The two Scottish Leaders’ debates staged in the last week have been fairly refreshing. The first reason for this is to do with the personalities involved. In Nicola Sturgeon, Jim Murphy and Ruth Davidson, Scotland has three very competent and articulate political leaders. Additionally though, the debates in Scotland actually saw substantive disagreements emerging between the parties. Trident is one obvious issue where this occurred. However, perhaps the most important area of debate that has been flagged up is the question of full fiscal autonomy for Scotland.
Full fiscal autonomy would mean Scotland becoming self-reliant in terms of its taxing and spending. Unsurprisingly, the SNP are fully in favour of this measure. Labour, the Conservatives and the Liberal Democrats have come out against the policy, citing a report by the Institute of Fiscal Studies arguing that this arrangement would create a £7.6 billion “black hole” in Scotland’s budget.
Whatever the rights and wrongs of this claim, it is unsurprising that the unionist parties are deploying it. On one level, it is clearly a logical stance for unionists to cite the benefits of shared fiscal arrangements across the constituent nations of the UK. As importantly though, this argument also re-raises the spectre of economic uncertainty, employing rhetoric similar to that used by Better Together during the referendum campaign.
Clearly, the Scottish election campaign is going to be vitally important to the overall election result and the government that emerges from it. However, the discussion of full fiscal autonomy suggests that it could also be vitally important to the constitutional future of the UK. Certainly the issue raises some very big questions, which have not really been addressed yet.
In the shorter term, it would be interesting to know whether either the pro-full fiscal autonomy SNP or the anti-full fiscal autonomy Labour Party regard the issue as a redline in any negotiations that might occur post-election. If both parties were to see the issue as something they could not compromise on, this could considerably complicate any arrangement they might try to form together. This problem could be further exacerbated by an election result that sends very mixed messages about whether people in Scotland want full fiscal autonomy. On the one hand, it looks likely that the SNP will be by far the largest party in Scotland in terms of MPs, sweeping all before them. That said, the majority of voters in Scotland might still have voted for parties that are against full fiscal autonomy, if support for Labour, the Conservatives and the Liberal Democrats is combined. In this situation, what claims could legitimately be made about the wishes of the Scottish electorate?
The second issue is longer term, and arises in the event of the introduction of full fiscal autonomy. It is perhaps best termed “West Lothian Question Max” – in other words, an extension of the original problem identified with devolution by Labour MP Tam Dalyell in the late 1970s. Dalyell argued that establishing a devolved parliament with jurisdiction over certain areas of Scottish policy created a fundamental inequality in the British law making process: English MPs in Westminster would have no say over these devolved areas of Scottish policy, but their colleagues elected for Scottish constituencies would be able to vote on legislation for England. This is not just a hypothetical problem: research by MySociety found that 21 votes in Parliament since 1997 would have had different results if Scottish MPs were excluded. This is actually a relatively small number considering that MPs voted 5000 times during this period. However, the votes where Scottish MPs proved decisive included some very high profile legislation, such as the introduction of Foundation Hospitals in November 2003 and the increase in university tuition fees in January 2004. Neither of these measures had any direct effect on Scotland.
Of all the parties in Scotland, it is the SNP that has most directly acknowledged the West Lothian question in its behaviour, committing that its MPs in Westminster would only vote on matters that directly impact Scotland. However, this stance might have proved problematic in the event of a hung parliament, so it was not surprising in January when Nicola Sturgeon broadened the definition of legislation that SNP MPs would vote on. Sturgeon argued that:
“On health, for example, we are signalling that we would be prepared to vote on matters of English health because that has a direct impact potential on Scotland’s budget. So, if there was a vote in the House of Commons to repeal the privatisation of the health service that has been seen in England, we would vote for that because that would help to protect Scotland’s budget.”
However, the model of full fiscal autonomy advocated by the SNP would torpedo this argument. Scotland’s NHS would be wholly financially independent of the system in England, so the rationale for taking a broader role in Westminster politics would disappear. This would be true of any Budget bill proposed in Westminster. Yet one of the requirements of even the loosest arrangement between Labour and the SNP would be passing a Budget through the Commons. However, (outside the relatively narrow areas that full fiscal autonomy would preserve for UK-wide spending, such as defence and foreign policy) this bill would have absolutely no influence on Scotland. This is the central challenge of the “West Lothian Question Max”, created by the combination of full fiscal autonomy and a government needing MPs elected in Scottish constituencies to sustain itself in office.
This raises two interesting further questions. First, is there a rhetorical strategy that Labour and the SNP can develop to justify this situation? In other words, even in a political set-up with full fiscal autonomy, will it still be possible to argue that there remains a shared political destiny shaped by decisions taken in Westminster? Second, how will voters across the UK react to such a situation, if it were to arise, and what might this mean for the future constitutional stability of the United Kingdom?