The dividing lines have shifted, but not by much. The result of the referendum represents a blow to those who have campaigned tirelessly for decades. Yet the resilience and determination of those campaigning for a better Scotland has been impressive. Now the challenge is to get the best deal for Scotland. There will now be an even wider coalition who support this.
In a panicked response to the growth in support for independence, Cameron, Clegg and Miliband promised ‘Devolution Max’ by next February. The phrase ‘devolution max’ – which is from the Steel Report and ‘Your Scotland, Your Voice’ report – includes the devolution of all tax and social security powers. Opinion polling after the vote found that 25% of No voters did so for more powers.
Anything less than this will be viewed by the people of Scotland as a failure of Westminster to deliver on the economic powers Scotland’s economy needs. Membership of Yes supporting parties has more than doubled and membership of Business for Scotland also continues to grow.
The growing support for substantial devolution
It will be impossible for Westminster to ignore the growing support for substantial devolution of powers over offshore revenue, energy, industrial and research policy, social security and broadcasting. David Moxham, Deputy General Secretary of the Scottish Trades Union Congress, argues that Westminster needs to go further as it has before. Iain McWhirter argues that the promises made in the campaign can now be expanded to Scotland’s advantage.
There are difficult questions and much work to be done in the mean time. There are practical, economic and electoral considerations – from the prospect of how powers will be delivered to how best to strengthen Scotland’s economy and plans for the May 2015 General Election.
In any case, the pressure is now on Westminster to deliver maximum devolution for Scotland. If they fail, another referendum on independence is inevitable. In the short term, Scotland must unite to gain full control over tax, economic powers and social security required to improve the economy and protect public services.
Tax and borrowing
For Scotland to have financial responsibility a majority of tax income must be devolved.
The Liberal Democrats already recognise that income tax, capital gains, inheritance tax and other taxes should be devolved.
A Devolution Max proposal must include offshore revenue. The Liberal Democrat report by Lord Steel supported this position. Economic think-tank N56 supports moving regulation from London to Aberdeen.
The No Campaign argued that oil revenue was vital to Scotland’s economy. Therefore it makes sense to devolve revenues from the industry to Scotland. Scotland, with access to this revenue, will ensure a strong financial position and to create a national investment fund for future generations.
Investment and economic powers
Control over economic powers is in many ways more important than control over income sources.
The ability to set industrial policy, research priorities, business innovation and labour market regulation are key components of driving forward a successful economy. The ability to invest revenue streams is crucial to improving Scotland’s financial position, so control over revenue can lead to more investment projects led by the Scottish Government.
The combination of revenue and economic powers can lead to greater support for Scotland’s key sectors – and with this Scotland can create more jobs. Anything short of this position would represent a failure of Westminster to deliver.
It’s clear that social security support will face major cuts from Westminster. George Osborne has promised £25 billion in spending cuts and Ed Balls has already outlined plans to cut child benefit, means test winter fuel allowance and raise the retirement age. Meanwhile the transition to ‘universal credit’ has plagued the system with turmoil and delays.
The only way to protect the vulnerable and create an effective social security system in Scotland is to devolve its operations.
This must include child and working tax credits, disability living allowance, attendance allowance, housing benefit, income support, incapacity benefit, job seekers allowance and statutory maternity pay.
Scotland runs enterprise policy, social housing and care for the elderly. Control over employment support, housing benefit and incapacity support compliments these operations.
International promotion & recognition
Scotland can expand its international exports through investing in Scotland Development International. Scotland should also receive guarantees of proper representation within the UK Trade and Investment network.
It was previously suggested that Scotland was represented at the European Union on devolved issues. This was proposed by Labour’s Robin Cook. This would allow Scotland to represent domestic interests in areas such as fishing, energy, agriculture and trade.
It’s clear that Scotland has been consistently short-changed on issues of broadcasting output. The £320 million contribution from Scotland should be reflected in output investment – so that jobs are fairly distributed. The devolution of broadcasting will ensure proper representation of Scotland’s economy, politics and culture to OfCom and create more opportunities in Scotland. Over 21,000 people have already signed up in support of devolving broadcasting.
A military review
The renewal of weapons of mass destruction on the Clyde is now inevitable. Cuts to the conventional military will also continue. In these circumstances, there must be a review of Scotland’s contribution to military spending and what is received in return.
A new conversation
These are only some early suggestions on the progress towards ensuring the best possible deal for Scotland. Tell us what you think and let us know what powers you believe Scotland should have under “Devolution Max”. The new conversation on powers for Scotland has started.
Join Business for Scotland – Sign the business declaration