The Scottish Referendum in September 2014 had significant and far-reaching consequences for the political settlement of the United Kingdom. The pressure for more fiscal devolution and other economic powers in the devolved nations has increased demands for greater economic decentralisation in the regions and sub-regions of England. This edited collection constructs an analytical narrative that draws on the evidence of the Scottish experience and expert testimony from the Smith Commission and other policy advisors. Drawing on ideas from fiscal federalism and agglomeration economics, the contributors examine the reorganisation and restructuring of economic territories within the UK.
What is apparent in the UK experience of asymmetrical devolution is that many of the complex issues surrounding decentralised economic governance are not going to be addressed through simple expedients. The pertinent question is what should be the appropriate institutional logics and formal policy bailiwicks underpinning a new constitutional settlement? In other words, what new governmental powers and accompanying forms of governance are needed to achieve a more economically and spatially balanced economy?
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David Bailey is Professor of Industry at Aston Business School, UK.
Leslie Budd is Reader in Social Enterprise at the Open University, UK.
Introduction: Devolution and the UK Economy David Bailey and Leslie Budd, 1,
PART I: LESSONS FROM A POST-REFERENDUM SCOTLAND, 15,
1 Where Next for Scotland and the United Kingdom? Jim Gallagher, 17,
2 The Aftermath of the Scottish Referendum: A New Fiscal Settlement for the United Kingdom? David Bell, 37,
3 Local Tax Reform in Scotland: Fiscal Decentralization or Political Solution? Kenneth Gibb and Linda Christie, 57,
4 Questions of Social Justice and Social Welfare in Post-Independence Referendum Scotland Gerry Mooney, 79,
PART II: LAGGING OR LEADING IN THE REST OF THE UNITED KINGDOM, 93,
5 Economic Challenges and Opportunities of Devolved Corporate Taxation in Northern Ireland Leslie Budd, 95,
6 Commanding Economic Heights?: The Effects of Constitutional Uncertainty on Wales' Fiscal Future Rebecca Rumbul, 115,
7 Securing Economic and Social Success: The Local Double Dividend Neil McInroy and Matthew Jackson, 131,
8 Beyond 'Localism'? Place-Based Industrial and Regional Policy and the 'Missing Space' in England David Bailey, Paul Hildreth, and Lisa De Propris, 159,
9 Prospects for Devolution to England's Small and Medium Cities Zach Wilcox, 189,
10 City Dealing in Wales and Scotland: Examining the Institutional Contexts and Asymmetric Arrangements for Policy Making David Waite, 13,
Index, 235,
Notes on Contributors, 239,
Where Next for Scotland and the United Kingdom?
Jim Gallagher
Within the last year, the Scottish people have said two apparently contradictory things. They want to stay in the United Kingdom, and they want to be represented by the SNP. By a majority of over 10%, Scotland chose to remain British, but then, with 50% of the general election vote, chose Scottish nationalists to represent it. The partisan politics of the general election were extraordinary. The Labour vote collapsed, and the SNP showed remarkable skill in building a coalition of voters. As a result, as well as exercising dominant control over both Parliament and government in Holyrood, they are the overwhelming Scottish voice in Westminster. People committed to what Scotland has rejected, it seems, represent Scotland.
CONSTITUTIONAL CHALLENGES
This combination of results presents acute challenges for Scotland's relationship with the United Kingdom. Scotland's representatives will be seeking things that the United Kingdom will, and should, reject. Some of these may be no more than the theatre of politics - demand the unattainable, and trumpet the rejection. But amidst the rhetoric sits a real question: Is there a constitutional relationship between Scotland and the United Kingdom that satisfies Scottish aspirations and is acceptable to the United Kingdom as a whole?
Exactly what those aspirations are is not easy to see, but even if well-defined, they are not a matter for Scotland alone. In recent decades, Scottish demands for additional autonomy have been seen as largely a Scottish question pursued by Scots. The rest of the United Kingdom, or more precisely England, has by and large been tolerantly indifferent, and devolution has been shoehorned into the existing UK constitutional framework. This has changed. Some of the reasons for the change are purely political. The referendum campaign raised the real possibility of secession, and gained English attention. More recently, the idea that Scottish Nationalist MPs might impose a government on England in a narrow general election was made into a major election issue.
The proposals for more powers now on the table or demanded by nationalists press at or over the boundary of what can be described as devolution, and raise in acute form the two long-standing rough edges of the devolution settlement: the Barnett formula, and the West Lothian question. As a result, the discussion on Scotland's constitutional position can no longer be construed merely as what concessions Scottish politicians can wrest from reluctant UK ministers: this will be a negotiation with a mobilized English opinion, which requires a serious look at the UK territorial constitution as a whole.
A CHOICE MADE: POLITICAL, ECONOMIC AND SOCIAL UNION
The place to begin is following through the logic of the first choice made by Scots: the referendum decision to remain in the United Kingdom.
The referendum was at least as much a test of the union as it was of the idea of independence. Independence was a concept presented with relentless positivity, but it was a blank canvas onto which virtually any hope or aspiration could be projected. An independent Scotland could be richer, or fairer, or greener: Who was to say that was impossible? Union with the rest of the United Kingdom, by contrast, was a concrete reality. Perhaps its virtues could be taken for granted, but its faults were easy to see and to criticize. In the end, the voters seem to have concluded that the risks of change were too great. The risks were very real, and the campaign focused on them, but it is more fruitful to focus on the positive arguments that underlay those calculations of risk, and so get a sense the nature of the union that was defended, and accepted, by the electorate.
The campaign itself was like a two-year-long general election. Campaigning is ephemeral, more soundbite than seminar, with arguments relentlessly simplified and exaggerated by the media. This was, however, a campaign with a government on each side. The case for a separate Scotland is recorded mainly in the Scottish government's White Paper, Scotland's Future (Scottish Government, 2104), a bulky document, light on analysis but strong on reassurance; Scots were told they could keep the things they like about the United Kingdom, and ditch those they did not - and even gain a place in the Eurovision song contest. The case for the Union is surprisingly well documented, and much of the argument, heavy with underlying analysis and data, can be found in the government's Scotland Analysis programme (https://www.gov.uk/search?q=Scotland+Analysis accessed 01/06/15).
The positive argument of the Better Together campaign was set out at length in June 2013 by Alistair Darling in a poorly reported lecture at Glasgow University, subsequently published as a pamphlet (Better Together, 2013). It is a case for a political union, linked to an economic union and social union. The linkages mattered much in the debate, because those arguing for independence claimed it was possible to keep the economic and social sides of the union while dissolving the political union.
The United Kingdom is a 'union state' (Mackintosh, 1968; Rokkan and Unwin, 1982). That union is a political institution, based in Scotland's case on the union of the parliaments negotiated in 1707. Internally, the union is differentiated in ways that are analogous to the distribution of powers in a federal state, but it presents a single external face to the world, under single foreign and defence policy stance. Interestingly, this is something supported by more Scots than voted 'No' in the referendum (Curtice, 2013).
Formally speaking, the choice in front of the voters was whether to end the political union of the United Kingdom. However, the real debate was not about defence and foreign policy, despite some mention of Trident. Instead, it was about the other two connected aspects of...
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