Reflections on 2014

I haven’t blogged since before the referendum. Even now it feels a tad early. The referendum campaign ran for more than two and half years and it’s only three months since the vote. There is a lot to learn, and a great deal to recover from. Good friends who were on the other side of the argument from me spent much of the autumn in mourning. This is not an exaggeration. For many Yes campaigners something core to their worldview was lost on 18 September and they are right to grieve its passing. I wrote before the referendum that after September we would need magnanimity from the winners and acceptance from the losers. To my mind there has not yet been enough of the latter. The reconciliation of which the Queen spoke in her Christmas broadcast will not happen until unionists come to terms with the fact that 1.6 million of our fellow citizens were so unhappy with the United Kingdom that they voted to leave and nationalists accept that, despite this, they lost.

But let us be patient. Some wounds take time to heal.

And the referendum campaign was wounding. There is an awful lot of collective self-congratulatory back-slapping about the conduct of the referendum. It was wonderfully inclusive. It displayed unprecedented levels of voter participation, from teenagers to pensioners and from the Borders to the Islands. It was an almost entirely peaceful and exemplary way of conducting constitutional politics. All true. But, equally, this is only one part of the story. For many of us the referendum was horrible – and this needs to be said. As with any binary question it was necessarily polarising, but in communities that did not necessarily want to be polarised. It was divisive. Oftentimes it was bitter. It was hard-fought. I make no complaint. I fought. And I fought hard. But let’s not delude ourselves about it all being rosy and cuddly and lovely and friendly. I never want to have to go through it again.

Why did we win?

We won because we won the argument. There is a view in some nationalist quarters that we won because of the Vow. This is a nonsense. The Vow was a front-page commitment in the Daily Record on 16 September (two days before the referendum) that a No vote would mean more powers for the Scottish Parliament, further devolution, and change. It said precisely nothing that had not already been said many times over by the UK Government, Better Together, and the three unionist parties. For sure, it helped to land and to drive home messages we had previously laboured over, but the Vow was not new.

It was judged necessary because of the way the Yes campaign had conducted itself in the closing weeks of the summer. Yes emptied itself of more or less all content and became a rhetorical vessel into which you could pour all your hopes and fears, all your frustrations and aspirations. No longer a constitutional argument about independence, it became the only way of saving the NHS (despite the fact that the NHS is already fully devolved to the Scottish Parliament), the only way of securing social justice (however defined), the only way of achieving a more equal society, the only way of pushing up wages, etc. Such is the anti-politics, anti-establishment and anti-Westminster mood in parts of Scotland that Yes found an eager audience for their rhetoric, especially in Glasgow, Dundee, Lanarkshire and Clydebank. The opinion polls narrowed and, ten days out from the referendum, Yes finally took the lead.

To meet this challenge, Better Together felt that they too had to say something about change. The “more powers” argument had never gained the traction it deserved, partly because the three unionist parties disagreed with each other about the shape and size of the new powers which should be devolved to Holyrood. But more importantly, the argument was failing because it was dull. Talk about devolution with voters on the doorstep and their eyes glaze over. Arguments about devolution have become technical and nerdy. The contrast with the 1990s could not be greater. At the time of the Scottish Constitutional Convention “home rule”, because it was then an aspiration, was exciting. Now that it’s been delivered it’s a reality: part of ordinary life, not a dream to fall in love with.

So the “more powers” argument needed to morph into a “change” argument. Thus, we heard, a No vote is not a vote for no change. A No vote means safer, faster change than the uncertainty and risk of a Yes vote. Vote No and we’ll safeguard the NHS. Vote No and we’ll confer powers on the Scottish Parliament to address inequality and social injustice. Vote No and you’ll get the change you crave. Our change is better than your change. Etc. You could almost hear the echoes of the Obama presidential campaign: vote No for change you can believe in.

What mattered about the Vow was not its content but where it appeared. The Scots who were driving the change in the opinion polling were Labour voters from Labour heartlands, precisely the people that Nicola Sturgeon’s wing of the SNP have been so successful at peeling away from their long-standing (but default) support for the Labour party. For two long years Better Together had struggled to reach these voters – the ground campaign in places like Glasgow was woeful – but, if they read a paper at all, these voters read the Daily Record. From time to time a tabloid front page is so simple, so graphic, and so brilliantly well timed that it achieves the impossible in journalism. Today’s newspapers are, as we all know, tomorrow’s fish’n’chips wrappers. Even good journalism (of which there was plenty in Scotland’s indyref) is forgotten overnight. Exceptionally, however, a tabloid front page achieves notoriety. The Sun on election day in 1992 (depicting Neil Kinnock, with the headline asking the last person to leave Britain to please turn out the lights) is an example. So too is the Vow.

Brilliant tabloid journalism, yes. But not the reason we won. We won because we won the argument. The case for independence was never made. Most Scots don’t want to break up Britain. They want what’s best for Scotland, for sure, but they understand that Scotland’s future is safer and better secured inside the Union in which Scotland has flourished for 300 years. There has never been a majority of Scots in favour of independence, and it was always the tallest of orders for the Yes campaign to manufacture one. Better Together’s job was to identify the weaknesses in the Yes campaign’s argument and to exploit them. This it did ruthlessly. Scots saw through the bluff and bluster on the other side and understood the SNP’s disastrous currency position, the radical uncertainty about future EU membership, the refusal to come clean about the start-up costs of creating a new Scottish state, their untrustworthiness on the oil price, and the fact that the Union was delivering for Scotland and was not the great enemy of progress of nationalist nightmare.

What Alistair Darling called the quiet majority of Scots was always going to vote No, and for these reasons: not because the Vow promised the faster delivery of more powers for the Scottish Parliament, but because the case for independence was never made. The narrowing of the opinion polls in late August and early September gave us the fright of our lives, and there was no little panic in the heat of the campaign to save the Union, but in the end it was all unnecessary. Alistair Darling was right to remain calm. The pollsters under-estimated the numbers in which No voters would come out to vote. Differential turnout was one of our greatest fears in 2013 but, on the day, the difference was in our favour. The Sunday Times crossover poll ten days out from the referendum, in which YouGov gaveYes a two-point lead, frightened the hell out of the quiet majority, and caused turnout in some of the most pro-Union parts of Scotland to rise above 90%. No-one had predicted that. By contrast, Yes Scotland’s famous ground operation, about which we heard so much noise during the campaign, could deliver only a 75% turnout in Glasgow.

What did we win?

We won the right to set the terms of Scotland’s ongoing constitutional debate. The independence referendum did not end that debate but it did decisively determine its future direction. Instead of negotiating the terms of separation, which would have been awful, we spent the closing months of 2014 negotiating how to build the Scottish Parliament so as to secure Scotland’s ongoing place in the Union. It’s been a wholly positive and forward-looking conversation, unlike so much of the indyref debate. I am and always have been a devolutionist. I have always understood devolution as an avowedly Unionist solution to Scottish government. Like most folk living in Scotland I like devolution and I want more of it. It works because it allows us to take charge of our own domestic policy without tearing up the country and leaving the UK. But it doesn’t work perfectly. In a 307-year Union we’ve had devolution for only 15. We’ve still got a lot to learn about realising its full potential.

Devolution has delivered stable government for Scotland, whether under coalition, minority, or single-party majority rule. Resort to the courts has occurred only rarely and, when there have been legal disputes, they have been brought by insurance and tobacco companies, not by Whitehall. Westminster has left Holyrood to legislate on devolved matters and has not sought to trample on Edinburgh’s patch. The reality of devolution is that Scotland’s two governments routinely co-operate with one another, even though, as is only natural in politics, there are sometimes disagreements between the parties.

But what devolution has failed to deliver is the much needed ending of the grievance culture of Scottish politics (what my friend Toby Fenwick has dubbed on Twitter “grievo-max”). Holyrood takes the credit for what goes well, and Westminster, the English, or the Tories are blamed for what goes wrong. This is partly a function of the SNP’s well-oiled PR machine but it also has deeper roots, in the very nature of the way devolution was established by Labour in the 1990s. The Scottish Parliament is already a very powerful legislature when it comes to spending other peoples’ money: two-thirds of public expenditure in Scotland is under Holyrood’s control, with only one third being under Westminster’s. But the Scottish Parliament is not responsible for raising very much of the money it spends. The Scotland Act 2012 (the result of the Calman Commission) devolves some tax-raising powers to Holyrood, but it has long been clear that, if the goal is to reverse grievo-max, it was never going to be enough. This is why the core of the unionist parties’ plans for further devolution after the independence referendum centred on fiscal devolution: on the devolution to the Scottish Parliament of much more extensive tax-raising powers.

Yet, within a single state, caution has to be exercised. The tax code is already complex enough. Tax collection is already expensive enough. Tax avoidance should be discouraged and penalised, not incentivised. And tax competition within a single state could lead to an unplanned decline in public revenues. For these reasons some taxes are more amenable to devolution than others. Corporation tax, excise duties and taxes on capital are the least suitable for devolution (i.e. capital gains tax and inheritance tax). At the same time, taxes which are closely linked to UK-wide social security such as the state pension should surely remain at UK level and not be devolved (ruling out the devolution of national insurance). Income tax, however, is easy to collect (through PAYE), hard to avoid and, most important of all, very highly visible. Putting politicians in charge of the rates at which we pay income tax is a sure-fire way of making them directly accountable to the voters not only for the money they want to spend, but also for the much more difficult question of from whom and in what quantities they want to raise it. Income tax devolution has two further attractions: it is a high yield tax (so its devolution generates a lot of revenue for the devolved legislature) and it is relatively stable. Tax revenues from North Sea oil and gas, by contrast, are highly volatile. The last thing a unionist should want is to devolve to Holyrood a range of fiscal powers that would make the Scottish public finances more unstable. (One of the interesting things about the Smith Commission is that the SNP did not want to talk about oil at all.)

The Smith Commission was an all-party group of (mainly) politicians tasked with the responsibility of agreeing a package of measures for further devolution to Scotland in the light of September’s No vote. There were two representatives for each of the five parties in the Scottish Parliament – I was one of the nominees for the Scottish Conservatives – and we were chaired by the independent peer, Lord Smith. We met in full plenary session on nine occasions between 22 October and 26 November. Our agreement was published on 27 November. All five parties signed up to it in full: no reservations were entered and there was no dissenting opinion attached to the report. It was, of course, an immense honour to play a role in it.

The most important thing about the Smith Commission is not what we agreed – although that is important! – but that all five parties were sitting, talking and working together to reach an agreement. This is the first time in Scottish political history that both unionists and nationalists co-operated in this way. The Scottish Constitutional Convention in the 1990s was boycotted by the SNP and, for different reasons, by the Tories. More recently the SNP had their “national conversation” while the unionist parties had their Calman Commission. But in Smith we all sat down. Together. And we all stayed, right through until the end.

Personally, it was not remotely difficult to stay. I wanted to talk to the other side. I wanted them not to be the other side any more. This was the magnanimity I wanted to see from the indyref’s winning side. I wanted a constitutional politics that was no longer polarising and divisive, but accommodating and inclusive. This is how it would have been had we lost the referendum: as the then First Minister said, if he’d won he would have put together an all-party Team Scotland to undertake the hugely complex and fraught task of unravelling the Union and building the new state. I had indicated to my friends in the SNP that I would have agreed to join Team Scotland, should I have been asked to. Had we lost the referendum I would not have sat on my hands, written endless “I told you so” blogs, and plotted to have the result reversed the next time. There would have been no next time. And if there would have been no next time had Yes won, why should anyone think there should be a next time now?

Did we win?

The post-referendum period of Scottish politics has been very different from how we had thought it would be. We had rather fondly imagined that losing the referendum would be traumatic for the SNP and that they would struggle in its aftermath. But this has not happened. The SNP’s membership has surged, from something like 25,000 members to approaching 100,000 members. This is phenomenal. At the same time, they have enjoyed a more or less seamless leadership transition. Nicola Sturgeon was one of the indyref’s outstanding performers and it took her no time at all to find her feet as Scotland’s new First Minister. I disagree profoundly with much of her politics, but she is truly impressive. I have great respect for her – and that is something I could never have written about her predecessor.

The Scottish Labour party also has an impressive new leadership team, although it is always harder for the opposition than it is for the government to set the agenda, or event to set the pace, doubly so when your new leader is not (yet) a Member of the Scottish Parliament. But Jim Murphy is talented enough to know how to turn that to his advantage. His eyes will be firmly fixed on the 2016 prize and he will not be overly distracted by the 2015 general election.

The UK political scene in the first half of 2015, however,  will be dominated by that election. The Better Together alliance is no more. The election is a straight fight between the two major Better Together parties: come May either the leader of the Conservatives or the leader of the Labour party will be Prime Minister, although the unpopularity of both main parties is such that either is likely to require the support of one (or more) of the smaller parties to form a government. Current opinion polling suggests that the SNP will eat substantially into Scottish Labour seats – it was the Labour heartlands of West Central Scotland that voted Yes, after all. If Labour lose large numbers of their 41 seats in Scotland it will be far harder for Ed Miliband to find his way to Downing Street. This, no doubt, is why the nationalists fill their speeches with so much anti-Tory rhetoric. These (ex-)Labour voters won’t vote for the SNP if they think the nationalists will prop up a Cameron-led government.

In this environment, is the Union safe? It does not always feel like it. But, in Scotland at least, it should. If the economic case for independence was not made during the referendum campaign it would be even harder to make it now. The SNP’s modelling of an independent Scotland’s economy was based on what we now know were ludicrously optimistic forecasts as to the oil price. Whereas the SNP forecast an oil price of $113 per barrel, since September the price has crashed to barely $60 per barrel. Alex Salmond’s Team Scotland would be leading Scotland to disaster right now had 200,000 No voters switched to voting Yes. We came perilously close to economic ruin, and I hope there is a full parliamentary inquiry into whether the Scottish Government acted responsibly in preparing the economic arguments about an independent Scottish economy. Optimism is not a constitutional wrong: but recklessness is.

The real danger to the Union now is coming not from Scotland but from south of the border. When I moved from England to Scotland in 2003 I remember saying that the Union would be robust enough to withstand the challenge of Scottish nationalism. Apart from a ten-day wobble when I could feel the ground moving in late August and early September I have always held firm to that view. But the Union may not be strong enough to constrain the forces of English nationalism, should they ever be unleashed. My fear for the Union is that they are. England has not kept pace with the devolutionary changes from which Scotland, Wales and Northern Ireland have benefited and the English are more than beginning to notice. It is no doubt to foment English disquiet that Mr Salmond has decided to seek a return to Westminster.

The solution to the English question lies not in the creation of another tier of unwanted government there – few mourn the passing of John Prescott’s regional development agencies – but in having the courage to face up to the consequences of devolution, consequences which have been ignored for too long. These consequences are two-fold, and they go to the core of the constitution. The first concerns representation and the second money. Westminster is England’s Parliament as well as the UK’s and a way urgently needs to be found to ensure that the laws it makes are determined by the appropriate body of MPs. UK laws should be made by MPs from across the UK. But laws which affect only England should be determined – at least in their detail – by MPs representing seats in England (“English votes for English laws”, as it is sometimes called). As for money, the financing of devolution has been via the block grant, which is calculated according to the Barnett formula. This is complex, wholly lacking in transparency and, as a result, badly misunderstood. Urgently in need of reform, the Barnett formula is unfair in different ways both to England and to Wales. The good news is that, as we move towards fiscal devolution, Barnett becomes less important (because the Scottish Parliament will raise more of its budget directly through taxation, the size of the block grant decreasing as this happens).

In Scotland we unionists have been forced by the challenge of nationalism to look deeply into our unionism. We understand it much better now. For decades it was passive, default and unexamined. No longer. The independence referendum forced us to articulate what our unionism is for. For the Labour party the core of the case for the Union is about the pooling and sharing of risks and resources. For Conservatives it boils down to two words: trade and security. The UK is a genuinely single market (giving Scots fully ten times bigger a domestic market than we’d have under independence) and, like all states, the UK’s most vital role is to protect internally and externally the security of its citizens. That doesn’t just mean defence and international relations; it means the state pension and our economic security as well.

Once you have understood what the Union is for, the task of distinguishing between powers that should be devolved and those that cannot becomes easy. For a Conservative, powers can be devolved unless they start to cut into or undermine the UK’s single market or collective security. Thus, universal credit cannot be devolved (because it relates directly to the labour market, welfare reform being designed to smooth the path from welfare to work). Likewise the state pension. But other aspects of welfare can be devolved. Hence the agreement reached in the Smith Commission to reserve the state pension and universal credit but to devolve much of the remainder of the welfare budget.

English unionists, by contrast, have not had to think through, articulate and defend their unionism as we have had to do in Scotland. North of the border we have come to understand that in order to safeguard what we cherish we have had to allow it room to adapt and change. We have learnt that a looser Union is a stronger Union, that enhanced devolution is not a consolation prize to nationalists for coming second in the indyref, but the means whereby we ensure that the Union endures and flourishes. Little of this is comprehended in England. While all five Scottish parties were sitting around the Smith Commission table, Labour refused point blank to engage with the coalition in their attempts to solve the “English votes for English laws” puzzle. One nation’s constitutional politics is mature; the other’s is juvenile. In one nation the parties rose above partisan interest to seek common constitutional ground; in the other the public interest continues to be reduced to mere party advantage.

That said, perhaps the contrast is not so great. Whereas the SNP participated fully (and constructively) in the Smith Commission deliberations, the moment Smith reported they sought to rubbish its achievements. This was a rare mis-step by the SNP and impressed nobody. Of course Smith does not go as far as the SNP want – what they want was rejected by the Scottish people in September – but to deny that the agreement constitutes a significant devolution of extensive further powers is just daft. Once Smith is delivered, in a Scotland Act to be enacted after the general election, Holyrood will be one of the most powerful sub-state legislatures anywhere in the world. Scotland will be more powerful in the UK than the states are in the US, more powerful in the UK than are the Australian states, and more powerful in the UK than are the Länder in Germany.

Scottish politics in 2014 has been all about the constitutional question. In 2015 we need to refocus to concentrate not on the question of “what powers do we want” but on that of “how is the SNP government exercising the formidable powers it already has”. But constitutional politics is not going away any time soon. Scotland’s constitutional future was won by the unionists in September, but the Union we fought so hard to maintain will not thrive in the longer term if England’s needs are not addressed. Perhaps I should start a new blog for 2015: Notes from South Britain.