Federalism could make Scotland feel like an independent state without the costs of becoming one – Professor Marc Weller

The people of Scotland will be given their voice. A referendum on independence will come.

Is there a third way between Scottish independence and the current state of the Union? Federalism needs to be better defined if it is to provide one, says Professor Marc Weller (Picture: Andy Buchanan/AFP via Getty Images)

However, First Minister Nicola Sturgeon has confirmed that this will only happen once the health emergency is over.

She also committed to holding a “legal” referendum, likely requiring agreement with Westminster. Given the present position of the Prime Minister on the issue, achieving such agreement may also take some time.

A gap of at least a year, or more likely two years, between the May elections and a referendum would in any event be useful.

A referendum squeezes a complex and complicated issue into a simple, binary choice: Yes or no to independence. But what is missing thus far is the other side of the equation. What would the alternative to independence be?

A scramble for solutions

The Westminster parties have only just started the process of articulating their answer. The Cabinet Office under Michael Gove is said to have begun studying alternatives. Labour under Sir Keir Starmer has commissioned noted Scot and former Prime Minister Gordon Brown to head a broad consultation on future constitutional arrangements in the UK.

Already some years back, several members of parliament formed a Constitutional Reform Group. This sustained work has resulted in a Private Member’s Bill on an Act of Union that has had its first reading in the Lords. More recently, a Commons committee on constitutional issues was announced in the Queen’s speech, although its remit remains unexplained.

It is not clear how these diverse ventures will yield one single, firm proposal that could be offered as an alternative to independence. Then again, most efforts are led by outspoken unionists. Will they really put forward what best meets the needs of the people of Scotland, or will the exercise be seen as a scheme to blunt the momentum towards independence?

Michael Gove and Sir Keir Starmer have indicated that they are willing to consider significant constitutional change in order to tempt Scotland away from independence. In reality, they seem to be merely heading for further devolution. However, the previous promise of devo-max, made in the so-called ‘Pledge’ of the principal unionist political parties just days before the 2014 Scotland referendum, has devalued that approach.

Few people in Scotland have experienced significant change after 2014. A promise of further devolution is unlikely to inspire a great deal of public support as an alternative to independence. If the unionists want to make a credible case for ‘Remain’, they will have to learn to live with the federal option.

The ‘F-word’

The word ‘federal’ was until fairly recently taboo in the British constitutional dictionary. Federalism appeared to be inconsistent with the British constitutional tradition. It was seen as an alien, continental concept, best left to others. Moreover, federalism was taken to be a slippery stepping-stone, legitimising eventual independence.

This latter concern has little meaning where Scotland is concerned. It is already heading for possible independence. Offering a federal solution does not add further legitimacy to the claim to statehood. This entitlement already exists and is not disputed in principle by Westminster. Hence the referendum of 2014.

In truth, a federal alternative to independence is quite inconvenient for both unionists and for those seeking independence alike. A federal option goes against the sense of unionists that things should stay as they are, having proven their value and worth over centuries.

On the other side, a credible federal option would undermine the case for independence favoured by the SNP. If federalism is possible, could it offer the advantages that independence might bring, without running the risk of going it alone in a rather uncertain global environment?

And there are major uncertainties. Could an independent Scotland sustain the present standard of living of its population? The oil-price has sunk dramatically and oil and gas are running out as we are heading towards a zero-carbon world.

Would Scotland standing alone lose out on trade and security, especially if renewed EU membership is uncertain? What about the ability to draw on a far larger, national infrastructure to tackle emergencies like Covid-19?

Posing a reasoned alternative

These are difficult questions that need answering, calmly, objectively and without prejudice. And unionists and the SNP alike owe it to the people of Scotland to consider the federal option as the alternative, to weigh the respective benefits and risks.

Of course, some in Scotland will go for union or independence whatever the arguments, perhaps driven by sentiment. Sentiment is a legitimate source of political choice when confronted with hundreds of years of contested and, for many, painful history between the two nations.

The 2014 referendum has however shown that most in Scotland want to go beyond emotions and consider the actual facts. While the emotional appeal of independence may be high, the economic and political risks of independence may be too significant to be ignored or replaced by simple hope. At least the trade-off, if there is one, needs to be examined in the cool light of day and with a rational, open mind.

This means that a federal alternative has to be, first of all, defined and expressed.

A unique solution for Scotland and Britain

Form follows function in state design. So, the starting point for the people of Scotland is to achieve clarity about their aims, their needs and interests. What, specifically is independence meant to deliver, and what more is required to meet these needs?

Is it the need to give greater expression to Scottish culture and history? Is it the wish to escape perceived economic marginalisation by Westminster, or perhaps the ambition to construct a more equitable and enlightened society? Is it a more visible and independent role in shaping global affairs?

Once these needs have been articulated, a federal option can be designed to meet them. Clearly, finding a federal formula for Britain will be difficult. This is not a case of copying the Canadian, German or Swiss model. A bespoke solution has to be found that is likely to be as unusual as the circumstances that prevail at present in the UK.

Thus far, the UK has developed through devolution. Powers have been gradually handed down to three of the four constituent units of the union. These powers were granted by acts of the UK parliament, which remains the dominant layer of legislative authority. Controversially, devolution can even be reversed unilaterally by the centre, simply through changing the legislation on each of the devolved entities.

Federalism is different. A federal constitution will define the constituent entities and their powers and institutions, along with the remaining authority of the central bodies of the federation. The shape of the federal units is permanent and cannot be changed without their consent.

Federalism as an exercise of sovereignty for Scotland?

There are two types of federation, depending on the founding myth that underpins them. Some federations claim that they came about through the voluntary union of entities that are, in principle, sovereign. They have pooled their sovereignty in certain areas to achieve a limited set of common functions through federal organs. But they retain so-called residual authority over all areas of competence not expressly assigned to the centre in the constitutional compact.

In other cases, it is made clear that sovereignty is held collectively by all the nations and people of the overall state, taken as one. Power is then shared out from the centre to the individual federal units. The legal personality of the constituent units is derived from the centre.

In this case, unionists might point to the Treaty of Union of 1706. The Articles of Union promise that the two kingdoms of Scotland and England shall be united “forever after” into one kingdom. This would have extinguished the legal identity of Scotland as a source of sovereignty, making its re-emergence as a federal entity dependent on a grant of authority from London.

On the other hand, for many Scots a federal solution would presumably only be acceptable if it visibly revives their proud tradition and heritage, re-consecrating Scottish sovereignty. Joining the new federal system would be taken as an exercise of renewed sovereignty, and not as a denial of the claim to sovereignty. This logic may seem like dancing on the head of pin, but the symbolism involved in this kind of question can make or break the chances for a federal settlement.

Forms of federation

The next issue is the basic shape of the federal system. Ordinarily, a federation is characterised by a number of equal federal units, each having the same powers and institutional furniture. Clearly, that will not be the case in the UK – a composite of four nations, each of which has a different history and system of governance.

It is also possible to construct a federation as a so-called federacy. This would mean that the rest of the UK remains more or less untouched, while the status of Scotland is upgraded to that of a federal subject enjoying a unique legal identity of its own.

A third option is that of an asymmetrical federation. This would accept that Wales retains powers and institutions different to those held by, say, Northern Ireland. This is partly due to different histories, traditions and needs. It is also due to the Northern Ireland settlement, which involves the Republic of Ireland.

Moreover, the so-called West Lothian question would finally be addressed. England, too, would become a federal subject, enjoying its own distinct competences and institutions, perhaps giving more expression to its own regions or major cities.

Within such an asymmetric set-up, Scotland could express its identity to a very considerably enhanced extent. It would feel like its own state, without incurring the penalties and costs of setting one up.

More power?

The second major issue arising in federations is competences. Inevitably, there will be exclusive competences exercised by the centre. This may concern defence and national security, border and customs, transport and communications, a national framework for economic development, protection of genuine democracy and human rights, etc.

Then there may be competences shared between the centre and federal units. For instance, the centre may establish a joint framework for educational attainment in schools, while the federal entities will adopt legislation to implement this in their own way.

Finally, in accordance with the key principle of subsidiarity, the competences that can be best exercised within the federal units will be exclusively assigned to them.

The present devolved settlements for each region already contain detailed schedules assigning competences to the different levels of government. It would be useful for Scotland, or the SNP, to articulate clearly what additional powers it seeks to gain through independence. It would then be possible to see whether or not a federal model can accommodate such a demand.

Changing institutions and finance

Third, there is the issue of institutions. This poses few problems for the UK as three of the four regions have their own, highly developed institutional architecture. England would, of course, need to decide whether it wishes to establish its own, dedicated layer of legislature, executive and judiciary.

Of course, a federation is not only about powers of the federal units. A number of central functions and federal institutions will remain.

Where powers are retained by, or transferred to, the centre, the question of power-sharing arises. The weighting of seats in the national parliament might need consideration, to ensure that each region can have a significant voice of its own in relation to matters of national policy.

The more significant change would occur in relation to the House of Lords. In addition to its function as a federal revising chamber, it would assume the role of safe-guarding the rights and interests of the federal units in national decision-making. Its composition would therefore need to reflect the identities of the four federated nations.

Happily, the move to the Supreme Court as an institution separate from the House of Lords makes it easier to ensure that legal disputes between the constitutive units, or between them and the central authorities, can be addressed.

There might also be provision for executive power-sharing, ensuring that all nations are fully and meaningfully represented in government and the national civil service, and can shape common decisions on defence, external relations and other central competences.

Finally, the important question of funding arises. At present, Scotland receives most of its budget in the form of a block grant from Westminster. In a federal system, funding follows function. Central funding would be increased according to the additional competences administered by the federal units. More likely, the federal units would be given their own income by shifting the powers of taxation and raising duties, perhaps supplemented by federal funding.

An element of federal funding would not only be needed to cover central services of the federation. It would also be required to meet unexpected needs of a federal unit, say in case of a natural disaster, and to balance out inequities between the units due to geography or economic development. This balancing function, or safety net, would be lost in case of independence – likely a significant loss of Scotland.

Overall, it would be possible to construct a federal solution that takes account of the particular history of Britain while significantly enhancing Scotland’s sense of identity and powers as a state within a federal union. However, such a vision needs to be developed and expressed in some detail, before it can be judged against the needs articulated by the people of Scotland, and against the alternative of independence.

Marc Weller is professor of international law and international constitutional studies at the University of Cambridge and a barrister at Doughty Street Chambers

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