The devolved Scottish Parliament in Holyrood has just celebrated her 21st birthday. But has she come of age? Prime Minister Boris Johnson recently described devolution as a “disaster for Scotland”; but then, historically, the Westminster Tories have been reluctant supporters of devolution. Even the most ardent devolutionists can see that Holyrood is behaving like an irresponsible teenager complaining to Westminster about her pocket money and blaming London for all misfortunes instead of taking any responsibility for her own affairs. This is a fault-line that was built into the new Parliament from the outset by the Labour Party thinking they would always still control Scotland from Westminster. In this second-of-six papers, I argue that now is the time for the Tories to follow through on the recommendations of their own Strathclyde Commission of 2014 to embrace more devolution of financial powers in order to save the Union; by letting Holyrood grow up and raise more of its own revenue in return for greater scrutiny and accountability.
The architects of Scottish devolution in 1997 were three Labour grandees and Glasgow University graduates, John Smith, Donald Dewar and Derry Irvine. Their primary motivation was not better governance for Scotland, as all three believed that Scotland’s interests in the UK would always be protected at Westminster by both Labour and the Tories, but instead as a device to stem the rising tide of Scottish nationalism. They figured they could deflect the nationalist charge that Scotland would be better governed in Edinburgh than in Westminster, and so created a half-way house which essentially kept power in Westminster but presented a stronger Scottish voice at home. Therefore, the house they designed was never intended to give a majority to any one party which, in turn, negated the need to create checks and balances through robust committees or a revising chamber. It was, as Tony Blair once described it, nothing more than a glorified parish council.
Fast forward to 2021, and the Scottish National Party has been the ruling party in Holyrood for 14 years with most pundits predicting they will secure the minimum 65 seats (out of 129) required to secure an overall majority in May. Nicola Sturgeon is now campaigning on the premise that this majority will give her a mandate for IndyRef2 despite this being a reserved matter to Westminster and her own Party’s promise in 2014 that IndyRef1 was “once in a generation”. Furthermore, her minister Mike Russell has upped the ante by publishing a draft Referendum Bill to lay the ground for IndyRef2 “early in the new parliament”. The “clever” device designed in Westminster by Labour to repel the SNP has instead been hi-jacked by them and turned back on Westminster Pac-Man style as a weapon now primed to blow up the United Kingdom rather than protect it.
One of the most invidious features of the SNP is the stark contrast between their shrill demands for more devolution of powers from Westminster and their own outright refusal to push similar devolution of power down throughout Scotland from Edinburgh. They are, in fact, a party of central command and control. During their time in office, the SNP have unilaterally renamed the “Scottish Executive” the “Scottish Government”, systematically politicised the Scottish civil service into their operations arm, circumvented the Holyrood committee system, neutered the Scottish media, de-powered the 32 local councils and centralised the eight regional police forces into one Police Scotland. The resulting total absence of local scrutiny or challenge, combined with a masterful command of the airwaves exhibited by Sturgeon’s 150+ daily COVID TV briefings, allows the SNP to dominate the polls. This despite empirical evidence that, in every area of Scottish government policy, key performance indicators have gone backwards in 14 years, the most shameful being in education and the economy.
One well-kent Scottish politician who has a simple solution to breaking this SNP stranglehold is George Galloway, the colourful former Labour MP who now leads the Alliance 4 Unity. Galloway wants each of the pro-union parties in Scotland to stand down for the one strongest unionist candidate in each constituency, whatever the party, and by this means calculates the Alliance will win 89 out of 129 seats and put the SNP out of business. Quite what happens thereafter is less clear and, anyway, new Scottish Labour leader Anas Sarwar has categorically ruled out any electoral pact with the Tories.
The spectacular demise of the Labour Party in Scotland is, of course, the flip side of this nationalist surge. For years, Labour took Scotland for granted with their Westminster MPs turning up in Scottish constituencies once every five years to collect the client vote. Yet they were ineffectual in opposition against Margaret Thatcher’s de-industrialisation of Scotland and, when in government under Tony Blair, New Labour appeared no different from the Tories, pursuing a Westminster agenda including an unpopular war. It was into this vacuum that the SNP stole a march. For 80 years or so, the SNP consistently polled no more than about one third of the popular vote but it was the demise of the Labour Party which drove it to the high-water mark of 45 per cent in the 2014 IndyRef.
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Which brings us to the Conservative and Unionist Party of Scotland. How ironic that it is now the Tories who present the greatest barrier to a nationalist majority. The party that voted against devolution upon fears that it would lead inevitably to the break-up of the Union could end up being the party that saves the Union by embracing more devolution and making it work on behalf of the Scottish people. Gordon Brown’s proposed new constitutional settlement (reformed House of Lords, Forum of Nations and Regions, etc.) expresses the noble ambition of renewing and strengthening connections and relationships across the UK. But it is essentially federalism which cannot work on an island where England is dominant with 85 per cent of the population and 90 per cent of the wealth. Furthermore, despite Andy Burnham’s best efforts, there is no appetite for the 9 regional assemblies required in England to match the Edinburgh, Cardiff and Belfast assemblies which would make a federal administration in the UK balanced and fair.
Instead, a grown-up and responsible administration in Edinburgh which is focused on maximising devolution in partnership, instead of conflict, with Westminster could unlock the enormous potential of Scotland by giving Holyrood greater fiscal responsibility in return for greater accountability for how it spends the money it raises in Scotland. Currently, Holyrood controls 63 per cent of expenditure in Scotland but raises only 28 per cent of tax revenue in Scotland. Over 20 years, this is a considerable improvement on the opening position in 1999 when 56 per cent of expenditure was devolved but only 8 per cent of revenue which meant Holyrood was initially responsible for raising only 14 per cent of what it spent; no wonder Billy Connolly christened it “the wee pretendie parliament”.
It may seem perverse to suggest that the solution to this disastrous decade of SNP maladministration in Holyrood is to hand them more power and more control. But even more perverse is the current situation where Westminster is literally sending free money over the border (£13bn for COVID so far), yet the Nats still complain whilst not distributing that money to the hospices, farmers and small business for whom it was intended. It was the Scottish Tories’ own Strathclyde Commission which embraced this crucial insight that, if the Scottish Parliament was granted more powers over income tax, it would force her MSPs to answer direct to the Scottish people as to how it was spent instead of always blaming Westminster. Now is the time to follow through on their pioneering report.
There is now a logical case for corporation tax to be devolved (granted to Northern Ireland in 2015) which would take revenue raise up to 35 per cent and, post Brexit, full devolution of VAT would drive that figure up to 53 per cent. A parliament that was responsible for raising half its revenues would be far more accountable to voters and much less able to blame Westminster at every turn. But more so, a responsible Scottish Parliament with dynamic fiscal powers (meaning ability to lower taxes below UK rates but never above) could develop bespoke policy in Scotland to attract more entrepreneurs, drive more inward investment, encourage more business start-ups and create more high earners thus increasing the overall tax take and prosperity of Scotland for the benefit of all her citizens.
However, if the Scottish Parliament is to get more tax powers, Holyrood must now grow up in terms of scrutiny, challenge, transparency and accountability. One cannot happen without the other. As a priority, the committee system needs a complete overhaul. It has been excruciating to watch the Select Committee chaired by SNP veteran Linda Fabiani being unable to access key legal evidence in the Alex Salmond sexual misconduct case. This level of obfuscation and frustration by the Executive would never be tolerated in Westminster. So, while the Nats call for more powers, let’s force them to reciprocate with more transparency? Checks and balances are critical components in any mature democracy and the current mechanics of scrutiny and challenge at Holyrood fall way short of any minimum standard.
A Holyrood parliament that was reformed and focussed on a domestic agenda of increasing prosperity and fairness in Scotland, can then allow the UK to get on with what it does best deploying the seven pillars of the Union for the overall benefit of all four nations: the Barnett Formula, NHS, Pensions, Defence, International Affairs, Monarchy and Sterling with the greatest of these being currency. Most voters, even those who flirt with Independence, agree that issues such as foreign affairs and the economy are best dealt with by the UK.
Of course, Scotland could choose to be an independent country. But why chose austerity? When instead you can harness the power of the UK via these seven sturdy pillars of sovereignty which would take at least a generation to build from scratch. And where the greatest of these being Sterling gives Scotland access to funding at a scale and price it could never achieve on a stand-alone basis.
This is a golden opportunity for the Tories in Scotland to embrace more devolution and save the Union; by making the case for a responsible and grown-up government in Scotland focussed on increasing prosperity and fairness at home whilst working in partnership with a reformed Westminster. It’s time for the Scots once again to punch above our weight in this oldest and most successful Union of nations in the world.
Malcolm Offord is chairman of Edinburgh-based investment company Badenoch & Co. and is a Conservative candidate on the Lothian Regional List for the Holyrood election in May.