David Herdson says the government should call the SNP’s bluff on full fiscal autonomy

David Herdson says the government should call the SNP’s bluff on full fiscal autonomy


It’s time to slay Holyrood’s bogeyman

The referendum was never going to be the end of the story and neither was the declaration of the unionist parties to implement the recommendations of the Smith commission. The closeness of the vote last September and the unprecedented landslide this May have understandably prompted the SNP to demand a lot more. It would be foolhardy for Westminster to refuse.

The amendment that the SNP have put down is quite smart, not demanding a transfer of power but the ability to take up those powers. Providing it’s a one-way choice (i.e. the powers can’t be taken up or handed back at will, depending on the oil price, for example), then that’s as it should be.

    A great deal of the history of Scottish nationalism is built on resentment and in particular, resentment at ‘London’ taking ‘Scottish’ oil revenues. Unless that grievance is tackled, the sense of unfairness will never go away.

Nor, for that matter, will the mirror image resentment in England at Scotland’s apparently generous settlement from central revenues (which is not without its own electoral potency).

Handing Holyrood the option to take up those extra powers will finally put the politicians there – and the electorate too – on the spot as to whether they’re serious about self-government or whether it was all grandstanding. It would also go a very long way to eliminate the ‘they’re taking our money’ argument, from both sides. The question of the £7.6bn shortfall that the IFS identified would be a very real rather than a theoretical possibility. Would Holyrood really want to vote away so much – if it is so much? But if they wouldn’t, what does that say about future independence?

Such a move would also put Labour on the spot in Scotland. Would they oppose the amendment, so angering further nationalists; or do they support it, with the implicit threat it carries of having to implement a smaller state and spending restraint, so upsetting their left-of-centre voters?

That, however, ought to be a side benefit. The devolution story is littered with wishful thinking and moves that proved too clever by half. Indeed, George Robertson’s expectation that “devolution would kill nationalism stone dead” may be one of the worst pieces of prediction since Gaius Terentius Varro decided that the clear open ground just down the road from Cannae offered an excellent prospect for shattering Hannibal’s army.

The risk to the unionists if they were to call the SNP’s bluff and accept the amendment – or redraft it so that it contained a tighter definition of what the remaining UK-wide functions were and how they would be funded – is that that those who want independence could more credibly claim that it would be less of a leap in the dark and that there would be nothing to lose. It still wouldn’t be true (the interlinked EU and currency questions would remain, for example), but the fiscal case would not only be much clearer but also very little different from independence, in which case, why not take it?

But the alternative is worse. Firstly, it would still be behind the political curve, catching up with where the debate was nine months ago rather than where it is now, and that looks weak; but secondly and more importantly, it would do nothing to address the SNP’s favourite complaint that they’re not funded properly and don’t have the political or fiscal powers necessary – or in other words, Holyrood failings are essentially someone else’s fault. And of course doing so would make it still harder to avoid rebalancing the English side of the devolution equation.

That’s not to say there wouldn’t still be arguments, the most obvious one being that ‘we could invest x millions in whatever if the government scrapped Trident renewal. Likewise, there would no doubt always be some complaint to be had about how those central functions are paid for. But it’s hard to argue that defence shouldn’t be a UK-wide policy and that Westminster shouldn’t make the decision.

So let’s hear no more talk of residuals, no more talk of Barnett, or of the Smith Commission. The SNP have bid high on a weak hand and deserve to have their bluff called.

David Herdson

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