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25 September 2020

British devolution isn’t built for a crisis like Covid-19

The health crises envisaged when the devolved institutions were created could be solved using the policy levers available to devolved parliaments – but the novel coronavirus can't. 

By Stephen Bush

More than a quarter of the population of Wales will be in lockdown by the weekend, after Mark Drakeford, the First Minister, announced new restrictions in Cardiff, Llanelli and Swansea; taking the total number of people in Wales under lockdown to more than 1.5 million. In Scotland, the government has instructed students to stay out of bars, restaurants and other hospitality venues, other than to work, this weekend, in a bid to curb the mounting cases of coronavirus among the student population and across the nation as a whole.

Both measures expose one of the devolution settlement’s jagged edges. Decisions over responses to public health crises are located with the devolved administrations because, as envisaged, the United Kingdom’s devolution settlement is predicated on threats such as mad cow disease, where all the crucial levers, such as agriculture and health spending, are devolved. It is categorically not designed for a novel pandemic such as Covid-19, where, inevitably, your ability to fund financial support packages during lockdown is inextricably linked to your ability to deliver lockdown restrictions.

The reality is that neither Wales nor Scotland’s lockdowns look tenable as long-term policy responses given the looming end of the furlough scheme, which will mean a significant reduction in size of the retail and hospitality sectors. Incomes and businesses are going to need significantly greater support than they currently have or than can be provided by the devolved nations.

We can see this very clearly in the case of Scottish students – a row that is likely to affect the rest of the UK as students head to their universities. Student finance in the UK is predicated on one simple idea about the British labour market: the average student in England, Scotland, Northern Ireland and Wales will be able to top-up their maintenance payments from the state either through subventions from their parents or by working in retail or entertainment. Some more financially well-endowed universities are able to top up student incomes to avoid that, but for the vast majority of people taking degrees in the UK, they need a part-time job to make ends meet in term time.

That is more acute in Scotland, where, in order to finance the Scottish government’s long-term commitment that no Scottish student should pay tuition fees, they have had to keep maintenance grants low. But it is also true in England, where maintenance payments from the state have, whether given as grants or loans, not kept pace with rising living costs.

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The reality is that none of the industries that traditionally take on student staffers at this time of year is going to do so – nightclubs are still closed, bars and restaurants will be experiencing reduced custom. (The number of students self-isolating or being told to avoid bars and restaurants also has a knock-on effect here, because students not only rely on these jobs, they also create them through their custom.)

One thing that is clear is that in the short term, Chancellor Rishi Sunak’s Plan B of adjusting to coronavirus – rather than attempting to put the economy in cryogenic suspension until either a vaccine, palliative treatments or test and trace are able to curb its spread – means a higher level of resting unemployment than the pre-coronavirus economy.

It’s hard to see how that can be weathered politically without a more generous welfare system – or how the devolved governments can successfully pursue lockdown strategies when they don’t control the necessary financial levers to make them survivable or bearable.

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