September 23, 2014

Scotland's 'no' will boost UKIP and dampen 'Brexit'

The Oxford Analytica Daily Brief ® - Friday, September 19 2014

Yesterday Scottish voters rejected independence by 55.3% to 44.7%, with a turnout of 84.6%. Prime Minister David Cameron today said he would "honour in full" promises made during the past two weeks by the leaders of the three main UK parties to give Scotland greater powers over taxation and spending. However, he specified that this must take place "in tandem with and at the same pace" as the resolution of the question of "English votes for English laws", as well as proposals to give more powers to Wales. The timeline for these parallel processes -- agreement by November and draft legislation by January -- is so ambitious as to be unrealistic, and any implementation would most likely be delayed until after the general election in May 2015.

•The United Kingdom is set for months, if not years, of haggling to agree what amounts to a constitutional overhaul.
•This process, plus the probable hung parliament in 2015, may delay Conservative and UKIP efforts to renegotiate the UK-EU relationship.
•A 'Brexit' scenario is modestly less likely.

What next
The likely gainer will be the UK Independence Party (UKIP) -- which claims to represent those hostile to the political class -- as the party of English nationalism. Therefore, the outcome makes a hung parliament in the general election of 2015 more likely, with an increase in the UKIP vote -- though, under the first past the post system, this is unlikely to be reflected in a significant number of UKIP seats in the House of Commons.

In Scotland, the surge in support for 'yes' in the last two weeks of the campaign and the strong feelings aroused mean that the debate on independence is unlikely to come to an end. Before the result, Scottish First Minister and Scottish National Party (SNP) leader Alex Salmond had said that there would not be another referendum for a generation.
However, if the SNP were to gain a high vote in the UK general election in May 2015 -- or to win another overall majority in the elections to the Scottish parliament in May 2016 -- there may well be pressure for a further referendum.
For now, the Scots will insist that promises of wider devolution are honoured. Greater powers over taxation, particularly income tax, can be justified as yielding fiscal responsibility to the Scottish government so that it raises a larger part of its revenue from its own resources, rather than being a 'pocket-money parliament', relying on hand-outs from Westminster.
In addition, Scotland is likely to be given further powers over welfare matters.
Constitutional overhaul

English MPs will drive a hard bargain in exchange for agreeing to deliver greater powers to Scotland
The three party leaders promised Scotland these powers without consulting parliament, in which the vast majority of the members (MPs) are from England. There may be pressure from English MPs and their constituents not to concede further benefits to Scotland. Therefore, it is by no means certain that parliament will agree to deliver the new powers that have been promised.
If they are delivered, there can be little doubt that the National Assembly of Wales and the Northern Ireland Assembly will demand similar powers. Moreover, these pressures in the non-English parts of the United Kingdom are likely to stimulate English nationalism, hitherto quiescent (see UNITED KINGDOM: England may follow Scottish devolution - July 16, 2014).

English devolution
England will push to redress the imbalance in the UK constitution arising from asymmetrical devolution. In particular, the West Lothian Question will be resurrected:
•English MPs and electors will ask why Scottish MPs can continue to vote on laws on English domestic matters (such as health and education), when in Scotland such matters are devolved to the Scottish parliament, with England allowed no say.
•The Question will be raised even more insistently if, at the UK general election in May, a Labour government is returned dependent on the votes of MPs from Scottish constituencies.
There will be pressure to resolve the West Lothian Question by creating a separate English parliament, as England is the only part of the United Kingdom without a devolved body to represent its interests -- or for 'English votes for English laws' whereby only English MPs in Westminster can vote on laws relating to England.
However, these 'solutions' raise serious problems:
An unbalanced, quasi-federal state
The creation of an English parliament would turn the United Kingdom into a quasi-federal state, but a highly unbalanced one -- there is no other democratic federation in which one of the units represents 85% of the population.
More costly and bureaucratic government
At a time when there is resentment of the political class, many would not take kindly to the introduction of another layer of government with its concomitant swathe of politicians, officials and costs. There would also be problems of coordination between the English parliament and the parliament of the United Kingdom, requiring an inter-governmental layer of officialdom.
Disunited Kingdom
'English votes for English laws' raises the problem that, whenever a government depends upon the votes of Scottish MPs, the Cabinet would be bifurcated:
•There would be one (UK) government for foreign affairs, defence, macro-economic policies and other non-devolved matters -- and another (English) government for devolved matters such as health and education.
•However, a government must be collectively responsible for all of its policies, not just for a selection of them. It cannot swing to and fro between government and opposition benches according to the issues being discussed.
Options other than an English parliament
Devolution in England is unlikely to take the form of devolution to new regional institutions -- that was rejected in a 2004 referendum in the north-east by a majority of four to one -- but to local government. Most of the great cities of the Midlands and the North have rejected directly elected mayors. Still, they are likely to ask why they cannot be given wide taxing powers and fiscal responsibility.
The greater the degree of devolution, the greater the dangers of a 'postcode lottery' (with different standards of welfare in different parts of the country). Such disparities have already begun to appear between Scotland and England, and they are likely to widen between different parts of the United Kingdom as devolution comes to be extended

Political losers and winners

UKIP will likely be boosted by the rise in English nationalism
Politically, the vote is likely to discredit all three political leaders who will be held to have put the country at risk.
Cameron will be accused of having mishandled the negotiations with Salmond and with not taking it seriously enough until a very late stage. Opposition Labour leader Ed Miliband will be accused of having allowed Labour's core vote to swing to the `yes' camp.
Many English MPs regard promises made to Scotland at a late stage of the referendum campaign as a sign of panic. The criticism will be directed to the political class as a whole -- and this will likely lead to a hung parliament in 2015 (see UNITED KINGDOM: Hung parliament could hurt recovery - July 29, 2014).

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