The on-going debate about further devolution inevitably reminds me of Charles Dicken’s Oliver Twist and those famous lines “please sir, I want some more.” Oliver has just had, in his opinion, some meagre rations and approaches the workhouse master looking for some more.
However, where further devolution differs from Oliver Twist is that the UK Government doesn’t react with outrage to the request. Instead it accepts that maybe Scotland should receive more powers than those currently outlined under the Smith Commission and enclosed within the proposed Scotland Bill. Just not enough to please the SNP.
And here we arrive at the nub of the current political debate. The merits of Full Fiscal Autonomy (FFA).
FFA would deliver full responsibility for all areas of tax and spend except for defence and foreign affairs (what the SNP say they want) but at the cost of losing Barnett funding (what the SNP don’t want). The independent Institute for Fiscal Studies (IFS) recently estimated that such a move would lead to Scotland having a £7-10 billion hole in its public finances on top of Scotland’s share of the UK national debt.
The UK Government and Labour have seized on the IFS report as reasoning enough not to enact FFA. They argue this would lead to the Scottish Government having to implement public spending cuts and tax rises that make the last 5 years of austerity look like a picnic. They also point towards the duplicity of the SNP in fervently opposing the latest round of austerity that will result in a Scottish Government budget cut of £107 million, while wholeheartedly supporting a policy that would potentially give Scotland a £7-10 billion-plus budget problem.
For opponents of FFA, the problem is that no one outside the political bubble is listening. Scottish Labour essentially ran its General Election campaign on a FFA for Scotland is ‘bad’ position. And look what good that did the party.
This has led the Secretary of State for Scotland David Mundell MP to ask whether “the SNP are asking for something they don’t really want, but of course will complain if they don’t get it.”
On the other hand, the SNP rightly point to their newly acquired mandate given to them by the Scottish people. They campaigned on a platform of FFA and therefore the UK Government should “respect” the General Election result and deliver. They say that, despite signing up to Smith, the recommendations don’t go far enough and should be amended. They even published Beyond Smith – its proposals for more powers for Holyrood – earlier this week, which outlines what it would do with increased control over certain business and welfare powers – without mentioning deficit reduction.
With the defeat of its FFA amendment at Westminster earlier in the week, the SNP have again been able to frame the debate as it defending Scotland’s interests against the Unionist establishment. As, let’s face it, who in their right mind would argue against the idea of strengthening the link between taxation and expenditure in Scotland. And here we link back to Mundell’s earlier comments. The SNP knew the amendment would fail, so proposing it would cost nothing to them, while simultaneously highlighting the confusion in the Unionist approach to devolution and allowing them to continue to push the ‘standing up for Scotland’ message.
So what are the merits of FFA? In the short-term, according to organisations like the IFS, it is likely it would lead to the end of Barnett and a deeper, larger and longer period of austerity – though it would also allow Scotland to navigate its own deficit/debt reduction course and better focus resources to priority areas.
In the longer term, however, greater autonomy for Scotland could bring about a new, devolved settlement for the entire UK – a settlement that is arguably long overdue – and in doing so, potentially lead to a unionist revival.
With the Tories, Labour and the Liberal Democrats set against FFA at this juncture, there is little the SNP can do to force the issue. We can therefore expect the SNP to continue to trumpet the merits and aspirations of FFA, as long as the public’s desire remains unfavourable towards outright independence.
However, this in itself is a fine balancing act to maintain. Continuing to push FFA will only serve to highlight the lack of real clout the SNP wield at Westminster without the support of one of the two main parties and therefore its ability to ‘stand up for Scotland’.