wales committed himself to bringing
forward proposals for further devolution on the basis of Silk
II: on 27 February 2015 he published a Command Paper setting out
the UK Government's proposals for further devolution to Wales.[22]
The proposals include a programme of work to establish a separate
legal jurisdiction for Wales.
NORTHERN IRELAND
20. On 23 December 2014 the political parties in
Northern Ireland, the UK Government and the Government of the
Republic of Ireland reached agreement on a number of measures
aimed at furthering the peace process in Northern Ireland, reforming
Northern Ireland institutions, restructuring the welfare and benefits
system in Northern Ireland and devolving certain fiscal powers,
including powers over the rate of corporation tax, to the Northern
Ireland Assembly.[23]
The Stormont House Agreement is the latest in a series of agreements
stemming from the 1998 Belfast Agreement which provide for further
devolution to the Northern Ireland Assembly and contribute to
the continuing operation of the Northern Ireland peace process.
The nature and process of further
devolution
21. The scale of the new powers promised by the political
parties to the Scottish Parliament in the event of a No vote in
the referendum surprised many, since the Government had not adopted
a policy on further powers to be offered in the event of a No
vote. There has been significant debate in Scotland over whether
the terms of the Smith Commission Agreement and the draft clauses
fulfil the broad promise of 'substantial new powers' for the Scottish
Parliament set out in 'The Vow'. Our colleagues on the Scottish
Affairs Committee have examined the provisions in detail and have
found that the promises in 'The Vow' have been met.[24]
22. We asked whether the broad offer of substantial
further powers to the Scottish Parliament should also be offered
to England, Wales and Northern Ireland. This would seem to be
a logical step in the development of devolution across the UK.
The evidence we received in return indicated practical difficulties
in offering similar levels of devolution to the rest of the UK,
arising from the asymmetric circumstances of the existing devolution
settlements. Akash Paun, of the Institute for Government, identified
a flaw in the premise of such a proposal:
The idea that devolution is about powers being
offered by the centre to parts of the country maybe is not always
the best starting point. My perception is that devolution should
be driven by a dialogue between the different levels of the different
parts of the countryit is not even about governments, of
courseabout how we want to divide the resources and functions
of the state.[25]
23. Professor Jim Gallagher, of Nuffield College,
Oxford, took issue with "the simple proposition that devolution
is good and therefore more devolution must be better", which
he said was not the right answer to the challenge set in finding
a new devolution settlement "that is consistent with the
maintenance of the union that was described and defended in the
campaign itself".[26]
The settlement which had to be found, he said, needed to be
consistent with the structure of the UK as a
political union, with the integrated economy of the UK, which
was defended during the campaign, and [. . .] a social union,
that is to say social solidarity inside the United Kingdom, because
without all of those the UK will not be stable in the long run.
That is what the people voted for, that is what they were offered
and that is what they should get.[27]
AN ASYMMETRIC SETTLEMENT
24. The asymmetry of the UK's present devolution
arrangements has long been recognised. The Institute for Government
reminded us that the four nations of the UK each have "very
different governance arrangements, powers and responsibilities",
a situation which long predated the present process of devolutionary
reform which began in the 1990s. Scotland has retained its own
legal and educational system since the 1707 Act of Union, for
example, while Northern Ireland has had its own civil service
and social security system since its creation in 1921.[28]
The Institute for Government told us that "these differences
reflect the UK's longstanding approach to constitutional design,
which has been to respond differentially to specific circumstances
and pressures arising in each part of the country rather than
seeking to design and implement a single consistent constitutional
model" and indicated that this approach remained the default.[29]
25. The Parliamentary Under Secretary of State for
Scotland, Rt Hon David Mundell MP, told us that the present debates
on devolution throughout the UK were not necessarily linked: "the
debate is at different stages in each of the respective parts
of the United Kingdom and even within different parts of England",
though debates on independence and a Scottish Parliament had been
the subject of debate for all his lifetime.[30]
26. David Ford MLA, Northern Ireland Justice Minister
and Leader of the Alliance Party of Northern Ireland, summed up
the challenges:
Part of the issue that we have to address is
the fact that in the UK we have a unitary state that has somehow
developed three entirely different forms of devolution. We do
not have anything that is a federal-type arrangement and, therefore,
to some extent, we are in the bizarre position that what is proposed
in one of the devolved nations does not necessarily have a read
across to the other two. [
] I am not sure there is a direct
read-across from the Scottish proposals. Clearly, the issues for
us are what an appropriate level of devolution around fiscal matters
is for Northern Ireland, and I am not sure that Smith necessarily
relates that directly to us in the absence of a more overarching
constitutional settlement for the UK as a whole.[31]
27. Rt Hon Peter Robinson MLA, First Minister of
Northern Ireland, recognised that a number of the proposals for
further devolution to Scotland under the Smith Commission Agreement
would not necessarily be appropriate for Northern Ireland. He
was sceptical about whether Northern Ireland should have all the
powers on offer to Scotland:
[
] [S]ome take a constitutionally political
position. It is a grab from Government of any powers that they
can; taking it away from London and bringing it back here. Almost
a sort of hyper-devolution collector's item: how much can you
have? I look at it on the basis of where is it best capable of
being used. Where can it function best? Because of the size of
Northern Ireland, I think we have to recognise that there are
some powers devolved or are intended to be devolved to Scotland
that would not operate in the same way in Northern Ireland because
of the cost of doing the work, so I think we have to take that
into account.[32]
28. The Institute for Government suggested that there
were often "good economic, cultural and historical reasons
for constitutional asymmetry." They ventured the following
examples:
For instance, fiscal devolution (implying a greater
degree of self-sufficiency) is less attractive to Wales than Scotland
due to Wales' weaker economic position. And Northern Ireland's
distinct power-sharing devolution model is a product of devolution
there being part of the peace settlement. As for England, its
pre-eminence within the UK means that there has not been the perceived
need to create separate English governance structuresWestminster
and Whitehall are already predominantly focussed on English matters.[33]
Baroness Randerson, Parliamentary Under Secretary
of State for Wales, told us that in negotiating devolution settlements
the UK Government recognised that "the needs of the individual
countries of the Union are different. We are aware in Wales that,
institutionally, the background is very different from that in
Scotland. Geographically, the situation is very different. We
have a long border with England that is very porous. People cross
that border very much more frequently than they do in Scotland."[34]
A 'NEW UNION MINDSET'?
29. Evidence we received from party leaders in Wales
indicated that the recent offer of further devolution to Scotland
under the Smith Commission Agreement should be matched in any
proposal made by the UK Government for further devolution to Wales.
Following an all-party agreement in the National Assembly on the
basis of further devolution to Wales, the First Minister, Rt Hon
Carwyn Jones AM, told us that he saw "no reason why the Smith
Commission offer in Scotland should not be made to Wales",
though he had been surprised by the proposal for full devolution
of many aspects of income tax.[35]
Leanne Wood AM, Leader of Plaid Cymru, told us that "that
agreement gives us the basis for implementing both Silk Commission
reports in full, without any undue delay, in addition to applying
new powers recommended by Smith for Scotland to Wales, too."[36]
30. Baroness Randerson indicated that the Smith proposals
had had some bearing on the proposals made for further devolution
to Wales: "we are aware that although the situation is very
different in Wales from that in Scotland, what is happening in
Scotland does have a knock-on effect on Wales and needs to be
considered in Wales".[37]
31. In a speech delivered after the Scottish referendum
result the First Minister of Wales indicated that in his view
the process of devolution was already changing the nature of the
British state, and was likely to change it further:
[D]evolution has already fundamentally changed
the governance of the United Kingdom. This was clear before the
Scottish referendum was even in prospect, and it has become blindingly
obvious since then. Public support for the devolved Parliament
and Assemblies has created a presumption of popular sovereignty
in the different parts of the UK, which has fundamentally challenged
assumptions about a centralised British state. [
]
[W]e have to move from a devolution mindset to
a New Union mindset. A devolution mindset starts with the assumption
that the Westminster Parliament is sovereign and we are fundamentally
a centralized state. That thinking has led us to making concessions
to national feelings, by way of specific limited delegations to
the so-called devolved administrations. A New Union mindset, on
the other hand, says that the UK is a state governed by four representative
institutions. Those Parliaments and Assemblies embody popular
sovereignty in each part of the country, and yet work with one
another for our mutual benefit. [
]
On the day after the Referendum there were encouraging
signs of a change of mindset. There was a recognition that the
Old Union had been swept away. The Prime Minister recognized (at
least for a few moments) the implications for the whole of the
UK, and said that Wales should be at the heart of the debate.[38]
32. Whatever the merits of the 'New Union mindset',
it appears that it has not led to greater agreement between the
Wales Office and the Welsh Government on further devolution. The
process leading up to the publication of the UK Government's proposals
for further devolution to Wales has been described by the First
Minister as "rushed, incoherent and unsatisfactory",
with the proposals themselves representing "no more than
a staging post to which we will now return after the general election
in order to craft a new and sustainable system of Government:
one that will resolve many of the constitutional anomalies and
disparities that currently exist."[39]
He criticised the apparent failure to bring forward proposals
on the same basis as the offer which had been made to Scotland:
[A]ll these proposals are positive but there
is no question that they fall short of fair and equitable treatment
for Wales. Our consenting powers on energy will still be capped
at what is an arbitrary limit, albeit one substantially higher
than now. There is no progress at all on policing, no commitment
to even the further review on justice that Silk recommended, nor
any transfer of executive powers for youth justice.[40]
Asked to consider the First Minister's case for a
process that would "treat all four nations as equal and develop
a long-term view on what the UK should look like", Baroness
Randerson was pragmatic: "there may be a case for doing that
but it is not something that you would, ideally, establish in
the last months of a Parliament. It is something that is undoubtedly
an issue for the future."[41]
A JOINED-UP PLAN FOR FURTHER DEVOLUTION?
33. Several of the submissions were received were
critical of the apparent lack of coherence in the approach of
successive administrations to the process of devolution. Akash
Paun, of the Institute for Government, drew attention to the inherent
risks of a piecemeal approach:
I think the way it has worked up until now is
that there has been almost no joined-up thinking. [
] There
are some good reasons for that but you do end up running into
maybe unintended consequences of devolving just to one part of
the country. We referred in our evidence to spill-over effects,
[
] If you devolve a lot of tax powers just to Scotland,
there are potentially concerns about tax competition, competition
for inward investment and so on that one has to be mindful of
in designing a settlement. [
] If, in the way that has been
happening, one thinks only about devolution to Scotland without
any consideration of how it will spill over elsewhere, it could
lead to instability.[42]
The policy analyst Dr Robin Wilson described the
Whitehall approach to devolutionary change as "'chopped-up'
governance [
] with very little policy exchange among the
jurisdictionsor even mutual knowledge about what they are
doing."[43]
34. Ministers were nevertheless adamant that the
Government had been taking a joined-up approach to devolutionary
change since 2010. Greg Clark indicated that devolution had been
"a pretty constant conversation during the whole of the last
four and half to five years. It has regularly been discussed at
every level of Government from the Cabinet, and in Parliament
multiple times. The idea that these are proceeding without any
reference to what is going on elsewhere is not the case."
David Mundell told us that "We are demonstrating that we
have a consistent approach for the constituent parts of the United
Kingdom and I think our approach to Scotland has been an entirely
consistent one", while Baroness Randerson countered the argument
that the Government had been moving forward too hastily in proposing
further devolution in Wales: "I would call it responsive
government and moving forward in steady but quite large steps
in terms of the devolution settlement. I would ask you to reflect
on the dangers of delay. When there is a strong demand for further
devolution, there is great common sense, in a reasonable and timely
manner, in seeking to deal with that issue."[44]
Our view
35. The timing of the Scottish referendum, and the
natural wish within Government to make progress on devolution
before the end of the present Parliament, have led to the development
of three separate proposals for further devolution which, while
not drafted in isolation, are not the product of a coherent process
for planning the future of a devolved Union. In part, this reflects
differing political circumstances and the asymmetric nature of
the present devolution settlement. In
the three post-referendum proposals for further devolution, each
developed separately and to be implemented bilaterally, it is
difficult to perceive the 'new Union mindset' which the First
Minister of Wales has championed, and easier to perceive a 'devolution
mindset' where powers are handed down from Whitehall along bilateral
channels. As the devolution
settlement matures, the implications for the operation of the
Union as a whole of each transfer of powers must be fully taken
into account. We examine proposals for refreshing the intergovernmental
and intragovernmental machinery of devolution further below.
PUBLIC ENGAGEMENT WITH THE PROCESS
OF DEVOLUTION
36. Although the Smith Commission process has been
hailed in several quarters for producing a negotiated settlement
acceptable to all parties represented on the Commission, there
has been criticism of the way in which the settlement was reached.
Though he thought the Smith Commission agreement was impressive,
Akash Paun thought that the level of public engagement had been
insufficient. He told us that changes to the constitution of this
significance should follow a process of proper engagement, but
that in this case "the timetable was set for political reasons
in the days before the referendum and the commission had to work
to it."[45] He stated:
I think they did the best they could in a pretty
difficult, constrained situation. Ideally you would have had a
much longer period allowing for greater public engagement. The
Scottish Constitutional Convention in the 1980s and 1990s sat
for six years or so. The Scotland Act 2012 was the output of a
long process going back to 2007 or 2008 when the Calman commission
was set up.[46]
He told us that the Commission had made an effort
to encourage civil society submissions and had received a good
range of them, as well as thousands of public submissions, although
he was unsure whether those submissions had had much impact on
the outcome of the process. He also noted that the Smith Commission
"ended up being called a commission just because that is
the sort of phrase that emerges in these kind of situations",
but had not in fact been set up to be an evidence-driven, deliberative
process of the kind normally associated with such commissions.[47]
37. Unlock Democracy was also critical of the Smith
process, telling us: "The arbitrary timetable for the "vow"
to Scotland agreed in the heat of the referendum campaign means
that complex decisions about the future of devolution will be
examined in extreme haste." We heard that:
The timetable set by the government would be
unrealistic even if the decision were one that only involved ministers
and civil servants. It was determined purely by party political
calculation and leaves the public no meaningful opportunity to
contribute to the process. The impact the restrictive timetable
will have on the decision-making process is already clear. The
Smith Devolution Commission has invited the public to send in
their individual views on the future of Scottish devolution, but
they only have a window of 28 days to contribute. This process
does not meet even the government's own guidelines for consultations,
which recommend significantly longer periods of consultation for
more complex issues. After the consultation process, the Commission
itself then has just one month to produce proposals. This is simply
not enough.[48]
Professor Nicola McEwen, of the University of Edinburgh,
thought that the Smith process would not allow sufficient time
for proper analysis of the implications of the new powers proposed
for the Scottish Parliament:
I think that there is probably enough time to
get a set of ideas, a heads of agreement we are talking about
now, but they will not scratch beneath the surface to explore
whether these are workable ideas, what the implications of introducing
those new responsibilities would be and how it might unfold.[49]
She suspected that the result would be that whatever
came out would probably not be sustainable and "we will be
back here within a few years talking about either fixing that
or what next." She also noted the disparity between the level
of public engagement with the referendum, and the lack of scope
for engagement with the Smith process, telling us she thought
"almost an exclusion of the public from the process as it
is now is very unfortunate."[50]
38. Mr Mundell, however, defended the process from
charges of insufficient public engagement:
I do not agree that the public is excluded from
this process. [
] I think particularly in Scotland the public
have been very much engaged in this debate, which is continuing.
The Scotland Office, for example, is engaged at the moment in
consultation sessions in relation to the detail of the clauses
that have been produced and there have been events already in
Aberdeen and Inverness, and there is one in Glasgow in the next
few days, where people can engage directly in relation to the
process. [T]here was very significant engagement and also the
Smith commission itself had significant engagement. But ultimately
agreement does have to be reached, and although that agreement
on individual aspects was not done on a plebiscite basis, the
big question was.[51]
Our view
39. The process of constitutional change which has
resulted in the Smith Commission Agreement and the draft clauses
for a Scotland Bill was designed to address the political demand
in Scotland for a coherent and scheduled commitment to the delivery
of further powers for the Scottish Parliament. It is undeniable
that the Smith proposals and the draft clauses have been delivered
to an extremely tight timescale. Lord Smith, his fellow Commissioners
and the team of civil servants assembled to support the Commission
have clearly met the Commission's brief, and the Government has
ensured that the timetable for the Commission's work and its outputs
has been met. It will be for the political parties which have
underwritten the Smith process to ensure that commitments on the
enactment of legislation are met following the general election.
40. The Smith Commission undertook its work in a
political climate in Scotland already galvanised by the referendum
campaign. Sustained constitutional discourse is not a novelty
in Scotland: as we observed in our report on Do we need a constitutional
convention for the UK?, the Scottish Constitutional Convention
was established in 1989 and deliberated for six years on proposals
for a Scottish Parliament which were adopted by the Government
in 1997.[52] As a number
of witnesses pointed out to us, the level of debate and public
understanding of constitutional issues and choices in Scotland
is now very high. Willie Rennie told us that "We have been
debating this for three years. We know the ins and outs of how
the whole system works. [
] We have to run with it just now.
We know more than anybody would really want to know about their
constitution and I think we will make very sound decisions."[53]
41. The constitutional changes proposed in the Smith
Commission Agreement are nevertheless being taken forward without
detailed external scrutiny of their effect on the overall devolution
settlement. As we indicate below, substantial bilateral work has
been undertakenand remains to be undertakenon the
design of machinery which will support the additional taxation
and welfare powers to be granted to the Scottish Parliament, and
on the fiscal framework envisaged in the Agreement, but it is
not clear what account this work is taking of the likely overall
effect on the UK and its constituent nations. Although, as we
report below, the UK Parliament and the devolved institutions
are to receive regular reports from the committees established
under a renewed intergovernmental structure, it is not yet clear
what opportunities there will be for Parliamentary scrutiny of
the emerging settlement, over and above the formal scrutiny afforded
by the legislative process.
42. The three main Westminster parties have all given
undertakings that the Smith Agreement's provisions are to be enacted
very early in the new Parliament. While we do not recommend any
breach of these undertakings, or even any pause for greater scrutiny,
we note that a substantial refashioning of the UK is being undertaken
with little UK-wide debate or discussion, and relatively limited
formal opportunities for Parliamentary scrutiny.
43. We welcome
the level of public debate and engagement in Scotland over its
constitutional future, both during and after the referendum campaign.
Despite the high levels of awareness of constitutional debates,
we note with concern the limited timescale for the public and
civil society to be consulted as part of the Smith Commission
process, and the similarly limited formal opportunities for consultation
and deliberation on the Smith Agreement and the Government's draft
clauses. This rushed process cannot substitute for a full deliberation
on the constitutional future of all elements of the United Kingdom.
INTERGOVERNMENTAL WORKING AND PARLIAMENTARY
SCRUTINY
44. The principles underlying relations between the
UK Government and the devolved administrations are set out in
the Memorandum of Understanding and supplementary agreements first
issued in July 2000[54]
and most recently issued in October 2013.[55]
The intergovernmental working arrangements include a Joint Ministerial
Committee (JMC) consisting of UK Government, Scottish, Welsh and
Northern Ireland Ministers, with a remit to consider devolved
matters falling within non-devolved responsibilities and vice
versa, to keep arrangements for liaison between the administrations
under review and to resolve disputes.
45. In evidence we heard that the JMC process was
not working as well as it could. Rt Hon Carwyn Jones AM, First
Minister of Wales, told us that the plenary sessions of the JMC
were in danger of becoming "simply a meeting that airs grievances",
though he acknowledged that the JMC machinery could be helpful:
The JMC is useful as a way of exploring issues.
The difficulty with it is that, where there is any dispute, it
is resolved by the Treasury. We have a dispute resolution process,
but ultimately UK Government can decide to do what it wants. That
has to change. We have to move to a situation where there is a
recognition of four nations working together as part of a sovereign
state. We are a long way from that.[56]
46. Rt Hon Peter Robinson MLA, First Minister of
Northern Ireland, was more caustic about the value of the JMC
disputes procedure, which he also believed was under Treasury
control:
While Finance Minister, I had disputes about
significant expenditure in England that was not subject
to Barnett consequentials. We took that to the JMC disputes
procedure, which is a useless procedure. The people who have taken
the initial decision want to decide what the outcome of the arbitration
should be.[57]
He thought that the JMC dispute procedure needed
to be reviewed, telling us that there was a need to look at issues
such as dispute resolution processes and how the devolved administrations
could have a voice in Europe, as they would have priorities different
from those of the rest of the UK. He also noted that there were
already many good processes in place, stating:
We have built up over the last number of years
institutions and processes within the UK arising out of Northern
Ireland issues, but which benefited Scotland and Wales as well,
in terms of the British-Irish Council and the various working
groups that it has set up where we share our views, we show what
we are doing in our area and how it has made changes so that it
can be picked up by other areas. So there are good processes in
place.[58]
Mr Robinson concluded his comments by telling us:
"At the end of the day, there are still a lot of decisions
that are being taken for us, and how you get that greater input
without interfering to an acceptable level with the right of a
Government to take the decisions that it wishes to, that is a
difficult conundrum."[59]
47. The Smith Commission considered that, in the
light of the scale of the agreement reached on further devolution
to the Scottish Parliament, the present intergovernmental machinery
between Scotland and the UK required urgent reform and significant
upscaling.[60] The views
of all the devolved administrations would have to be taken into
account in the revised quadrilateral machinery. Under the Smith
proposals, the new arrangements would require a "new and
overarching" Memorandum of Understanding, which would add
to the existing memorandum the details of arrangements for the
bilateral governance of the implementation of the tax and welfare
powers to be devolved under Smith, and provide for additional
sub-committees in areas such as home affairs, rural policy, agriculture
and fisheries and social security and welfare. More effective
and workable dispute resolution mechanisms are proposed, with
provision for arbitration "as a last resort".[61]
48. The Commission also called for "much stronger
and more transparent parliamentary scrutiny" of the operation
of the devolution machinery. It envisaged the production and laying
before respective Parliaments on the implementation and operation
of the revised Memorandum of Understanding, and active reporting
to respective Parliaments of conclusions of Joint Ministerial
Committee, Joint Exchequer Committee and other inter-administration
bilateral meetings.[62]
49. Baroness Randerson told us that the Silk Commission,
in its second report, had made recommendations for improving the
bilateral relationships between the Welsh Government and the UK
Government, and that proposals to implement these recommendations
had been made in the recent paper from the Secretary of State.[63]
She acknowledged that the intergovernmental machinery needed reinvigoration:
many of the proposals would be addressed in the overall review
proposed by Smith of the institutions underpinning the devolution
settlement.[64]
50. The UK Government, in the Command Paper publishing
the draft clauses to give effect to the Smith agreement, has accepted
the recommendation of a change to intergovernmental working practices,
and has committed itself to working with the devolved administrations
on a revised Memorandum of Understanding. The work was commissioned
at the Joint Ministerial Committee meeting on 15 December 2014
and officials expect the work to take 'a number of months'.[65]
51. The UK Government has made no explicit proposals
for Parliamentary oversight of the operation of the devolution
settlement. Sir William McKay reminded us of the proposals which
the McKay Commission on the consequences of devolution for the
House of Commons had made for Parliamentary scrutiny of "the
general development of the devolutionary settlements so far as
they impacted on the House of Commons".[66]
The Commission had proposed a select committee of the House of
Commons which could, for example, draw the attention of Members
to legislative consent motions passed in the devolved parliaments,
examine how best to deal with cross-border spillovers in UK legislation,
and consider the working of the Barnett formula.[67]
52. The Government
has accepted the Smith Commission proposals for greater involvement
of the UK Parliament and the devolved institutions in the functioning
of the intergovernmental arrangements for devolution. We welcome
the proposal of the Smith Commission that the UK Government and
the devolved administrations should lay reports on the implementation
and effective operation of the revised Memorandum of Understanding
before their respective legislatures. We further welcome the proposal
for stronger and more transparent Parliamentary scrutiny inherent
in the proposal that conclusions of all inter-administration committee
meetings be reported as a matter of course.
53. A commitment
to regular reporting to Parliaments is beneficial, and promotes
transparency at the heart of the intergovernmental process. However,
if there is no corresponding mechanism for Parliamentary scrutiny
of such reports then they are in danger of becoming formulaic.
We therefore recommend that the House
of Commons develop a mechanism for systematic and effective scrutiny
of the intergovernmental operation of the devolution settlement.
A quadripartite Devolution Committee, comprising the three territorial
select committees and the committee with oversight of the Government
department with responsibility for constitutional policy, could
be established along the lines of the present Quadripartite Committee
on Arms Export Controls. Such a committee could consider the regular
reports to Parliament from the Joint Ministerial Committee, undertake
the tasks contemplated by the McKay Commission, and keep the operation
of the devolution settlement under review.
INTRAGOVERNMENTAL WORKING
54. Professor Jim Gallagher, speaking from long experience
of working on devolution issues within the UK Government, proposed
a re-examination of the governmental structures supporting the
devolution settlement:
Now that the decision is made that Scotland remains
in the United Kingdom, we should start thinking about how we manage
this stably for the long run. [
] [W]hat you do need is a
substantial institution of government, that is to say resources
and people who are dedicated to this task over the long run. If
I may, I will offer you two reasons why. The first is a simple
and obvious managerial one. I worked for 35 years in government,
and the one lesson I learnt [
] was the things that I put
resources behind were done and the things that I did not put resources
behind did not get done. The blunt truth is that the UK Government
has not put substantial resources behind the management of its
territorial nature. [
] [T]he Scotland Office and the Wales
Office [
] are tiny departments with almost no staff and
the resources that they would need are an order of magnitude short
of the task that they should have.[68]
He indicated what the priorities for greater resources
should be:
[You] would make sure that there was an understanding
both here in Westminster and Whitehall, but also in Edinburgh
and Cardiff and London, that the UK Government had a role and
responsibility and was discharging it. Successive Secretaries
of State for Scotland have struggled to make their own place and
find their space. Secretaries of State for Wales have moved in
and out of that capacity over the years, depending essentially
on their political relationships. Similarly, to be fair, Secretaries
of State for Scotland have depended on their personality and style.[69]
55. Although Professor Gallagher indicated that he
was in favour of replacing the territorial Secretaries of State
with a Minister for the Union, the Parliamentary Under-Secretary
of State for Scotland was not convinced:
I think [that the Secretary of State] is a very
important part of the settlement [
] with Scotland.
Scotland has a seat at the Cabinet table and within the UK and Scotland's
distinct interests can be represented around that table. I think
the shape of the Government must ensure that individual parts
of the United Kingdom have the opportunity to have their
distinct needs voiced at the Cabinet.[70]
Baroness Randerson, who represents the Wales Office
and the Northern Ireland Office in the House of Lords, also argued
for retaining territorial Ministers and departments:
One of the things that constantly surprises me
day after day is the differences between the two settlements and
the fact that they are very different settlements from a very
different historical perspective. I can sit and read something
that the UK Government is proposing to do and I will immediately
think through the different channels it will take within the two
countries and that it will be received differently in the two
countries as a result. If you amalgamate things in one government
department, not only do you lose the benefit of three different
voices at the Cabinet tableyou only have onebut
you also lose that understanding and nuance across government
of the difference between the three settlements.
It is also worth pointing out that of course
the territorial departments have two roles. They have the role
of making sure that the UK Government's views are known appropriately
in the individual country, but they also are responsible for making
sure that each individual country is able to put its point of
view effectively within the UK Government. We are kind of liaison
departments, one to the other. I wonder how that could be done
effectively, bearing in mind the difference in the settlements,
if you amalgamate it into one department.[71]
Akash Paun, of the Institute for Government, took
a realistic view of the proposal:
I think it would be sensible to have more joined-up
thinking about how the different bits of our territorial constitution
operate and interact. That idea has been floating around for years.
I know it was proposed to Tony Blair several times when he was
Prime Minister. It might have some benefits, but even if you were
to do it you would still have at least three very different devolution
settlements with different relationships with Whitehall or Westminster.
However you set up the Government machinery in Whitehall, you
would still have quite different issues to manage with respect
to the different parts of the country. It would not change that.[72]
Our view
56. We
acknowledge the benefits to the Union, and to relationships with
the devolved institutions, of territorial Secretaries of State
and Ministers who can provide effective liaison between the UK
Government and the devolved institutions. It is important to the
Union that all its elements are represented at the Cabinet table.
57. Since the advent of devolution the territorial
departments supporting Ministers have diminished substantially
in size. We have received no evidence on the impact of the reduction
in size of territorial departments on their effectiveness, but
we note Professor Gallagher's observation about the relationship
between Government resource and outcomes. Similarly, we note that
the three territorial departments are set up to work with devolution
settlements which are very different in nature.
58. There is clearly scope for greater joined-up
thinking between territorial departments, and between those departments,
the rest of Whitehall and the devolved administrations, on the
way the Union can operate. At a point when the intergovernmental
machinery is being examined and retuned, it may also be appropriate
for intragovernmental operations to be examined, in order that
Ministers are better supported in their objectives in managing
both the Union and the devolution settlement.
59. We recommend that the Government review the
resources and structure of the departments which presently support
the territorial Secretaries of State, with a view to more effective
management of the territorial constitution.
6 Results published by Electoral Management Board for
Scotland, www.electionsscotland.info . The referendum question
was 'Should Scotland be an independent country?'. Back
7
Scottish Independence Referendum: Report on the referendum held on 18 September 2014,
Electoral Commission, December 2014 Back
8
The Centre on Constitutional Change published a copy of the statement:
http://www.centreonconstitutionalchange.ac.uk/news/joint-statement-more-devolution-uk Back
9
HC Deb, 10 September 2014, col 900 Back
10
"The Vow", Daily Record, Tuesday 16 September 2014 Back
11
Q265 Back
12
Local Government Association (PRD 0075), para 3.3 Back
13
Corporation Tax (Northern Ireland) Bill 2014-15 Back
14
The representatives put forward by the parties were: Annabel Goldie
MSP, Scottish Conservative and Unionist Party, Adam Tomkins, Scottish
Conservative and Unionist Party, Maggie Chapman, Scottish Green
Party, Patrick Harvie MSP, Scottish Green Party, Gregg McClymont
MP, Scottish Labour, Iain Gray MSP, Scottish Labour, Tavish Scott
MSP, Scottish Liberal Democrats, Michael Moore MP, Scottish Liberal
Democrats, John Swinney MSP, Scottish National Party, and Linda
Fabiani MSP, Scottish National Party. Back
15
The parties' published proposals on further devolution for Scotland,
Scotland Office, Cm 8946, October 2014 Back
16
More powers for the Scottish Parliament: Scottish Government proposals,
Scottish Government, October 2014, and Scottish Green Party submission to Smith Commission on Devolution,
Scottish Green Party, October 2014 Back
17
Report of the Smith Commission for further devolution of powers to the Scottish Parliament,
The Smith Commission, November 2014 Back
18
Scotland Office, Scotland in the United Kingdom: An enduring settlement,
Cm 8990, January 2015 Back
19
Political and Constitutional Reform Committee, Constitutional implications of the Government's draft Scotland clauses,
Ninth Report of Session 2014-15, HC 1022, para 12 Back
20
Commission on Devolution in Wales, Empowerment and Responsibility: Financial Powers to Strengthen Wales,
November 2012 and Empowerment and Responsibility: Legislative Powers to Strengthen Wales,
March 2014 Back
21
Record of Proceedings, National Assembly for Wales, 21 October 2014 Back
22
Powers for a purpose: Towards a lasting devolution settlement for Wales,
Wales Office, Cm 9020, February 2015 Back
23
Northern Ireland Office, The Stormont House Agreement and The Stormont House Agreement-Financial Annex,
December 2014 Back
24
Scottish Affairs Committee, The implementation of the Smith Agreement,
Fourth Report of Session 2014-15, HC 835, para 57 Back
25
Q408 Back
26
Q64 Back
27
Ibid. Back
28
Institute for Government (PRD 0083) Back
29
Ibid. Back
30
Q512 Back
31
Q435 Back
32
Q491 Back
33
Institute for Government (PRD 0083) Back
34
Q511 Back
35
Q366 Back
36
Q298 Back
37
Q511 Back
38
A keynote speech by the Rt Hon Carwyn Jones AM, Minister of Wales: Our future union-a perspective from Wales,
Institute for Government, October 2014 Back
39
Record of Proceedings, National Assembly for Wales, 3 March 2015 Back
40
Ibid. Back
41
Q513 Back
42
Q411 Back
43
Dr Robin Wilson (PRD 0068), para 17 Back
44
Ibid. Back
45
Q427 Back
46
Ibid. Back
47
Ibid. Back
48
Unlock Democracy (PRD 0057), para 7 Back
49
Q36 Back
50
Ibid. Back
51
Q514 Back
52
Political and Constitutional Reform Committee, Do we need a constitutional convention for the UK?,
Fourth Report of Session 2012-13, HC 371, paras 21-23 Back
53
Q267 Back
54
Memorandum of Understanding and supplementary agreements between
the United Kingdom Government, Scottish Ministers, the Cabinet
of the National Assembly for Wales and the Northern Ireland Executive
Committee, Cm 4806, July 2000 Back
55
Memorandum of Understanding and Supplementary Agreements, October
2013 Back
56
Q369 Back
57
Q496 Back
58
Q508 Back
59
Ibid. Back
60
Report of the Smith Commission for further devolution of powers to the Scottish Parliament,
The Smith Commission, November 2014, para 28 Back
61
Ibid. Back
62
Report of the Smith Commission for further devolution of powers to the Scottish Parliament,
The Smith Commission, November 2014, para 28 Back
63
Q526 Back
64
Q526 Back
65
Scotland in the United Kingdom: An enduring settlement, Scotland
Office, Cm 8990, January 2015, paras 9.2.2. and 9.2.3 Back
66
Sir William McKay (PRD 0073), para 28 Back
67
Ibid. Back
68
Q83 Back
69
Q84 Back
70
Q527 Back
71
Q527 Back
72
Q423 Back
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