Tag: Devolution

The Union of 1707 and the art of the deal

For Scotland, Britain was built upon a bargain. Renewing that bargain needs England to engage

Scottish exemplification of the Treaty of Union. Public domain: sourced from Wikimedia Commons

One way or another, devolution as an idea and a reality has a long history in the United Kingdom. The issue of Irish Home Rule pushed the UK’s constitutional norms to its limit (and far beyond in Ireland). Devolution had an unhappy 50-year history in Northern Ireland until 1972. Calls for a Scottish legislature surfaced many times before one was finally created.

Nonetheless, Scottish (and Welsh) devolution in 1999 was a radical act with radical implications. Some who wish to keep the UK together regret it, at least within Great Britain. The devo-sceptics often paint it as an ahistorical rupture. But the historical backdrop to devolution is far from the most important sense in which it reflects a unionist tradition. And their objections miss both the need for a democratic expression of Scottish distinctiveness and two of the hardest challenges the Union faces now.

A new variation on an old theme

Britain was built upon a bargain. Scottish politicians secured Scotland’s distinctiveness in religion, law and administration, along with free trade throughout the new kingdom and its colonies. It was an incorporating union, with one parliament at Westminster. But it was altogether unlike the Tudor Laws in Wales Acts. The legislation of 1536 and 1543 incorporated Wales into the Kingdom of England. The Union of 1707 created a composite state, with a composite nation grafted on over time. Britain in its modern sense was forged in an Anglo-Scottish crucible.

That fact has expressed itself in different ways at different times. In the eighteenth century, the Church of Scotland, the Convention of Royal Burghs and local elites played their parts. The old Scottish Office was set up as far back as 1885 and expanded as the years went by. The Church of Scotland Act 1921 effected a compromise between an anti-Erastian Kirk and a sovereign Parliament. The UK never really had one National Health Service. The Tories stood as Unionists in Scotland until 1965. (They fought elections in the 1950s pledging to protect Scottish distinctiveness against socialist centralisation.)

Legislative devolution is different, because it creates an autonomous centre of political power. But it’s still in a long line of accommodations between the British state and the Scottish nation. It’s also a balance to English preponderance within the Union. It isn’t different because British politicians made a terrible mistake. It’s different because it’s a response for a democratic rather than an oligarchic age.

I doubt Britain could ever have avoided giving Scottish distinctiveness democratic expression. (And I don’t think it should. Devolution made good democratic sense.) But two consequences are, in my view, particularly underappreciated.

Shrinking, but not improving, the British state

First, unlike previous measures, devolution does nothing to make how the British state itself operates more appealing to Scots. It only reduces the scope of its activities. But despite the role of Scottish MPs, British politics became less Scottish over time. Devolving more powers often made sense in policy terms. But it also took up all the political space marked ‘reducing Scottish discontent’.

UK governments show little interest in recognising a devolved role at the centre. The Welsh Government’s call for a UK Council of Ministers falls on deaf ears. They show no sign of, say, thinking creatively about our second chamber. (Why, unlike almost any other state with a territorial challenge, don’t we even discuss some extra seats for the smaller nations in a reformed Lords?) And the current UK Government seems determined to undermine the conventions on which devolution rests.

Pushing the Union’s balancing act into the limelight

Second, as a new political system within the UK, devolution means politicians — and political noise. It has made the balancing act on which the Union of 1707 relies conspicuous outwith Scotland. That hasn’t been the case most of the time. But whether devolution is ‘fair to England’ is now a live question, with major consequences.

A century before the Union of the Parliaments, James VI’s Scottish courtiers attracted the ire of some English MPs. The spasm of Scotophobia surrounding Britain’s first Scottish Prime Minister is well-known. ‘Into our places, states, and beds they creep/They’ve sense to get, what we want sense to keep’ was only its most famous expectoration. But that kind of thing declined as the Union bedded in. And England mostly paid little attention to how Westminster acknowledged Scotland’s distinctiveness. That has clearly changed.

Symmetry versus balance

Anyway, reforming a democratic UK so the devolved nations feel they have more of a stake needs proper consent in England. As a result, tackling the first problem means facing the second head-on. And the view that fairness lies in symmetry — embodied in ‘English votes for English laws’ — will crash headlong into the view that the UK needs to balance England’s size.

Neither view is objectively wrong. But taken to their logical conclusion, the two are incompatible. Many in Scotland take too little account of the fact that the rest of the UK is not a mere backdrop for Scotland’s debate. But most people in England — understandably, as almost no one has suggested otherwise — don’t grasp that the debate involves them too.

One way to look at the American Revolution is to say the British and their colonists were each confronted by the other’s real view of their relationship. The British idea of parliamentary sovereignty over the Empire and the colonial view of their legislatures’ rights within it had diverged. And pitted against each other, they proved incompatible.

There is a risk of something similar nearer home. But I don’t believe the gap between English and Scottish understandings of the state we share can hold forever, unarticulated and unaddressed, in a democratic era. Any modern Union bargain for Scotland will have to combine a high degree of self-rule with a fair degree of shared rule. Those are core features of federalism, whether the UK can ever be remade into a federation or not.

I don’t know whether the people of England would agree to anything like that or what they might want in return. But in the long run, the survival of the Anglo-Scottish bargain may depend upon their answer.

This post was originally published on Medium.com on 21 February 2021.

State aid and the union state

Defending the Union is not the same as owning the Nats. Tory disdain for devolution post-Brexit endangers it even further

Constructing a UK internal market needs time and attention too

Some nationalists claim the United Kingdom has no such thing as an internal market. Granted, it has no formal project branded ‘UK single market’. But its four parts have sent MPs to Westminster longer than modern regulatory states have existed. Britain built an integrated domestic market long before it joined the then EC. Until 1999, EU law played no specific role in preventing divergence. And the UK has an unusual lack of internal barriers for a large state.

The problem is real, but the end doesn’t justify the means

When devolution arrived, a mix of reservations to the UK Parliament and EU law served to keep it together. That EU framework ceases to bind the UK from 1 January 2021, leaving our internal market vulnerable to erosion. In areas which are within devolved competence but constrained by EU law, ever more barriers could result.

As Canada shows, states can easily end up with major internal economic barriers, which you then have to try to negotiate away. In the UK this would do great economic damage, at least outside of England. Scotland, Wales and Northern Ireland all have the rest of the UK as their main external market, and we are all deeply integrated.

Data from the Scottish Government, Northern Ireland Statistics and Research Agency and UK Government Internal Market White Paper. Figures do not add to 100% due to rounding. Flag images from Wikipedia.

So the issue is serious, as all three devolved administrations say they accept. It’s hard to see how you address it without action at a UK level. So far, so reasonable: hence a White Paper. It’s also true that even with common frameworks, many areas currently regulated at EU level will fall entirely to the devolved legislatures.

Nonetheless, powers devolved within an EU framework aren’t the same thing as reserved powers. Constitutionally, the UK Government wants to reserve some things which are currently devolved. The Sewel convention is clear: the UK Government shouldn’t do this without consent. That convention is core to making devolution work. Parliamentary sovereignty and decentralised power don’t easily mix. Sovereignty needs self-restraint for them to rub along.

Further, the EU doesn’t work in the same way as the UK. EU lawmaking is far more consensual and member states are part of the process. EU law is also likely to give member states more room for manoeuvre than UK replacements. The UK has no equivalent to directives as opposed to regulations, for instance. UK institutions are likely to be far more single-minded and far less prone to compromise. That means an ‘equivalent’ reservation in any given area could well mean less devolved autonomy in practice.

The principle of agreeing common frameworks with the devolved administrations isn’t new or controversial. Reserving subsidy control (state aid) makes sense in policy terms — though that doesn’t let us off the constitutional hook of consent. But the White Paper proposes new cross-cutting constraints on devolved policy:

the Government now proposes a Market Access Commitment, which will enshrine in law two fundamental principles to protect the flow of goods and services in our home market: the principle of mutual recognition, and the principle of nondiscrimination.

I don’t necessarily oppose some version of this. But it has major implications, depending on how it’s drafted and which sectors are excepted. It could well mean major new constraints, over and above EU-derived ones, in devolved areas. We’ve always had regulatory divergence within the UK in some areas. Building regulations differ in Scotland and England, for instance. Will changes now be subject to a market access test?

The White Paper also takes a profoundly asymmetrical approach, with policy in England as the implicit norm. The legal market access commitment will only apply to devolved policy. But policy in England (or England and Wales, or Great Britain) in the same areas could create market barriers too. How far will the UK Government constrain its own approach, and proposals to Parliament, in these areas? Could ministers at least have to certify whether such proposals discriminate against other parts of the UK, for instance?

Would this mix — some EU constraints gone, some powers reserved, a new general constraint — mean more or less de facto power for devolved institutions? I don’t know. I don’t think anyone can know without seeing the actual drafting. Even that’s not enough to gauge how the market access commitment will pan out in practice. I do know that it has huge implications for how devolution works. It’s a big constitutional change: it merits proper discussion. And in our system, convention is quite clear that consent is required.

So the Scottish and Welsh Governments have every right to be outraged by the idea of imposing it upon them. And to consult upon it for a mere four weeks (a third of the time to consult on a reformed judicial pension scheme, for instance) is outright farcical. The problems with devolution and our home market have been discussed for over four years. And the Brexit cliff-edge on 31 December is of the UK Government’s own (perverse) making. Yes, the SNP always takes any excuse to invent grievances. That doesn’t make it right, or good for the Union, to give them real ones.

This isn’t a first, either. Since 2016, the Sewel convention has been ignored several times, and not just for Scotland. Whatever you think of the arguments for an exception in any given case, it’s becoming a pattern. Among multinational states, the UK seems unusually willing to just override devolved competence. At the same time, secession is unusually — possibly uniquely — easy to seek. In a union state where a British nation overlaps with several other, older nations, that’s a strikingly unstable mix.

Voice, choice and consent

The mix is particularly dangerous to the Union in Scotland. Much of independence’s appeal comes down to agency — speaking to a view that Scotland has no real say in Britain. In response, UK governments yo-yo between ever-looser union and centralising confrontation. Neither works. On the one hand, there’s a limit to how far you can or should devolve within a state. On the other, preserving the Union and owning the Nats are not the same, though a certain sort of Tory seems unaccountably convinced that it is. If you don’t want the UK to break up or become a constitutional God of the gaps, you need to make its central institutions more legitimate in Scottish eyes.

Brexit has damaged support for the Union in Scotland. But it offered a chance to grapple with a more shared approach to governing the UK. The Welsh Government is the most sensible and least heard of the four administrations on constitutional issues. It made proposals for a UK Council of Ministers to decide on common frameworks. More recently, it has called for the successor to state aid rules to be enforced by a neutral body.

Whatever the detail, the principle is clear. Devolved governments need a real say in this area, and the UK Government can’t be both party to and arbitrator of shared rules. Yes, that will slow some UK decision-making down. It would be no bad thing if some UK decisions had to take some more time and be a bit more considered. But for good or ill, it’s part of the price of sustaining a complex union state.

The internal market debacle provides a good example of a core problem with how the Union currently works. Federal systems usually involve some element of shared rule as well as self-rule. The UK, unless and until it finds ways of dealing with the English Question and dividing legal sovereignty, can never be a true federation. But in practice, devolution often raises federal questions, and so does Scottish discontent.

When required to think about Scotland, English commentators often get worked up about money. In doing so, they miss the point about voice. Somehow, the British central state has to find a way to make itself more palatable north of the Border. It has to satisfy enough Scots that Britain as a state isn’t England-Plus with unreliable Scottish opt-outs.

If it can’t, the end of the Union of 1707 is only a matter of time. The Conservatives may think they’re standing up to the SNP. They’re actually dancing to its tune.

This post was originally published on Medium.com on 18 July 2020.

1707 and 1973: Scotland, the UK and Brexit

When a 62% Remain vote in Scotland met a 52% Leave vote across the UK, the Union of 1707 looked shaky to many. Nicola Sturgeon promptly said a second independence referendum was highly likely. But since then, somewhat to my surprise, support for Yes has looked pretty similar to 2014.

This has, so far, held even as it’s become clear Theresa May takes a hardline view of the Brexit vote. No doubt as a result, Sturgeon – who has no desire to lose a second referendum and really bury the issue – has tried to keep her options open. Her stated position is that her priority for now is to keep the whole UK within the single market. This would be the best possible Brexit outcome for Scotland and for the rest of the Union.

However, she has also spent plenty of time arguing Scotland could stay in the single market even while the rest of the UK left. Clearly, this ‘differentiated solution’ has a distinct political edge: Sturgeon has an interest in the UK being seen not to meet Scotland’s wishes. Still, the UK was always asymmetrical, and voters in Scotland voted decisively to remain. It is also fair to say Sturgeon has softened her position quite a bit from demanding Scottish EU membership post-Brexit. So taking it at face value, what would the differentiated solution entail?

The ‘differentiated solution’: Liechtenstein-in-Europe

The Scottish Government’s paper Scotland’s Place in Europe suggests Scotland could stay in both the EEA and the UK customs union. The document cites the principle of ‘parallel marketability’. This is the model Liechtenstein uses vis-à-vis Switzerland, while participating in the EEA. Because Liechtenstein has a customs union with Switzerland, it has to adopt Swiss technical standards and regulation in a wide range of areas. But the EEA also requires Liechtenstein to adopt its technical standards and regulation.

As a result, EEA and relevant Swiss law are now simultaneously applicable in Liechtenstein. Liechtenstein agreed this with Switzerland, and the EEA also agreed to accept the arrangement. Products meeting either Swiss or EEA standards can be sold in Liechtenstein, but EEA law trumps Swiss when dealing with the rest of the EEA. Liechenstein also had to create a Market Control and Surveillance Mechanism, so neither EEA nor Swiss rules were broken outside the principality.

The Swiss Federal Customs Administration collects duties on goods entering the whole customs area. It informs Liechtenstein’s Office for the National Economy when goods are destined for Liechtenstein. Where customs tariffs are different (some EEA goods attract tariffs in Switzerland, but not Liechtenstein), duties are reimbursed. Importers are informed of their obligations, including proofs of sales in Liechtenstein.

Why it wouldn’t work for Scotland

For Scotland, this presumably means HM Revenue and Customs would continue to collect duties for the whole UK. It would then inform a Scottish public body where requirements differed and when goods were destined for Scotland. By analogy with HMRC, the Scottish body might be a beefed-up Revenue Scotland.

The UK would also have to devolve much of employment, commercial and competition law, so Scotland could implement EEA law. Alternatively, the UK might confer a general power to implement EEA rules on Holyrood. But that could cause chaos in UK-wide law.

Where the UK’s rules didn’t mirror the EEA’s, new non-tariff barriers would arise, which poses a major problem. 64% of Scotland’s exports (excluding oil and gas) go to the rest of the UK, compared to 15% going to the rest of the EU. Even ignoring the fact that much of the oil and gas also goes to the rest of the UK, it is clear who Scotland’s main trading partner is. The Scottish Government would say the model keeps UK goods standards for UK trade. But Scotland is mainly a service-based economy. In fact, Scotland trades more in services with the rest of the UK than it does in goods. The position is reversed in trade with the rest of the EU.

So given that, what happens as UK and EEA employment law start to diverge? What about financial services regulation, especially when UK financial services are so intertwined? What if EEA competition law is tougher than the UK variety – what does that mean for a UK-wide company operating in Scotland?

The problem gets worse when you remember this is Sturgeon’s proposal in the event of a hard Brexit. The further the rest of the UK pulls away from the EU, the more acute the problem becomes. In Liechtenstein’s case, Switzerland adopts most of the acquis communautaire for goods anyway, which softens the dilemma. The UK may well copy a lot of EU regulation anyway, as it discovers the irritations of diverging from its main trading partner. But to the extent that it doesn’t, Scotland will pay a price.

Above all, Liechtenstein is a small and sovereign state. Legally, presumably the UK would need to join the EEA and then restrict its territorial application to Scotland. Scotland would then need powers to take part in the EEA Joint Committee and the EEA Council, appoint a judge to the EFTA Court, select a member of the EFTA Surveillance Authority College and so on. Spanish domestic politics on their own make it clear this won’t happen. But even if the politics could be resolved, the cases are fundamentally different. Liechtenstein has about 37,000 inhabitants. It is tiny, and therefore allowed to be anomalous. Scotland, on the other hand, would have the largest EFTA population in the EEA. It would also be far more closely bound to the rest of the UK than Liechtenstein ever was to Switzerland.

Liechtenstein’s single market model is not workable for Scotland, any more than its migration quotas set a precedent for the UK. Pursuing it undermines the overriding need for a sensible UK-wide deal.

On Brexit, powers reserved should be powers shared

With the potential and partial, but crucial, exception of Northern Ireland, the form of Brexit mostly needs to be settled UK-wide. But that doesn’t mean Scotland’s (or Northern Ireland’s) distinctive views should be ignored. The UK-wide settlement needs to be a compromise befitting a narrow vote and a territorial split.

In many ways, Scotland, Wales and Northern Ireland have federal relationships with the UK. Each has a legislature of its own as well as the UK Parliament. Powers reserved to the UK Parliament are specified in law. The courts can decide if devolved legislation exceeds devolved powers. Devolved powers aren’t meant to be changed unilaterally, though what that means is obviously disputed.

One key difference with federalism is the lack of formal protection for devolution. Unless Section 28(8) of the Scotland Act 1998 is read very radically indeed, no court would actually stop the UK Parliament legislating over devolved legislatures’ heads. But another is the lack of a mature federal political culture. Federalism usually involves shared rule as well as self-rule – an idea that a state’s nations or regions have a say in government at the centre. In a state large or diverse for federalism, central government has to govern with the territorial dimension in mind.

This is why many federations have indirectly elected second chambers. It’s why federations usually require some or all constituent territories to agree some or all constitutional changes. Modern federalism requires governments to work together. But at the moment, we ‘deal’ with problems between the UK’s nations by ignoring them or offering more powers. With Brexit, working out where to handle powers no longer exercised at EU level will matter a great deal. One of the many arguments for the EEA is that it reduces the need to create a framework for a UK single market which neither undermines devolved powers nor means more non-tariff barriers within the UK.

If the SNP wants to serve Scotland’s interests, however, it needs to recognise the UK can’t just devolve itself out of this problem. Scottish Labour, meanwhile, should push hard for UK Labour to back staying in the single market. But in some ways, it’s the Scottish Conservatives who bear the biggest responsibility.

After the referendum, Ruth Davidson said she’d prefer to stay in the single market post-Brexit. She has built her success on being an uncompromising voice for the Union of 1707. No one will ask her to row back on that. But Scottish unionism shouldn’t just be about keeping Scotland in the UK, but helping Scotland shape the UK. The Scottish Conservatives have political capital. Ruth Davidson is highly respected by her UK party. She has shown Tories can make headway in Scotland. She should use it to make Brexit respect Scotland’s interests, and work better for the whole UK.

What happens otherwise?

Some of the Tory right will say Scotland wouldn’t really leave over Brexit, hard or soft. Well, it might or it might not. Brexit complicates and sharpens the choice for Scotland, and the harder the Brexit the truer that will be. Scots would need to be prepared for a decades-long, probably very painful reorientation. It would be a far more radical form of independence than Alex Salmond proffered in 2014.

But wise unionists should want to reduce Scottish discomfort within the UK, not foment it. They should also beware of assuming Scotland would never jump. A Scotland where 45% voted to leave the Union is not one where the Union is secure. It is one in which the Union has much to prove. If Theresa May really cares for its ‘precious, precious bond’, she would do well to bear that in mind.