Why Labour’s new plan would mean reversal of devolution – Murdo Fraser MSP

The Labour party may not actually want to reverse devolution but that would be the effect of their latest constitutional plans, argues Murdo Fraser MSP.

Labour leader Keir Starmer has talked of a ‘renewed partnership between all nations of the UK’ (Picture: John Devlin)

Anyone hoping over the last few years for some clarity and consistency from the Scottish Labour Party on their position on the constitution will have been disappointed. Trapped between the Scylla of the pro-independence SNP and the Charybdis of the pro-Union Scottish Conservatives, the Labour ship has struggled to make progress, failing to find a middle way that might attract back former supporters lost to both larger parties.

Under the former UK leader Jeremy Corbyn, Labour had more positions on a second independence referendum than could be found in the pages of the Karma Sutra. Famously, at one point in the general election campaign last autumn, there were three different stances in the course of one 24-hour period. Against this backdrop, it is little wonder that Labour have lacked credibility on the constitutional issue, and that they lost all but one of their Scottish seats in December.

In an effort to make some progress on the issue, Scottish Labour adopted yet another policy position at the weekend, comprising (in their own words) “a firm policy statement against independence and a second referendum but for radical reform”. To the annoyance of some of their own MSPs, Labour are now stating that they will oppose a second independence referendum in the Holyrood elections due next year. Given their tragic history in these matters, it remains to be seen how long this new line will hold.

In line with comments made by Sir Keir Starmer during his recent leadership campaign, the new Scottish Labour stance talks about “a renewed partnership between all nations of the UK based on a progressive federal structure”. However, what this means in practice remains a mystery.

Starmer is by no means the first senior Labour figure to talk about a federal approach to the UK. Many other Labour voices, from Gordon Brown to Kezia Dugdale, have promoted the attractions of a federalist approach. As the elusive “third way” between unionism and nationalism, it certainly has political attractions. The problem is that federalism simply does not work in the context of the UK as it currently exists.

The essential challenge facing all proponents of UK federalism is that a four-nation federal structure, with England as one of the component units, would be so hugely imbalanced as to be unworkable in practice. With 85 per cent of the overall population, and an overwhelming percentage of the wealth, the interests of England would always dominate. Conceivably, the First Minister of England (if such a position were to be created) would be a more significant and powerful political figure than the Prime Minister of the United Kingdom, which would be an absurd situation.

The alternative approach would be to federalise within England, breaking that country into self-governing regions. And yet, as we have seen over the past two decades, there is very little appetite within England for legislative assemblies to be created. Whilst devolution of power to city regions has progressed, and will continue to do so, the notion that Yorkshire might have different laws to Lancashire would strike the average Englishman as an absurdity. It is simply not going to happen within any conceivable timescale.

How Labour intend to address this essential difficulty is still entirely unclear, despite all the years they have had to think about the practicalities of federalism. That said, there are proposals put forward which would have benefits, among them the abolition of the House of Lords and its replacement with a Senate of the nations and regions, and the establishment of a UK Council of Ministers. In a paper I wrote last year for the think-tank Bright Blue Scotland, I put forward just such ideas as a means of reducing imbalances in the current UK constitutional arrangements, and support for these reforms is reflected across the political spectrum. But it all falls far short of the federalism that Labour now claim to support.

It is not just in relation to federalism that Labour’s new position is riven with confusion. On the Fiscal Framework that governs the financial relationship between Scotland and the rest of the UK, the new Labour policy paper states this: “There must also be a renegotiation of the Fiscal Framework so that Scotland is not financially penalised for tackling poverty and inequality through social security reforms, or financially penalised for relative economic underperformance”. This is a breath-taking statement, and an astonishing repudiation of the Labour party stance taken at the time of both the Calman and Smith Commissions, which advanced financial devolution.

The whole principle that lay behind the fiscal devolution promoted by both Calman and Smith (and now made law through the two subsequent Scotland Acts) was that each part of the United Kingdom would bear the financial cost of political choices made by governments elected there. So, for example, an expansion of social security within Scotland alone would have to be funded by Scottish taxpayers, and not those elsewhere in the UK. Similarly, if thanks to policies implemented by the Scottish Government, the Scottish economy performed relatively better than the rest of the UK, then the benefit of any tax uplift would come to the Finance Minister here, and not be shared with other parts of the UK.

Labour seem now to be rejecting this entire model and are demanding, effectively, that English taxpayers should pay for the policy choices made by Scottish politicians. This isn’t federalism, or even devolution. Indeed, what is being proposed is actually a reversal of devolution. It would mean that there is no point to fiscal devolution at all, and that the tax-varying powers currently held by Holyrood are without purpose. Far from seeking to enhance devolution, Labour’s new position seems to be that it should be rolled back.

I simply cannot imagine that this was the objective that Labour had in mind when they set out to update their policy position. And yet, that would be the outcome of the measures that they are currently proposing.

Anyone hoping that this latest statement from Scottish Labour would clear up the confusion around their stance on the constitution will have been left bitterly disappointed. All we see is yet more muddled thinking and lack of clarity.

Former Labour-voting unionists who have switched to the Scottish Conservatives will want to keep their votes with a party that respects the devolution settlement, and at the same time is firm in its support of the Union and in its rejection of another Independence referendum.

Murdo Fraser is a Scottish Conservative MSP for Mid Scotland and Fife

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