A strong dose of Devo Max The third referendum option might be just what Scots Tories need
Something astonishing is happening in Scotland. For the first time in a political generation the Scottish Conservative & Unionist Party has an opportunity to become relevant to public life north of the Tweed. And it is all thanks to Alex Salmond, now the unlikely potential saviour of Scottish right-of-centre politics.
The First Minister is a formidable politician who appreciates that politics is frequently pregnant with irony. This is one such occasion: the Conservatives, steadfast opponents of devolution, can be saved by a stronger dose of Home Rule. That is, Tories should insist on the third option which Salmond wants to offer voters in the referendum on independence. This would fall short of total independence, but increase financial powers for the Scottish parliament. And it ought to end the current, fraught financial relationship system where England subsidises Scotland (or vice versa, if you believe the SNP) and set Scotland’s budget at whatever it raises in tax.
Devo Max or Devo Plus, as calls for greater Scottish fiscal autonomy are labelled, may sound like types of medicine guaranteed to banish fevers and migraines but they could also be the last, best hope this side of independence of curing the Scottish Conservative Party. If the patient responds well to the medicine, it might yet rise from a bed-ridden decade during which terminal decline seemed more probable than even modest recovery.
Fiscal autonomy might be Salmond’s consolation prize but it should be Ruth Davidson’s preferred outcome. The new Scottish Tory leader, the first lesbian kickboxer to lead a party, must know that if Scotland were responsible for raising her own income — and thus no longer dependent upon a block grant from London — she might be better governed than she has been. The Conservatives, as a party, specialise in growing economies and wealth creation. Yet such considerations are absent from Scottish politics as it stands: Salmond’s responsibility is to spend whatever he gets allocated by London.
It should be axiomatic that a government which does not tax is a government reduced to eunuch status that cannot, in turn, be trusted to govern prudently or plan for the future. The cheerfully spendthrift history of devolution has been a model example of financial irresponsibility and intellectual constipation.
At present, the government in Edinburgh is charged with dispensing 60 per cent of total state spending in Scotland but raises less than 7 per cent of the money required to pay for publicly funded largesse.
As the Calman Commission charged with investigating how devolution might be ‘improved’ noted with commendable understatement, this means:‘Voters are not exposed to tax and spending decisions at the margin, meaning that a degree of political accountability for the taxation which supports spending decisions is missing.’ That’s unfortunate, but worse still, ‘The disconnection between revenues and economic performance also means that the incentives to develop growth are secondary rather than immediate.’
No wonder, as has been oft-observed this week, there are more pandas in Scotland than Tory MPs. Indeed, the type of spending carried out in Scotland is the kind of ‘soft’ issue upon which the left traditionally enjoys some advantage (health, schools etc) but taxing is the kind of ‘hard’ issue upon which the right, even in Scotland, can make some headway. Fiscal autonomy (of one degree or another) might usefully be renamed ‘fiscal accountability’. It binds voters closer to their government and makes their government more responsive to the electorate’s concerns. A Conservative party truly enthused by localism and financial discipline would embrace measures promoting these goals.
One of the ironies of devolution is that the system was designed to protect Scotland from change, not to act as its catalyst. Nor were the SNP the principle target; that
‘Your wife’s here… she just wants to say goodbye.’
honour was reserved for the Scottish Conservatives. As far as Labour (and the Liberal Democrats) were concerned the SNP was to the Conservatives as Japan was to Germany in the second world war: a vile foe but not the primary enemy. Change to the devolution settlement was seen as anathema because it might challenge the stale bromides of leftwing orthodoxy which took root in Scotland. The Conservatives have since kept quiet, fretting that anything they said would only remind Scots why they hated these leprous Tories in the first place.
That fear can no longer be allowed to dictate the Conservatives’ position. Ever since the party abandoned Alec Douglas-Home’s 1979 promise to introduce a better devolution bill, the Tories have been saying ‘no, no, no’ to Scotland. It is time to say yes, for once and at last. Opposition to devolution was brave but doomed since that battle was lost long ago. There is no need to refill these ditches with yet more noble Tory dead simply to satisfy some outdated unionist sense of honour.
It does not hurt that greater fiscal autonomy within the union is a popular measure, satisfying Scottish desires for greater selfgovernment without sacrificing the union entirely. Edinburgh is already, in terms of political psychology, semi-detached from London; fiscal autonomy would make it three-quarters detached. This would not necessarily be a step towards divorce. On the contrary, it could be nationalist enough for most nationalists and unionist enough for most unionists.
Better still, ending the reliance on the block grant and Barnett Formula but allowing Edinburgh to keep the proceeds of growth (including a geographic share of oil revenues) could help create the conditions for a revival of centre-right politics in Scotland. It is hard to see what else, short of actual independence, can do so. Braver kinds of Tory, including Sir John Major and the new MPs behind the book After the Coalition, have argued it is time for Scotland to take greater command of her finances. Can the Scottish Tories be quite so imaginative?
The final irony is that Alex Salmond understands that fiscal autonomy might make the case for fully fledged independence unnecessary. Once it is granted, all that stands between him and nationhood is an army (which he would not use), a diplomatic corps and a few flags, many of which he has hoisted anyway. It would be hard, almost impossible, to argue that independence would make a real difference. Demand for separation may dissolve completely, as it has in the Basque Country granted ‘Devo Max’ from Spain.
It would be a grave pity if the Scottish Tories, as seems probable, prove incapable of recognising the scale of the opportunity in front of them. The lifeline Salmond has (unintentionally) thrown them may be prickly as a thistle but they should grasp it as firmly as they can.
the spectator | 14 January 2012 | www.spectator.co.uk