Michael Keating: Power without a break

There has been a great deal of talk lately about devolution-max. The SNP government has offered to put it as an option in the forthcoming referendum, while various civil society bodies have been building up a momentum in its favour. But what exactly is devolution-max, apart from a third way between the SNP’s option of independence and the Unionist parties’ counter-proposals in the current Scotland Bill?

The philosophical basis lies in the idea of “post-sovereignty” developed by legal and political thinkers in recent years. This is a recognition that, in the modern world marked by international interdependence, especially within the European Union, national sovereignty is no longer absolute but is rather shared and diffused. This is true in a practical sense, since there are many formally sovereign states with less real control over their destiny than strong non-sovereign regions, such as the powerful German Länder. It is also true in a deeper sense as international and European law have become part of the domestic constitution of states. This idea of shared sovereignty is alien to Westminster ideas of absolute parliamentary supremacy but is a better fit with Scottish traditions of negotiated union. Indeed, in Scotland the question of sovereignty has never definitively been resolved. Shared sovereignty also finds an echo in ideas of historic rights found in other stateless nations.

Complementing this is an increasing recognition among international lawyers and political theorists that national self-determination does not necessarily mean creating one’s own independent state. Self-determination in the modern world means, rather, the ability to negotiate one’s position in an interdependent state and international order, which may or may not involve fully-fledged statehood. So a federation or confederation of self-determining nations is a perfectly intelligible idea.

This is not something that comes easily to Unionists. Margaret Thatcher famously declared that the Scots had a right to independence but not to devolution, while the Unionist parties presently insist that the forthcoming referendum can only pose the independence question in its conventional form.

The most radical option would retain at Westminster only foreign affairs and defence, the currency and some regulatory agencies. This comes close to the “independence-lite” scenario favoured by some nationalists. A less radical version would build on the present system but with a major transfer of powers. Attention here has largely focused on taxation. One option would see Scotland take control of all taxes, paying a share to London for common services.

This follows the system in the Basque Country, where taxes (but not social security contributions) are levied locally with a quota passed up to Madrid. A more modest version of devo-max for Scotland proposes the devolution of most taxes with the exception of VAT, which cannot under EU rules be varied within states.

Devolution-max is an ugly term but in content it resembles the more euphonious home rule of the late 19th and early 20th centuries. The big difference is the modern welfare state.

Devolution-max proposals typically provide for the complete or partial devolution of social security, the one big item of domestic spending that is not already devolved.

Devolution of taxation and social security represent a major constitutional change, radically altering the scope of Scottish devolved government. It would not give the Scottish Parliament levers over macro-economic policy, since the currency and therefore monetary policy would still be reserved. This in turn would imply limits on borrowing and some alignment of economic cycles; but that would also be the case with independence as proposed by the SNP. Devo-max would, on the other hand, allow Scotland to take the big decisions about overall levels of public spending. If Scotland were to follow its social democratic inclinations, it could go for high levels of public services, with high taxes to match. Alternatively it could take the neo-liberal line and cut both taxes and services in a bid to attract mobile investment.

It is not, unfortunately, possible to do both at the same time; the idea that tax cuts pay for themselves by boosting growth is sheer wishful thinking. Since Scottish political culture and society are profoundly social democratic, the neo-liberal line looks an unlikely option. The alternative, to imitate the Nordic countries’ successful models, requires that public expenditure be seen as social investment, contributing both to growth and to social cohesion and equality.

With devolution of most taxes and social benefits, the basic social compromises would be made at the Scottish and not the UK level. Business, trade unions and social interests would be drawn more into the policy process and electoral turnout could be expected to increase. Holyrood, rather than Westminster, could become the main focus of political attention. Scotland, rather than the UK, would be the main framework for social citizenship and solidarity.

Devolution-max, in whatever form, would entail significant changes in the relationship of Scotland to the rest of the United Kingdom. There would be a great deal of bilateralism, as matters of common interest were negotiated between Edinburgh and London, and it is not clear how this would affect the interests of the other devolved territories.

The West Lothian Question would return in force as it is highly unlikely that non-Scottish MPs would be content for Scottish MPs to have a say in setting their tax rates while they had no control over taxes in Scotland. Almost certainly there would be a reduction in Scottish representation in Westminster. Scottish MPs would be less likely to serve in the major UK offices, except those concerned with defence and foreign affairs, and generally the gain in autonomy at home would be matched by a loss of influence at the centre. This has always been the underlying issue in Scottish constitutional strategy. For most of the twentieth century, the big parties thought it was more important to have sway in London than autonomy at home; for some years now the pendulum has been swinging in the other direction.

Another tricky issue concerns representation in the European Union. As large parts of domestic policy are now under European jurisdiction, it has become important for Scotland to have a voice in European deliberations. So far this has been done through consultation and arrangements for Scottish ministers to participate in UK delegations to the Council of Ministers. While there have been complaints about the adequacy of these arrangements, policy differences have been, for the most part, manageable. Under devolution-max the need for agreement would be greatly extended. It is also possible that Scottish and English interests in Europe could diverge sharply as a Eurosceptic England seeks to disengage from Europe, while the Scottish Government and Parliament wish to stay in.

Opinion polls show a large proportion of the electorate in favour of some form of devolution-max, taking most of domestic policy to Scotland but leaving defence and foreign affairs to the UK level. Unionists have offered several reasons why it should not go into the referendum. Firstly, because there is no proposal; it is true that no party is offering it but proposals are being developed. Secondly, because devolution- max cannot be decided unilaterally; but then nor can independence, which is a hugely complicated matter. Thirdly, because self-determination is applicable only to separation; I have argued that this is an out-of-date view. Devolution max is a complicated business fraught with difficulties but by ruling it out on principle the Unionists seem to be behaving like old-fashioned nationalists in imposing a single view of political order on a complex world. Of course, it may be that English opinion is happier with Scottish independence than with devolution-max, since it would allow them to reconstitute their unitary state. This just reminds us that self-determination applies to them as well and that they are also free either to renegotiate or to leave the Union.

• Michael Keating is professor of politics at the University of Aberdeen. His book The Independence of Scotland is published by Oxford University Press.