Why Tory backbenchers might think twice before rebelling against Scottish “devo plus” – the politics of public spending and nationhood after the referendum - Prof Perri 6 - Chair in Public Management, Queen Mary

This is the second in a series of articles on this blog about the consequences of the Scottish referendum and the “vow” made by the three leaders of the main unionist parties. Having looked in the last piece at the likely development of Scottish National Party strategy to address the major public policy and public management challenges their programme faces, this article examines the implications for the public services of the positions emerging within the Conservative party.

The Conservatives' stance on the the terms and value of the union and on the governance of public spending in Scotland and the other countries of the UK now appears more divided than that party has been on these issues in their history.

Mr Cameron's “vow”, as part of his pitch to voters in Scotland to remain in the union, was that the Barnett formula on shares of public spending in the four countries would be maintained. As I argued in a recent post, Mr Cameron appeared – without clearly saying so – to allow Scots to expect that block grant payment to Scotland would not be reduced proportionately in response to tax increases made by the Scottish parliament under either its existing or new proposed tax-varying powers. Secondly, he committed his party to support additional powers for the Scottish parliament, which would include powers to control some taxes, although the details have yet to be settled. Based on the recommendations of the Conservatives' commission report chaired by Lord Strathclyde, we could expect much more extensive control over income tax for the Scottish parliament than Labour's or the Liberal Democrats' commissions recommended (see my brief summary analysis here).

What the Scottish Nationalists will do next – a better currency plan for the next referendum - Prof Perri 6 - Chair in Public Management, Queen Mary

Stone of Scone: Soon to be available in notes and coins

Developments in the middle east have moved Westminster politicians' attention, and that of London journalists, on from the fallout from the Scottish referendum. But expectations have now been raised both in Scotland for further devolved powers and in England for constitutional change which will soon return these issues to the top of everyone's agenda. Indeed, already the shape of the coming debate is becoming clearer.

This article considers first, what the Scottish National Party is likely to do next to pursue its aims, given the position that its 45% vote and the response of the Westminster politicians has put that party in. In later posts, I shall I turn to the question of how the two largest unionist parties might address the dilemmas each faces.

Having come fairly close to a majority for secession, the new leaders of the SNP who take over from Alex Salmond will be looking for an opportunity to capitalise on the momentum they were able to sustain in the final months of the 2014 referendum campaign. The “vow” made by the leaders of the three main unionist parties in their last-minute intervention to persuade wavering Scots to support the union will soon present the SNP with an opportunity. Because the vow's terms were so imprecise (see my article about its limitations published immediately after the leaders' statement, it should not be too difficult for the next SNP leader to declare whatever the government offers as being in default, by comparison with what the SNP will claim they were led to expect. Should Conservative backbenchers make determined effort to make the offer of further devolution for Scotland conditional upon reform of the voting system in Westminster on laws which are to apply only in England, the SNP will find it easier still to try to charge UK politicians with “reneging” on whatever the SNP claims the terms of the “vow” led it to expect. The next step for the SNP will be to claim that this default releases it from the terms of Mr Salmond's undertaking not to bring back the question of independence to a second referendum for “a generation”. It appears that many Scots expect no less. Lord Ashcroft's organisation polled Scots after the referendum, discovering no fewer than 45% of “yes” voters thought it likely that the SNP would find a way to bring the question back before the Scottish people within five years.

The Economic Consequences of the Scottish Referendum - Prof Brigitte Granville - Professor in International Economics and Economic Policy, Queen Mary

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The political result of the Scottish referendum – the preservation of the Union combined with a commitment by the UK political class to devolve further powers to Scotland – has naturally led to most instant commentary being focused on the political and, more specifically, constitutional consequences.  By contrast, the economic results will have difficulty competing for the attention they deserve – especially what looks likely to be the most tangible economic result: higher taxes in Scotland. This change holds out the interesting prospect of increased competition within the UK as regards the balance between the tax burden and the quality of public services.

The likelihood of higher taxes in Scotland is clear from a straightforward analysis of the referendum campaign and result. The ‘Yes’ platform was overtly redistributionist. It depicted union with England as binding Scotland into fiscal restraints that reflected the preferences of the UK political class (especially as represented by the Conservative Party that is the dominant partner in the present UK coalition government) rather than the choices and needs of the Scottish people. The electorate clearly got that message. An analysis of voting patterns in the referendum shows that the ‘Yes’ vote was higher in areas where there were proportionally more voters with the greatest dependency on the welfare state – such as the unemployed and recipients of disability benefits.  Against this background, and on the safe assumption that the promised further instalment of devolution will focus on tax raising powers, it follows that future elections to the Scottish parliament are likely to be won on platforms of higher marginal taxation to finance increased public spending.

After the referendum “no” vote, what next? Part Three - Decentralisation within England – the four biggest difficulties - Prof Perri 6 - Chair in Public Management, Queen Mary

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Now that the Scottish voters have rejected independence by a modest majority, debates begin in earnest and with urgency about what can happen next. This third post in the series considers the implications of the discussion about decentralisation within England, following the prime minister's remarks in his speech in response to the referendum result.

Mr Cameron said on the morning of 19^th September “It is also important we have wider civic engagement about to improve governance in our United Kingdom, including how to empower our great cities. And we will say more about this in the coming days.”

Debate about this has been intense over several years. A series of commissions has published reports, including the City Growth Commission chaired by investor Jim O'Neill (its final report is due next month). But we cannot yet know which approach the government will propose. So here I confine myself to specific issues which have got lost in the mist of general encomium for the principle of greater decentralisation, but which will present major challenges of public management.

After the referendum “no” vote, what next? Part Two - Mr Danny Alexander's difficult position, and the prospects for executive accountability when Scottish MPs and ministers cannot vote on English matters - Prof Perri 6 - Chair in Public Management, Queen Mary

Now that the Scottish voters have rejected independence by a modest majority, debates begin in earnest and with urgency about what can happen next. This second post in the series examines the implications for the public services of Prime Minister Cameron's pledge to restrict the rights of Scottish MPs at Westminster to vote on issues designated as principally English or English and Welsh in application.

Mr Cameron announced that he will take Alexander the Great's sword to the Gordian knot of the “West Lothian question”. Because the issue has been debated since the first proposals for devolution for Scotland in the 1970s, commentators immediately recognised the implications for any future Labour government. More on this in a moment.

What has not been appreciated is the immediate consequence for Mr Cameron's own administration.

In my post of 17^th September, I pointed out the difficulty that Chief Secretary to the Treasury Danny Alexander would have had on Friday 19^th September if the Scottish people had voted “yes”. Mr Cameron's announcement has in fact put his Chief Secretary in the same dilemma that I identified as the outcome of a “yes” vote.

After the referendum “no” vote, what next? Part One - The coming clash over money for the public services - Prof Perri 6 - Chair in Public Management, Queen Mary

Now that the Scottish voters have rejected independence by a modest majority, debates begin in earnest and with urgency about what can happen next. The leaders of the unionist parties have been made promises to the people of Scotland. Much of the discussion will now be about just what counts as having met those promises, and whether the measures which implement them will acceptable in England as well as in Scotland. This will carry major implications for public spending. Prime Minister Cameron's pledge to restrict the rights of Scottish MPs at Westminster to vote on issues designated as principally English or English and Welsh in application reopens hugely difficult constitutional problems and for the oversight and accountability of the public services. Finally, the final weeks of the referendum campaign exposed some vital issues of public management which have still not been adequately examined by the mainstream press and broadcasting companies. This set of post-referendum briefings  will explore each of these issues in turn. The first one examines the public spending issues which will now come to the fore.

Who will Britain's civil servants be working for on Friday morning? Urgent decisions this week, if there is a “yes” vote – but in whose interests? - Prof Perri 6 - Chair in Public Management, Queen Mary

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If the people of Scotland vote for independence tomorrow, Thursday 18^th, the process of separation will not, as too many politicians have suggested, be postponed for eighteen months of negotiation. It will begin around five in the morning on Friday, 19^th September.

            

Civil servants in the Treasury, in the Bank of England, the Foreign Office, the Ministry of Defence and those parts of the Home Office which are responsible for immigration policy will immediately find themselves briefing ministers on how to negotiate with the Scottish government. De facto, therefore they will already be working for what will, in these hitherto reserved functions, be a “rump UK” government. More to the point, they will be advising ministers on how to protect the interests of England, Wales and Northern Ireland in those talks, not those of Scotland which will already be represented by the Edinburgh government. Long before independence would be announced, the role and accountability of senior London civil servants and the interests they serve will have changed drastically. They will have to adjust the advice they offer to ministers accordingly – and do it immediately when they start work on Friday morning.