Lessons from Wales

Last week’s news from Wales was doubly important for those of us who advocate that Scotland should vote No to independence and Yes to devolution next September.

Home rule and fiscal responsibility

One of the Nationalists’ most devious foxes was shot, when David Cameron’s Tory-led government stood alongside Labour’s First Minister of Wales to agree a package of fiscal devolution for Wales. One of the Prime Minister’s most significant achievements as leader of his party is to have buried the Conservatives’ historic opposition to devolution. Mr Cameron is a keen and committed home ruler. In the Scotland Act 2012 his government delivered further devolution for Scotland. Last week his government followed suit for Wales.

It was little noticed given the emotion of the occasion, but in his interview on the BBC Radio 4 Today programme on the day of Margaret Thatcher’s funeral earlier this year, Mr Cameron explained something of the ways in which his party has moved on from the iron lady’s heyday in the 1980s. “Devolving power … to the nations of our United Kingdom” was identified as a principal change, and one he is rightly proud of. With a Welsh first name and a Scottish surname perhaps it is no surprise that David Cameron is a genuine Unionist rather than an English politician of the old school, unable to understand the basic difference between England and Britain.

It was Labour’s achievement, eagerly supported by the Liberal Democrats in the 1990s, to show how the old, London-centric, unitary account of the British constitution was no longer apt. While the consequences for the centre, in terms of finance and representation (the Barnett formula and the West Lothian Question) remain to be fully worked out, under the Prime Minister’s leadership, and once again with the eager support of the Lib Dems, all three Unionist parties are now wedded not only to the theory but also to the practice of genuine home rule for the nations of the Union. As I have said before, to be a modern-day Unionist is to be a devolutionist.

But devolution in both Scotland and Wales remains work-in-progress. The Scotland Act 2012, which will come fully into force only in 2016 (and, of course, only if we vote No to independence next year), begins the task of bringing fiscal responsibility to Holyrood, to sit alongside the Scottish Parliament’s already vast spending powers. Such was the key recommendation of the Calman Commission; and Calman’s Welsh equivalent, the Silk Report, recommended a year ago that a similar degree of fiscal responsibility should be conferred in Wales. What happened last week was that the UK Government agreed.

There are, however, two differences of note between what we’ll have in Scotland from 2016 and the position that is developing in Wales. The first is that Cardiff Bay will obtain powers over income tax only if this is agreed in a Welsh referendum. There was no referendum in Scotland before the equivalent powers were conferred in the 2012 Scotland Act. This may have been because, unlike in Wales, there was a tax question in the original Scottish referendum in 1997. None the less, it was a mistake on the part of the Unionist parties not to have a referendum on the powers contained in the Scotland Act 2012. It was a mistake because, without such a referendum, ordinary people in Scotland know next to nothing about what is actually in the 2012 Act. It is unloved, misunderstood, overlooked and ignored: this would not have been the case had there been a referendum here.

The second difference is technical. Under the Scotland Act 2012 the Scottish Parliament will have the power to set the Scottish rate of income tax, but whatever rate it adopts will have to be the same across all tax bands. At the moment the main bands are 20% and 40%. Under the Scotland Act the UK Government will levy income tax for Scottish taxpayers at 10% and 30%. It will then be for the Scottish Parliament to decide whether it wishes to make up the whole of the difference, less than the whole of the difference, or more than the whole of the difference. But, whatever it decides, its decision will have to be the same across all bands. So the result could be that in Scotland the main bands are 22% and 42%, or 19% and 39%, but it could not be that the bands become 19% and 42%: what goes for lower band taxpayers must also go for higher band taxpayers. By contrast, the Silk report recommended that this “lockstep”, as it is called, should not apply in Wales. If accepted, this would mean that the National Assembly would have more flexible fiscal powers than those which will be available to Holyrood after 2016.

We do not yet know the details of the way in which Scottish devolution will develop further after we have voted No to independence, but last week’s events in Cardiff surely confirm that develop it will. SNP scaremongering that a No vote will mean a reduction in (or even the abolition of) Holyrood’s powers have been exposed for the crude lies they are.

Constitutional process

Also important, however, about last week’s news from Wales is the fact that it reminds us as Unionists that Scotland’s relationship with the rest of the UK is not the only element of the Union. Scottish political life can be terribly parochial, as if the only centres of power that matter are Edinburgh and London. A truly Unionist vision of Scotland’s place in the UK after a No vote will take into account not only the English but also Wales and Northern Ireland. This is a challenge for Unionists, but also an opportunity: if approached properly it will help Scots move on from the navel-gazing of the independence referendum to consider with a little more maturity the future of the whole of our country.

To those of us who consider that constitutional debate should be a multi-party affair, rather than a one-man band, Wales again has something valuable to teach Scotland. Further devolution was delivered last week because all the Unionist parties agreed that that it was the right thing to do. There was no pressure from the threat of separatists. This was not designed to kill nationalism dead. It was done because it is believed in. It strengthens the Union. It’s the future for Wales, and after a No vote next year it will be the future for Scotland, too.

For a summary of the issues discussed here, see my very short analysis published in the Scotland edition of The Times on Saturday 2 November. 

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