28 September 2014

Red lines

It is time for clear, and perhaps counter-intuitive, constitutional thinking. The SNP have nominated John Swinney and Linda Fabiani to the Smith process to hammer out the post-referendum devosomething deal with the Tories, Liberals, and Labour Party. They'll have to apply themselves to a broad gamut of legal and political issues. Much of that conversation will focus, inevitably, on the distribution of competencies between Westminster and Holyrood around taxation and social security. 

Much of the debate hitherto has focussed on current UK taxation and welfare schemes. We've not been talking about new, potential approaches to tax and welfare very much, but who controls the schemes we already have. Who has the final say over housing benefit levels and entitlements? Who sets attendance allowance? Bartering over the specifics is important - but I wanted to flag up one key concession which (a) ought to be uncontroversial and (b) which, to my mind, the SNP team should treat as a red line in this negotiation: building more flexibility into the Scotland Act in the field of social security. The position as it stands is a wee bit tricky: brace yourself for the Law Bit.

The Scotland Act 1998: Holyrood's (very) limited say over social security

Head F of Schedule 5 of the Scotland Act makes a very broad reservation of powers to Westminster in the field of social security, with certain exceptions. Remember, the Scottish Parliament cannot legally pass legislation which "relates to a reserved matter". If Holyrood produced an Act of Parliament, purporting to abolish the Westminster legislation which consolidated social security entitlements into a universal credit, or to vary the rate of incapacity benefit paid in Scotland, it'd be no law at all, beyond Holyrood's "legislative competence," and struck down by the courts. And fair enough, to some extent, so long as core UK benefits remain centralised. 

But the social security restrictions written into the Scotland Act go much further than only preventing Holyrood meddling in Westminster's powers: it blocks the Scottish Parliament from introducing its own, distinct, social security schemes. Winning that flexibility is critical in the Smith process. 

Say the Scottish Government wanted to invest public money into a new welfare scheme to provide financial assistance to some sub-set of the public which they felt have fallen through the cracks of the UK system, or who they believe are getting an raw deal from the UK social security system. Say, for example, Scottish Ministers felt that disabled people should be entitled to an extra £2 a week - a supplementary Scottish disability rate - above and beyond the penurious incapacity benefit shelled out by the central government. Could it be done? As things stand, the answer is a resounding No.

Under the current devolution legislation, any such scheme, however desirable, would be illegal. We'd be toddling up the road to the Court of Session, only to be told that ye cannae do that, quick as you like. The Scottish Parliament can run its own prescriptions charging policy, and abolish university fees, but it isn't allowed either (1) to supplement centrally-devised levels of UK social security, or (2) to authorise new schemes of public spending for targeted welfare purposes, according to political priorities and perceptions of need. Why not? If the Scottish Parliament wants to use its limited budget in this way, what argument of principle if there to prevent them?

Why not give Holyrood greater flexibility in welfare?

In contrast with, for example, devolving incapacity benefit wholesale, introducing additional flexibility to add to but not to subtract from welfare spending in Scotland sits entirely comfortably alongside the Labour party's "pooling and sharing" conception of what the Union is for. You'd be entitled to the same UK minimum levels of social security in Carlisle and Carluke, but the Scottish Parliament would be able to identify and enact different spending priorities insofar as their budget allowed and their priorities dictated.

Such a scheme wouldn't undermine the social contract between workers north and south of the border, it wouldn't powderkeg the "sharing union" which so animates Labour's Devolution Commission report. It wouldn't represent a race to the bottom in welfare, but potentially, a mechanism to encourage fairer settlements in social security spending across the UK. What's not to like? If the Scottish Parliament wants to supplement levels of UK benefits, that could be disbursed using existing systems. If MSPs want to create a new scheme, they'd have to soak up the cost of its administration. Those are challenges, practical challenges, but hardly insuperable.

The only route I can see for Labour to object to this additional flexibility would be the jealous and thoroughly pointless insistence that such questions are for Westminster alone. But as Labour's own limited plans to devolve housing benefit and attendance allowance concede, social security schemes are not and should not only fall within the UK parliament's purview. The screws have already fallen out of that ramshackle argument. 

Critically, there are also some signs that this reform could carry the balance of opinion in the Smith process. The Conservative Strathclyde Commission half-recognised that the status quo of the Scotland Act was unnecessarily prescriptive in the welfare field, noting that the current:

"... strict reservation of social security schemes to Westminster is rather rigid. It may be that a better approach would be for the Scottish Parliament to have the power to supplement existing welfare benefits legislated for at the UK level. Everyone in the UK – wherever they live – should be entitled to at least the social security provided for in UK legislation at Westminster. But, if the Scottish Parliament were to take the view that, from its own resources, the UK entitlement should be supplemented in Scotland, it may be that Holyrood ought to be able to legislate accordingly." (pp. 16 - 17)

It's important to be vigilant about the gap separating (a) the Strathclyde Commission's limited endorsement of the idea of Holyrood  supplementing benefits and (b) giving Holyrood the more general green light to work up its own Scottish social security schemes, distinct from central UK welfare measures. Swinney and Fabiani should be agitating for both in the course of the debates presided over by Lord Smith of Kelvin.  

In practice, public spending restraint will clearly put a cap on how much good Holyrood would realistically be able to do with this new flexibility in the short to medium term - but that's a debate for the future. It is a question of governance, not policy. In principle, the case for greater Scottish welfare flexibility is unanswerable. As the SNP pulls together its constructive response to the post-referendum future, building on the lukewarm Strathclyde Commission recommendations, loosening the ties that bind here must be a major priority.

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