Permanent Devolution

Who says history doesn’t have a sense of humour. 2007 was
supposed to be all about celebrating the 300th anniversary of the Act
of Union; in reality it was largely about dismantling it. For, who could have forecast twelve months ago that nationalists
would be in office in all three of the devolved legislatures of
the UK - with the SNP running Holyrood; Plaid Cymru in coalition with
Labour in Cardiff; and the nationalist Sinn Fein sharing power with
Ian Paisley’s DUP in Stormont? It is the unionist nightmare come
true; a separatist clean sweep.

The rise of provincial nationalism is by far the most
significant political development in Britain in the last twelve
months - far more important than the election-that-never-was, or even
the change of personnel in Number Ten. Gordon Brown is intending to
pursue largely the same political and social agenda as his
predecessor, but he will discover in the New Year that large parts of
the United Kingdom are now resistant to it.

Already, Scotland has a range of distinctive social policies -
free personal care, free higher education, free prescriptions- some
of which have aroused resentment in the south. But this is only the
start. In 2008, the nationalist First Minister, Alex Salmond
intends to scrap the council tax and replace it with a local income
tax - a move that will cause disquiet among English pensioners. Salmond has the powers and the votes to do
it and has already frozen council tax in Scotland.

The Scottish Government has also served notice that it intends to repatriate powers to Holyrood over firearms - primarily in
order to ban air weapons - and also over immigration and
broadcasting. The home secretary, Jacqui Smith has said 'no', but that is unlikely to stop the new Scottish government. Salmond also intends to challenge Brown’s cherished policy of public private partnerships, or
PFI. The First Minister plans to set up a "Scottish Futures Trust", which will issue
bonds to finance public procurement projects - like a new £4 bn
Forth Road Bridge - rather than using the PFI route. This is in
direct defiance of treasury rulings that such a move is incompatible
with devolution.

The Scottish government has refused to accept any of the new generation of nuclear power stations announced for England. And to top all that, Salmond also intends to step
up demands for a share of North Sea Oil revenues, now that oil stable at around $90
dollars a barrel, and will campaign for the Barnett Formula to be
scrapped. The First Minister is an inspired opportunist who has discovered that even a minority administration can achieve a great deal within and without the terms of the Scotland Act.

Westminster has yet to come to terms with it, but legislative
dissonance is likely to become one of the defining features of UK
politics. The pace of policy differentiation is
increasing dramatically as the subordinate legislatures begin to feel
their strength. They are now feeding off each other, and joining in
tactical alliances. In 2007, the Scottish government joined with
Stormont to call for powers to vary the rate of corporation tax.
Northern Ireland wants to cut business taxes in order to compete with
the Irish Republic, and Scotland is saying, ‘me too’.

The Scottish Parliament has borrowed the policy of free
prescription charges from the Welsh Assembly. Meanwhile, Cardiff has
used Holyrood as a template on which to model its own demands for primary legislative
powers. This is a relentless process which will lead inexorably to
power draining to the peripheral governments of he UK."Permanent devolution" as LeonTrotsky might have called it.

And it is now
largely independent of which party happens to be in power. In November, all the Scottish opposition parties united - Labour,
Liberal Democrat and Conservative - to form a constitutional
commission to demand more powers for the Scottish Parliament. Even
the ultra-unionist Scottish Conservative Party, which fought doggedly
against devolution for twenty years, has now joined the home
rule consensus, and is arguing for the Scottish parliament to have greatly enhanced economic and tax-raising powers. The unionist status
quo is now disowned by the entire Scottish political class.

. Whisper it, but Labour in Scotland is now closer to the SNP than
it is to Gordon Brown. Wendy Alexander, the new Scottish Labour
leader has defied her own Prime Minister by declaring that devolution is a
“process not an event” and that the Scottish Parliament needs to have
greater powers. Gordon Brown had told Scots at the launch of Labour's
Scottish election campaign that more powers were not on the cards for
Holyrood.

The PM told the Liaison Committee of the House of Commons
in December that people in Scotland had to recognise that devolution
was not the same as federalism. But the way things are going,
federalism looks like the least worst option for Westminster.
In another highly significant development in 2007, the
Conservative leader, David Cameron, finally endorsed the plan for an
English Grand Committee in Westminster, composed of all English MPs.
The idea is that this body should handle England only bills under the
rubric “English votes for English laws”. But it would rapidly evolve into a defacto
English parliament. Cameron is unlikely to back down on this in
2008 because, as Tory support rises in the polls and English disquiet
grows, he can already see the tantalising prospect of returning a
majority of MPs in England after the next election.

If such a body is set up in Westminster - perhaps as a result of
a coalition deal with the Liberal Democrats, who also support an
English Parliament - then federalism is inevitable. My own view is
that there is unstoppable momentum now behind the disaggregation of
the United Kingdom, and that time is running out for the political
establishment in Westminster to respond to it. This country is
changing before our eyes. And - it has to be said - largely for the better, as the old centralised apparatus disintegrates before regional democracy

Now that the unionist parties in Scotland have all but given up the ghost, the UK faces a
choice in 2008: adopt some form of orderly federal solution, or
prepare for political disintegration, on the lines of
Czechoslovakia’s “velvet divorce” in 1993. It is as serious as that. While Gordon Brown
launches fatuous “Britishness” campaigns, the very fabric of the
country he claims to love is being torn up and stitched anew.