The Calman Commission has just done for Scottish devolution what the Richard Commission did for Wales. It has conducted a large-scale review of what devolution does and how, concluded it is largely a success, and recommended changes to make it work better. Like Richard, it is a detailed, carefully-considered review based on a large body of evidence, and its recommendations need to be read as a package, rather than as a box of chocolates from which the parties are invited to choose those they like.
Some of those recommendations relate to the working of the Scottish Parliament (it suggests altering the later parts of the legislative process at Holyrood). Others relate to the powers of the Parliament, with some fairly minor adjustments either way – control of airguns, speed limits and drink driving and Scottish Parliament elections should be added to devolved powers, regulation of some health professions returned to London. (This is a long-standing niggle for those in health, as most of the major professions including doctors and nurses are regulated at UK level.)
The most eye-catching provisions are those relating to finance. The Commission recommends substantial fiscal autonomy for Scotland, with the power to alter all rates of income tax by 10 per cent. Along with this several smaller taxes – stamp duty land tax, landfill tax, the aggregates levy, and air passenger duty. There would be scope for Scotland to introduce new taxes, in a way not possible at present – for example, on plastic shopping bags. With local taxation, which is already devolved, this would mean about a third of Scottish government spending would come from Scottish taxpayers. The block grant to Scotland would be cut accordingly. The Scottish Government would also get the power to borrow, particularly for funding capital investment in infrastructure. With autonomy comes responsibility; and to make sure both are evident, the UK tax rate in Scotland would be reduced by 10 per cent before handing it to the Scottish Parliament. If Holyrood did not make a conscious choice to tax (and so of the rate), it would get no revenue so would have to cut its spending. And the report foreshadows two sets of cuts in the block grant – first, because of the introduction of a degree of fiscal autonomy, and second because of a shift in how the block grant is calculated, toward something that more directly reflects needs (which it considers to be inevitable).
There are big differences between the Calman and Richard reports One is context. All the major parties in Wales were involved in the Richard Commission. In Scotland, the SNP was conspicuously un-involved in the Calman process (though it submitted evidence on borrowing powers, at Lib Dem behest, and the Constitution Minister attended the Calman launch). While the Richard Commission could plausibly claim to represent all major political currents in Wales, that cannot be said of the Calman commission. The SNP government continues with its own ‘National Conversation’ debate, and plans to introduce a bill for a referendum on independence later this year, although it is now clear that that lacks the support needed to get it passed by the Scottish Parliament The Scottish constitutional debate remains divided, and part of the reason for the UK Labour government’s support for the recommendations may well be the party-political one of using it as a means of undermining support for the SNP for both Westminster and Holyrood elections.
The other big difference is the report’s reception. Calman has been warmly and immediately welcomed by most political forces – the leaders of the three Unionist parties in Scotland (which set it up), and by such UK politicians as Jim Murphy, the Scottish Secretary, and Gordon Brown. Tuesday’s Scotsman suggests Labour intends to introduce the new system within 10 months, before a UK general election. The SNP has been more mixed in its response – critical of its adequacy in general, particularly on finance, but supportive of some aspects. So unlike Richard, this appears to be on its way to happening, and doing so largely intact.
What are the implications of the Calman recommendations for Wales and Welsh devolution? One is to be thankful that there is much greater agreement between all parties about how devolution should develop than in Scotland, where the disjointed constitutional debate has done the general public no favours. The second is that Wales now has to take ideas about finance and fiscal autonomy more seriously. The Holtham Commission is due to publish its report on the Barnett formula and block grant quite soon (as is the House of Lords Select Committee). Issues of fiscal autonomy and borrowing are to be left until its second report later in the year. Fiscal autonomy has many fewer attractions for Wales than Scotland, of course, but Wales needs to think through whether it wants to be on a similar footing to Scotland or not. All three sets of devolution arrangements initially conferred extensive scope to shape policy, but with little control of finance. That is clearly changing. Where does Wales want to stand?
