Andrew Dunlop on the Future of the Union

Feb 10, 2021

 

Part I: The Kingdom to come

For many watching, the inauguration of Joe Biden was a moving experience.  The COVID crisis has been an unsettling reminder of the fragility of humanity.  And with the shocking, lawless scenes of rioters storming the Capitol fresh in the memory, when democracy itself  seemed in peril, the 46th US President’s theme of unity offered the uplifting prospect of better times just around the corner.  “With unity we can do great things” he promised. 

There is nothing new of course in a newly elected President pledging a renewal of the American Dream – in one form or another they all invariably do.  However the pledge of renewal has never felt more necessary than during these torrid and testing times.  And when he spoke about “we the people who seek a more perfect union”, it was difficult not to reflect on the prospects for our own older Union – which is what Policy Exchanges new project on the future of the Union, which launches today, will explore.  

It’s hard to believe in these early weeks of 2021, when the country is grappling with an unprecedented national health and economic crisis, that anyone could contemplate willingly throwing into the mix a constitutional crisis.  Issuing a clarion call to break apart, when it could not be clearer we need to pull together.  Yet that appears to be the course on which the SNP Government in Edinburgh is set with its 11-point plan for independence. 

For the UK Government to reject a demand to hold any time soon another referendum on Scottish independence is not, as Nicola Sturgeon would have it, “a denial of democracy”; it’s plain common-sense and the responsible thing to do. 

Dealing with the COVID-19 pandemic and its economic and social consequences has tested to the limit resources north and south of the border, and will continue to do so for the foreseeable future.  The idea that government resources should be diverted from the task of recovery to conduct what would inevitably be another costly and divisive referendum will strike many as a profoundly wrong-headed ordering of priorities, with potentially damaging consequences not just for Scotland but throughout the UK.

And to suggest that for Scotland independence is the COVID recovery plan is, to many, incredible.  Since 2014 the economic and other public policy fundamentals have become even more difficult for those making the case for independence.  How can independence be the answer to COVID when credible responses to the fundamental questions raised during the last independence referendum – on currency, funding for public services, borders and trade within the UK have never been provided?

It’s clear though that simply explaining to people in Scotland why now is not the time for another independence referendum isn’t a sufficient or sustainable long-term strategy for supporters of the Union.

With Brexit complete, we’ve taken back control.  Now people expect to hear from the UK Government how this control will be exercised and to what purpose.  And COVID has drawn peoples’ attention – many for the first time – to the realities of UK government decision-making in a world with devolved governments and legislatures.  There’s also a palpable sense that after Brexit and COVID life cannot simply return to where we were before.  So while the inauguration of a new president promises renewal in the US, this also feels like a watershed moment requiring national renewal for the UK as well.

When blamed for everything that goes wrong, political leaders face the temptation of trying to assert even more central control.  This would be the wrong lesson to draw from COVID.  It would also be a strange response to Brexit – a democratic revolt against what was perceived to be a suffocating, centralising power.

To make sense of Brexit, Recovery UK must demonstrate that it can be a fleet of foot medium-ranking power, able to punch above its weight.  Big enough to matter but not weighed down by sclerotic big bloc decision-making, in which the multiple competing interests of 27 states must be squared off before it’s possible to move forward.  A country offering its constituent parts the best of both worlds.  Empowered local decision-making, with the ability to act collectively when size and heft matters.

Here are four essential elements for a strong and successful Union in the 21st Century.

To succeed requires first and foremost the right governing attitude and tone.  The UK is the world’s most successful joint venture in which England, Scotland, Wales and Northern Ireland have always played their full part.  The UK must continue to look and feel like a shared endeavour as we go forward.  A country where the man in Whitehall accepts he doesn’t always know best and devolution isn’t regarded as a disaster.  A country in which minority voices are heard and taken account of.  A country whose very diversity fuels its dynamism.

The second ingredient of success is to recognise that devolution is an unfinished, not a failed, project.  Over two decades and more significant powers have been devolved from London to Cardiff, Edinburgh and Belfast.  The Scottish Parliament, for example, is one of the most powerful devolved legislatures anywhere in the world.  Yet while central and devolved governments have their distinct areas of decision-making responsibility, COVID has exposed the extent to which they depend on each other to be effective. 

The need to consult each other and to find agreement has never been greater.  Yet there has been little equivalent development of the resilient architecture to manage inter-governmental relations within the UK to match a 20-year dispersal of power – the necessary machinery to promote co-operation, manage disputes and facilitate joint decision-making.  A reform of this architecture – with a re-vamped and enhanced Intergovernmental Council at its heart – is urgently required as it is part of the essential glue that binds together the United Kingdom.

The third essential element is to take forward devolution in England.  The UK continues to be beset by significant regional economic inequalities.  The Government is therefore right to pursue  its levelling up agenda.  The evidence is that voters don’t want even more politicians or new and expensive tiers of government.  What they do want is local leaders with the incentives to work together and the tools to drive forward their regional economies, creating alternative magnets for economic activity to match the power of London and the South East.

And devolution in England should matter to people in Scotland, Wales and Northern Ireland as well.  Growing regional economies in England will provide growing markets for Scottish, Welsh and Northern Ireland businesses, and strengthening the collective voice of the more peripheral areas of the UK.  

This may not have the tidiness of a federal solution.  But soundbite solutions like federalism are not the answer.  There is no example of a successful federal state anywhere in the world where one part represents over 80 per cent of the population of the whole.  Establishing a separate English executive or parliament far from securing the Union, risks irrevocably de-stabilising it.

The final priority is to put power in the hands of local communities within Scotland, Wales and Northern Ireland.  Local empowerment shouldn’t stop on the doorstep of Cardiff Bay, Stormont or Bute House – for the citizens of Aberdeen, Inverness or Dumfries rule from Edinburgh often feels as remote as London.  

There is an opportunity to build upon the network of city and growth deals in the devolved nations.  They are each a tangible example of how the UK Government can join forces with devolved governments to help transform the economic prospects of the people they both serve. 

That’s why I’ve recommended to the Prime Minister a new co-operation fund to promote even greater joint working between the UK and devolved governments, which responds to locally identified priorities and acts on areas of common concern from preventing drug abuse to tackling our productivity challenge and climate change.   After all, while we should value as a country what we are able – as a result of devolution – to do differently, we should also take care not to squeeze out what we can and should be doing together.         

So at this moment of national crisis surely we should be making certain that the UK is working as well as it possibly can, delivering for families in every corner of the land and helping them to recover from what has been a collective ordeal.   

SNP politicians gleefully say they have no interest in strengthening the Union.  Where does that leave the people they were elected to serve?  Don’t they want to see devolution work as well as it possibly can?  And don’t SNP politicians have a duty to them to see that it does?  Working together at a time of crisis should be a no-brainer – that’s a natural human instinct, even if it’s against the deeply ingrained political instincts of SNP leaders. 

For all the privations and heartache which Covid has visited upon every family in the UK, it has also reminded us of the best of our shared national character; the solidarity, generosity, resilience and resourcefulness of the British people – in Scotland, England, Wales and Northern Ireland.  The values that course through the arteries of the United Kingdom are the values that have for centuries attracted visitors to our shores.  And they encourage them still to want to make this beautiful, diverse, argumentative, funny, improvising, idiosyncratic island their home. 

A practical, open, generous, forward-thinking and inclusive Unionism will always triumph over narrow, ideological, exclusive and divisive nationalism.  In the words of the 46th President of the United States: “With unity we can do great things”.

 

Part II: A Union of Co-Operation

The recent Matthew Parris article in The Times is likely to be symptomatic of a strong strain of thought within the Conservative Party.  For that reason it needs answering.

Complacency 

Stripped down the Parris argument is: sit tight, do nothing and the storm will pass or the gale will blow itself out.  The post-war history of the Conservative Party is riddled with such thinking.  It has been a contributory factor – along with mistakes made by the Blair Government (‘devolve and forget’) – to where we are today. 

In 1979 Alec Douglas-Home urged Scots to vote no in the devolution referendum on the promise that an incoming Conservative Government would bring forward a better bill.  It never did.  Devolution did not feature on the agenda of the Thatcher Government – some cosmetic tinkering with the Scottish Grand Committee was the sum of it.  In 1992  John Major – to the surprise of many – put with some success the Union at the heart of his General Election campaign.  But in the subsequent five years he failed to address it;  the Government did publish a White Paper in 1993 entitled “Scotland in the Union – a partnership for good”.  It’s a thin and feeble document.  And the Conservative Party was slow to embrace devolution following the 1998 referendum. 

For all the criticisms levelled at David Cameron, the Governments he led were the first involving Conservatives to take full ownership and to develop devolution.  It is often forgotten that the Strathclyde Report – pre-dating “The Vow” – was commissioned to provide the Conservative Party with something distinctive on which to campaign at the Holyrood election following the 2014 referendum.  And, but for Brexit, Cameron might well have presided over a period that ushered in, following the full implementation of the Smith Commission Report and accompanying fiscal framework, a quieter and more stable period for the Union.

The Appeasement Prism   

The point missed by most commentators is that for many of us involved in the development of UK Government policy at this time extending the powers of the Scottish Parliament, the Welsh Assembly and (to a more limited extent) the Northern Ireland Assembly was not the pursuit of a policy of appeasement of the nationalists. It was motivated by a belief that the original devolution settlements had been lop-sided – huge spending powers, with little or no responsibility and accountability for raising the funds to pay for them.  This lop-sidedness has had a distortive effect on the electoral politics of Scotland.  It’s no coincidence that the 2016 Holyrood election was the first in more recent times not to be dominated by constitutional politics, but rather the more traditional politics of tax and spending choices.

This context is important when considering the future of the Union now.  Commentators are apt to fall into the trap of viewing any action to strengthen the Union through the prism of seeing off another referendum on Scottish independence.  This framing is not helpful and, if allowed to persist, will lead to any proposals for reform being treated with considerable cynicism, not least in Scotland.

A Match-fit UK

Reform of the Union must be framed as making the United Kingdom fully match-fit for a post-Brexit and post-COVID world.   

The Parris article demonstrates that there is a misconception about what progressive Unionists are – or should be – talking about.  This is not about “more powers’ or a version of Home Rule, which halts one station stop before the line reaches independence.  Neither is federalism a suitable response.  The United Kingdom is a unique country requiring unique constitutional solutions.  Given the unusual make-up of our multi-national state there are no off-the-shelf solutions such as federalism to adopt.  We need something more bespoke, which builds on, and does not tear apart what has gone before.

Clear Branding 

For the sake of clarity, and to distinguish the proposals of progressive Unionists from other solutions, there needs to be a simple brand or phrase, which distils the essence of a new approach – a Co-operative Union or a Union of Co-operation (there may be better phrases).  An influential Scottish thinker about the Union, the late Professor John P Mackintosh used to talk about the UK as being a Union State to distinguish a UK model of devolution from more traditional concepts of federalism. 

A Union of Co-operation is intended to encompass not just co-operation between the UK Government and devolved nations, but also between central and local government and within local government.

Untidy Bottom-up vs Tidy Top-down

Implicit in this approach is that administrative tidiness or symmetry is not a prime driver of change.  It needs to be made clear that devolution within England is a bottom up exercise, which may not have the tidiness of a federal model.   This changes the role of central government from being the designer of an artificial, federal-like network of regional governments and assemblies, to one of stimulator and facilitator, using financial and other incentives to encourage local co-operation and more natural coalitions of interest (including engaging with the business community as a pre-requisite).  In this model the UK Government would remain a key partner – no ‘devolve and forget’ here.  This might also fit with a more dispersed model for the location of civil service policy officials (the COVID effect may help with virtual and remote working more normalised).

Competition/Challenge = Raising Standards

Much of the above deals with the Parris critique.  However, there is an aspect of his critique that cannot and shouldn’t be avoided, as it is an inevitable and desirable consequence of reform and extending devolution in England.  It does nevertheless raise a challenge that needs to be confronted at the outset.  Parris highlights that if the regions of England are strengthened, this increases the risk of regional leaders “whining about insufficient subsidy from the London region”.   

First, Parris misses the point.  An explicit objective of reform is to strengthen the collective voice of the more peripheral regions of the UK when it comes to establishing national priorities and the allocation of resources.  This was a key point always made by the late Nigel Smith – a Leaver on Brexit but also a deep thinker about the Union, who led the Yes Campaign in the 1997 referendum on Scottish devolution.  The Dunlop Report touches on this by referencing the need for an English Regions Forum to complement the IGR machinery for devolved nations.  Gordon Brown also has his own version of this same thinking. 

Without question this would make more difficult the life of UK Government ministers and civil servants – but in a way isn’t that the point and a key insight about why the UK has failed to tackle regional economic inequalities, by being perceived to be too London-centric?

This also highlights the importance of distinguishing constitutional from political failures.  The ability to successfully negotiate with and mediate between the demands of sub-national government actors should be a core capability, which the UK Government needs to possess.  This is an area that would certainly improve fast – and need to – if devolution is extended in England.  Might more challenge and a more competitive decision-making environment have the effect of raising overall the standards of governance in the UK? 

Rates of Return/Resource Allocation

Second, it does raise a second profound economic point that is implicit in the Parris critique.   Economic theory – and Treasury orthodoxy – suggests that scarce resources should flow to where returns are highest.  London and the south east are the key drivers of the UK’s economic success.  The UK Government needs to keep feeding this success to generate the resources to fund public services and support less prosperous regions.  So what then are the consequences of the levelling up agenda?  Does the UK Government and the Treasury accept lower returns from public investment in the short term to increase the long-term returns from reducing regional economic inequalities?   

The Government is reviewing or has reviewed the Treasury Green Book rules for assessing public sector investment projects.  Again The Dunlop Report considered this issue and proposed, in addition to a co-operation fund to incentivise joint working with devolved administrations, a second fund to incentivise Whitehall departments to identify and bring forward Union-enhancing projects in reserved areas.  This was in part to address a concern expressed to me by all the territorial secretaries of state that infrastructure projects with strong business cases,  positive cost/benefit ratios and acceptable rates of return, were still not being funded, because there were other projects in less outlying parts of the country with stronger business cases and better rates of return.    

Conclusion

There are lots of soundbite solutions flying around at present on how best to strengthen the Union, including establishing a Royal Commission to consider the matter.  These initiatives are all well-intentioned.  However, on the principle that it is better to have some idea of your ultimate destination before embarking on a potentially perilous constitutional journey, it might be better for reform-minded Unionists of all parties to identify in advance the firm and common ground on which we can all stand before launching any more conventions or commissions.

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