Something ended & something begun

There is no more British party system. It is true that almost half the Scottish electorate voted for British parties and that Labour’s defeat in England was exaggerated by the electoral system, but if Labour is to make a comeback in Scotland it will be as a different, less British Party.

Its infrastructure in Scotland was always weak, with historically low membership levels compensated by a strong institutional presence, whether in unions, tenants’ associations and a web of influence and patronage in local government and civil society. These institutional supports have been weakening for decades, even while a rare generation of talented politicians was making a big mark at Westminster.

The referendum campaign and the disastrous decision to ally with the Conservatives (who had very little to contribute) shook Labour’s already precarious support in working class communities and large sections of the professional middle classes as well. The SNP has taken over both their roles: as the main centre-left force in Scotland committed to social welfare; and now as the brokerage party that goes to Westminster to shout for Scotland and bring back the goods.

Whatever the popular vote, the parliamentary arithmetic dictates that the SNP will speak for Scotland and the Conservatives for England. Welfare unionism, the idea that a British social democratic party can unite the people of this island on a programme of solidarity and sharing of resources, has lost its voice.

Similarly, the main actors in the next phase of constitutional debate will be the Conservatives and the SNP while Labour, which was at the centre of the referendum campaign, is consigned to the margins. The Smith Commission proposals had been widely criticized before the election as too little, too late. The process, a closed-doors inter-party deal, defied the spirit of the referendum campaign or the earlier experience of the Scottish Constitutional Convention.

The proposals were piecemeal, an untidy mix of tax powers that in practice would be difficult to use, and bits of welfare, such as a complex clause allowing Scotland to opt out of the ‘bedroom’ tax but not to forge a coherent policy on social and affordable housing across the public and private sectors.

The new circumstances make its implementation even more difficult. Cameron is committed to English Votes for English Laws (EVEL) and its equivalent in taxation (which we might call EVET). I have never had any problems with this in principle but, under Smith, it is difficult to see which matters would really be England – or England and Wales – only.

Income tax would not be, given Westminster control over the base, the definition of income, and unearned income. Nor would most of welfare. Smith promises to continue with the Barnett formula, although it is not at all clear what Barnett would mean under the new dispensation – key questions about indexation are unresolved. Under whatever form, Barnett would entail a Scottish interest across a range of English spending programmes, since it is they that generate the Barnett consequentials for Scotland. Moreover, Barnett is the target of English Conservatives, in whose cloudy understanding it is Barnett that finances free university tuition and medical prescriptions in Scotland.

A majority Conservative government gives free rein to the party’s ambition to radically reduce the size and scope of the state, going well beyond the Thatcher revolution. Within Labour, it was the Blairites that were first out of the stall on 8 May, calling for a tack to the right. It was the SNP that was unafraid to deploy anti-austerity rhetoric during the election, even if in practice its fiscal plans were not that different from those of Labour (which felt obliged to pretend to be more pro-austerity than it really was).

If this is the way our politics is heading, then Scotland may need as much autonomy as would allow it to arrive at its own social compromise and balance between taxation and spending. With more tax and welfare powers and control over labour market policy, it might have the tools to start building something like the ‘Nordic’ social and economic model to which there has been so much reference in recent years. This is not an easy path and entails difficult choices which were largely avoided in the SNP’s independence prospectus last year. But the experience of Quebec shows that a strong non-independent jurisdiction can avoid the massive inequalities which the application of pure market liberalism has entailed in the rest of the state.

There has been some talk since the election of a grand bargain between the Conservatives and the SNP. Scotland would gain full fiscal autonomy in return for EVEL. The Conservatives would govern England (and, at least for now, Wales), while Scotland could follow a high-spending road including universal public services on condition that it paid for itself. The Labour Party would be brushed aside. There seems little indication that the Conservatives are ready for such a deal.

There is a residual British unionism that holds them back and the Treasury would be aghast at surrendering fiscal powers. Conservatism is not inherently centralist but the modern Conservative Party is. Grand talk about ‘northern powerhouses’ and ‘devo-Manc’ (for Greater Manchester) masks a new strategy for central control and a bargain with Labour Party elites in the north of England rather than popular empowerment. There are voices in the party calling for federalism but they remain on the margins.

Along with all this, we are in for a debate about Europe. Cameron is obliged to deliver on his promise of re-negotiation and a referendum by the end of 2017 but must now decide on what it is that he wants to negotiate. A massive and expensive Review of Competences by the UK Government during the last Parliament produced nothing whatever of substance that might usefully be repatriated. Freedom of movement of workers, which Cameron tried on, is a pillar of the internal market and untouchable. The idea that eastern Europeans are flocking to the UK to take advantage of our meagre welfare benefits does not accord with the facts. So Cameron will have difficulty satisfying his Eurosceptic backbenchers, many of whom are the same people who complain about Scotland.

There is a familiar scenario in which England votes ‘no’ to Europe while Scotland votes ‘yes’. Before we get there, however, there is the forthcoming negotiation and what say Scotland will have in it. The Scottish Government needs to set out its priorities here and, above all, we need a debate in Scotland about what sort of Europe the nation wants and what Scotland could contribute to it.

Michael Keating is Professor of Politics at the University of Aberdeen