Why federalism won’t save the Union

More devolution will only further weaken the ties which bind the UK together.

During his trip to Edinburgh last week, David Cameron rather unexpectedly announced that he supported an increase in the powers of the Scottish Parliament. The current devolutionary settlement, he said, did not have to be the "end of the road" and, provided Scots vote to reject independence at the referendum in 2014, he would be willing to examine ways in which it could be "improved further". Over the weekend, both Michael Moore and Alistair Darling expressed similar sentiments, although, like the prime minister, they refused to say how they thought Holyrood's legislative remit should be enhanced.
 
As Tim Montgomerie explained in the Guardian on Monday, there is a clear political rationale to this new "progressive unionism". The reality is that most Scots support greater fiscal autonomy and, so far, attempts to draw a line in the sand at the status quo - or, worse still, the Scotland Bill - have only played into the hands of the SNP. It makes sense, then, for unionists to seize the initiative by embracing federalism - or some variant of it - and handing Scots responsibility over the bulk of their financial and economic affairs. This would undermine the drive toward separation by sating the Scottish appetite for more self-government.
 
But would it? A federal UK would mean Scotland was only just shy of out-right economic independence. It would see Holyrood take charge of, among other things, Scottish income and corporation taxes, national insurance and - in all likelihood - North Sea oil revenues, while foreign affairs, VAT and monetary policy remained reserved to London. Further devolution for Scotland would have to be met with some form of devolution for England. This would almost certainly involve prohibiting Scottish MPs from voting on English-only matters. Under these conditions, the Union would amount to little more than a kind of glorified defence alliance, with Westminster's UK-wide role being restricted to that of conducting Britain's external relations.
 
The difficulty, though, from a unionist perspective, is that the case for Scotland to determine its own foreign and defence policies is at least as strong as that for it to determine its own economic policies.
 
For instance, an independent Scotland could cut its defence expenditure from the £3.1bn it currently contributes to the British defence budget to around £1.8bn in line with the Nordic average. This would represent a significant saving at a time when public finances were under considerable pressure. It could also force the removal of the hugely dangerous yet strategically redundant Trident nuclear missile system from its waters, thereby substantially improving its security situation. Finally, it could fashion a new role for itself in international politics which reflected its status as a small, northern European social democracy, rather than remain anchored to the UK as it struggles against the decline of its global influence.

Currently, these arguments do not chime with majority opinion in Scotland. But then, a decade ago, the idea that the Scottish Parliament should raise most or all of the money it spends didn't chime with majority opinion either. What changed was Scots' sense that they were capable of governing themselves: the more they did it, the more they wanted to do it. This bears out the "slippery slope" theory advanced by people like Tam Daylell and Michael Forsyth, the most staunch defenders of the UK's unitary political structure. They warned that, as Ian Macwhirter puts it, "independence is a process, not an event" which will occur incrementally over a number of years and through a series of different devolutionary stages, whether people vote for it directly or not. In light of recent events, it is becoming increasingly difficult to say they were wrong.

So, although Cameron, Darling and Moore may view federalism - or devo-max - as the best way to preserve the Union, there is a strong chance it actually represents another step along the road to Scottish independence. Devolution has a logic and a momentum of its own. So far it only seems to be weakening the ties which hold the UK together.

James Maxwell is a Scottish political journalist. He is based between Scotland and London.

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Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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