Euan McColm: Smith changes could bring house down

Reforms package "goes a long way further than anyone on the losing side had any right to expect". Picture: Greg Macvean

Reforms package "goes a long way further than anyone on the losing side had any right to expect". Picture: Greg Macvean

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IMAGINE, if you will, that you live in one of Scotland’s magnificent Victorian tenements (those of you who do live in one are excused from this part of the exercise).

You love the flat, with its high ceilings and beautiful cornicing, but recently you’ve started to watch TV shows about home improvements and last week there was this couple from Brighton who’d turned their listed apartment into a modernist dream. They’d knocked through between the lounge and the dining room, bought an arco lamp, and painted one of the walls slate grey, the way people do these days.

Ignoring the fact that the couple from Brighton’s obsession with their home masks the lovelessness of their wretched relationship, you decide to do something similar. You buy a sledgehammer. Six months later, as you slump back in your Eames recliner, you see a crack spread across the ceiling. The lights fizz. From two floors above comes a shriek.

The thing is, of course, that because you changed the structure of your flat, the structure of all the surrounding flats has changed. The walls that once held the building together are fractured. You might be very pleased with your Sunday supplement-friendly dream home, but whether the block will remain standing for much longer is far from certain.

The bricks and mortar that support the United Kingdom have been in place for a lot longer than those holding up that tenement you’ve just destroyed.

Last week, politicians from Scotland’s five main parties agreed a proposed package of new powers for Holyrood that will fundamentally change the country. In transforming Scotland, this new settlement will alter the structure of the UK.

But although the unionists of the Labour, Conservative, and Liberal Democrats have enthusiastically agreed significant new powers for Holyrood (in a package supported and then immediately attacked by the SNP and Greens), there are those in their ranks who fear that the UK will be considerably weakened when the transfer of powers takes place.

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Despite the SNP and Greens whinging that Smith’s proposals do not go far enough (and these were ill-judged and cheap political digs. How marvellous it would have been to hear First Minister Nicola Sturgeon explain what she would do with these new powers), the package of reforms is extensive. Bluntly, it goes a long way further than anyone on the losing side of the independence referendum had any right to expect.

Given that all parties involved are fully behind the constitutional changes agreed by participants in the commission, we can expect legislation at Westminster next year that will formally establish a new settlement for Scotland.

But the implications will stretch far beyond our Border. It will not be possible to shift power from Westminster to Holyrood without the effects being felt across these islands.

The most significant proposal to come out of the Smith Commission is that Holyrood should be given the power to set tax rates and bands on earned income and then keep all income tax raised in Scotland. Furthermore, benefits including Disability Living Allowance and the winter fuel payment for pensioners will become the responsibility of the Scottish Government.

Add to that mix the right to vote in Holyrood elections for 16- and 17-year-olds and we can see how the balance of power will shift. This may chime with what Scots want (and poll after poll tells us that although the country rejected independence, there is a healthy appetite for a stronger Holyrood) but the rest of the UK hasn’t had a look-in. Some in Labour feel that by giving Holyrood responsibility for income tax, the redistributive nature of that tax is undermined and with it, the UK.

When Prime Minister David Cameron announced, hours after the No campaign’s referendum victory, that Lord Smith’s commission was to be established, he also said it was time to look at new Westminster rules to allow only English MPs to vote on legislation affecting England. The transfer of new powers to Scotland will do no harm to Cameron’s argument.

But there is strong opposition to this move from some in Labour, who predict it would create a two-tier parliament, with some MPs denied the rights afforded others. It is arguable that this could happen.

The Barnett formula – which sees that changes in public spending in Scotland are linked, proportionately, to those in England – is to remain under the Smith proposals. We may well see English votes for English laws – or, pleasingly, Evel – applied in cases where a decision has a direct implication for spending in Scotland. That would result in a democratic imbalance, surely?

More significant for Labour is what such an arrangement might mean should it return to power. Labour – even under intense pressure from the SNP – is expected to return a decent number of MPs in Scotand next year. With polls running tight, and a surging Ukip eating into support for all parties in England, Scottish Labour MPs could be absolutely crucial to Ed Miliband achieving a majority.

But that majority would mean nothing if a significant proportion of his members were barred from participation in a number of parliamentary decisions. Even if you think it pointless to hypothesise about a future Miliband government, this problem would dog Labour in perpetuity.

In public, the SNP has complained at tedious length about the outcome of Smith. Privately, the party leadership knows that it has played its part in advancing the cause of nationalism by some distance. Less than three months ago, the nationalists failed to win independence but the compensation will be handsome. With Holyrood’s new powers, Nicola Sturgeon will be able to shape a more distinctive story about Scotland taking responsibility.

In public, the unionist parties have declared the Smith Commission’s proposals to be a vow honoured. Privately, some worry about the potential consequences of what they are signed up to. They worry that they’ve given ground to the SNP, unnecessarily.

The refurbishment of the devolution settlement will change Scotland but the project risks weakening the foundations of the UK.

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