What if Scotland votes ‘No’?

What if Scotland chooses to remain in the United Kingdom? Will it be possible to find an arrangement for the governance of the UK that the public on both sides of the border would find acceptable? There are, after all, already some well-aired grievances about the allegedly advantageous position that the current asymmetric devolution settlement affords Scotland. Some question the right of Scottish MPs to vote on laws that will not apply north of the border when English MPs have no say over any equivalent Scottish legislation (Conservative Democracy Task Force, 2008; Heffer, 2005; Russell and Lodge, 2006). Others suggest it is unfair that Scotland enjoys a higher level of public spending per head than England, especially when it is not necessarily obvious that such spending can be justified by levels of need (McLean, 2005; McLean et al., 2008). Meanwhile, north of the border, various proposals have been put forward for giving the Scottish Parliament more powers and responsibilities (Devo Plus Group, 2012; Campbell, 2012; Lodge and Trench, 2014; Scottish Labour Devolution Commission, 2014; Trench, 2013). So there may well be pressure for Scotland to be given even more devolution than it enjoys now, a pressure to which the rest of the UK may or may not be willing to accede.

Current grievances

We start by considering how far public opinion in England is exercised about some of the alleged unfairness of the current devolution settlement. As Table 2.2 shows, people in England are certainly not very happy about the fact that Scottish MPs can vote on laws that only affect England. As many as 62 per cent agree that they should not, while only 8 per cent take the opposite view. However, the level of agreement is no higher now than it was in the early days of devolution, and to that extent people in England have not become increasingly concerned about the issue – though the proportion who “agree strongly” that Scottish MPs should not vote on English laws has grown by some ten percentage points or so since the early years of devolution. It seems unlikely that this issue will go away, though as yet the proposals of a government appointed commission to address the apparent anomaly through creating an opportunity for English MPs alone to express their views on ‘English’ laws are at present still gathering dust (McKay, 2013).

On the other hand, England seems to be rather less concerned about Scotland’s share of public spending, though critics are more numerous than they once were. We asked:

Would you say that compared with other parts of the UK, Scotland gets pretty much its fair share of government spending, more than its fair share, or less than its fair share of government spending?

Please choose your answer from this card.

1. Much more than its fair share of government spending
2. A little more than its fair share of government spending
3. Pretty much its fair share of government spending
4. A little less than its fair share of government spending
5. Much less than its fair share of government spending 

As Table 2.3 shows, only just over a third (36 per cent) now think Scotland gets more than its “fair share”. At least as many (37 per cent) think that it simply secures “pretty much its fair share”, though only one in twenty feels that Scotland gets less than its fair share. The proportion who think that Scotland gets more than its fair share is undoubtedly higher now than in the early years of devolution, when only a little under a quarter were of that opinion, but it is slightly lower than the figure of two in five or so that hitherto has prevailed since 2008. So while there is some resentment about Scotland’s perceived share of public spending, it is far from widespread and is not necessarily continuing to grow. It is also notable that each year between a quarter and a fifth of respondents say they do not know whether Scotland secures its fair share or not, an indication perhaps that the subject is not very salient in many people’s minds.

But how do people in Scotland react when these propositions are put to them? Would they be upset if the rights of Scottish MPs to vote on English laws were to be limited? Does Scotland itself feel that it gets a good financial deal out of the UK, or might it think it should attract more government spending?

It seems that there would be relatively little objection in Scotland to limiting the right of Scottish MPs to vote on English laws. As Table 2.4 shows, typically just over half agree that Scotland’s MPs should not be voting on such laws, while only around one in five or so disagree. Both proportions have changed little since the advent of devolution, other than that perhaps opposition to the idea may have fallen a little (from 24 per cent in 2001 to 18 per cent now), while the proportion that “agree strongly” has increased from 14 per cent in 2000 to 21 per cent now. 

Scotland is not so sanguine when it comes to its share of public spending. When asked exactly the same question as we have already seen was posed to people in England, two in five (40 per cent) of those living north of the border say that Scotland secures less than its fair share of spending, while only around one in ten (11 per cent) believe the country is being treated generously. However, people in Scotland are less likely to be critical of the share of spending that they get than they were in the early days of devolution, when as many as 58 per cent said that Scotland received less than its fair share. Indeed, it is notable that this perception has been less common ever since the SNP first came to power in Edinburgh in 2007 (when the proportion feeling that Scotland gets less than its fair share fell from 49 per cent two years earlier to 36 per cent). Any move to reduce Scotland’s share of public spending, as a minority of people in England would seemingly like to happen, would doubtless be unpopular, but it seems that there is no reason to anticipate any imminent public pressure from north of the border for Scotland to be given a bigger slice of the cake than it already enjoys.

Future changes

On the other hand, should Scotland decide to vote in favour
of staying in the UK there is likely to be pressure for the country’s devolved institutions to be given more power and responsibility. Some changes are indeed already in train; under the provisions of the 2012 Scotland Act the Parliament will become responsible (in 2015) for landfill tax and stamp duty on property purchases and (in 2016) for the first 10p of income tax.[1] However, this still means that the bulk of decisions about taxation and welfare will remain the preserve of the UK government at Westminster, and that these will remain the principal areas of domestic policy that are not wholly or primarily in Edinburgh’s hands. Yet a clear majority of people in Scotland would appear to want their devolved parliament to be more powerful than this. As Table 2.6 shows, in recent years typically around a third or so have said that the Scottish Parliament should make all the key decisions for Scotland (a proposition that is tantamount to independence) while another third have indicated that it should be responsible for everything apart from defence and foreign affairs. 

But would the rest of the UK be happy to see yet more powers devolved to Scotland? The answer appears to be “probably”. When in 2013 respondents in England and Wales were asked the question outlined in Table 2.6, 24 per cent said that the Scottish Parliament should make all the decisions for Scotland, while another 25 per cent backed the devolution of everything apart from defence and foreign affairs. On the other side of the fence, 27 per cent indicated that taxation and welfare should continue to be a UK responsibility, while 18 per cent indicated that they believed that there should not be a Scottish Parliament at all. In short, just under half (49 per cent) backed the idea that Scotland should be responsible for the bulk of its domestic affairs, while slightly fewer, 45 per cent, would prefer no Scottish Parliament or one with no more powers than those it has already.

However, this line of questioning does not refer explicitly to Scotland being granted more powers than it has at present. Perhaps if this is made clear, people in the rest of Britain would be inclined to say that, “enough is enough”. To assess this possibility we asked respondents in England and Wales: 

Say that Scotland decided it wished to remain part of the UK, but that it wanted the Scottish Parliament to have more power and responsibility for making key decisions about taxation and welfare benefits in Scotland. Would you be in favour or against allowing Scotland to have more power and responsibility in these areas?

In practice, this question did not evince any greater hostility; nearly half (45 per cent) said they would be in favour, while only 27 per cent would be opposed, with 23 per cent saying they would be neither in favour nor against. Public opinion in the rest of the UK would not necessarily be enthusiastic about more Scottish devolution, but would probably be willing to tolerate it.

Exploring the consequences of more autonomy

Giving the Scottish Parliament substantial power and responsibility for taxation and welfare would, however, have two important consequences. First, it would imply that rates of taxation and of benefits could be different on the two sides of the Anglo-Scottish border. Second, it would mean that taxes raised in Scotland would be used primarily to fund services in Scotland alone rather than being shared across the UK as a whole. Equally much of the money used to pay the benefits that people in Scotland receive would have to come primarily out of tax revenues collected in that country rather than from a UK-wide pot. Perhaps these implications cut across a feeling that British citizens should all have the same ‘social rights’ backed by the same state-wide pool of taxation resources, irrespective of where in the UK they live (Calman, 2009; Scottish Labour Devolution Commission, 2014).

As Table 2.7 shows, there is considerable reluctance to embrace the idea that taxation or welfare benefits might be different on the two sides of the border – but in this respect people in Scotland and those in the rest of Britain are largely at one. A little over a half of people in Scotland feel that the basic rate of income tax should always be the same on both sides of the border, a view that is at variance with the provisions of the 2012 Scotland Act, let alone any further devolution. At around three-fifths or so, the proportion who think the old age pension should be the same is even higher. Meanwhile, as one might anticipate, the idea that income tax and the pension should be the same throughout the UK is even more popular in England than it is north of the border.

We might, though, have anticipated that people in Scotland would be relatively keen that the monies raised from taxation in Scotland should be used to fund public services just in Scotland, and not be used to help pay for services across the UK as a whole. Table 2.8 shows the responses to two questions designed to assess this issue. The first of them reads as follows:

Regardless of what happens at present, how do you think the money raised by the income tax paid by people in Scotland should be used? Should it be used to help pay for public services across the UK as a whole, or should it be used to help pay for services in Scotland only?

The same question was then asked about, “the money raised through taxes on North Sea oil in Scottish waters”. 

In both cases public opinion in Scotland is split more or less evenly on the issue. Indeed, despite the fact that “it’s Scotland’s oil” was a famous slogan that the SNP used during its first electoral breakthrough in the 1970s (and even though allegations of misuse of those revenues by the UK government forms part of the nationalist case for independence), slightly more people (50 per cent) think the revenues from North Sea oil should be shared across the UK as a whole than feel they should be spent exclusively in Scotland (44 per cent). However, there is no doubt where the balance of public opinion on this subject lies in England and Wales – there most people feel the revenues from Scottish taxation should be used to help pay for services across the UK as a whole, and this feeling is particularly widespread when it comes to the revenues from North Sea oil.

Scotland itself is even less keen on funding welfare benefits out of its own resources than it is on keeping its tax revenues to itself. This became evident when respondents were asked: 

What about the cost of paying benefits to people in Scotland who lose their job through no fault of their own? Regardless of what happens at present, should the money to pay this come from the taxes collected across the UK as a whole, or from those collected in Scotland only? 

The same question was also asked in relation to the “cost of paying the government old age pension to people living in Scotland”. As Table 2.9 shows, in both cases around three-fifths would prefer the necessary funding to come from across the UK as a whole. In contrast, people in England and Wales take much the same view of how these welfare benefits should be funded as they do about how income tax revenues should be used, with two-thirds (66%) saying they should be funded from a UK-wide pot.

There are perhaps two ways of looking at the apparent inconsistency, evident on both sides of the border, between a largely favourable attitude towards the principle of devolving decisions about taxation and welfare in Scotland to the Scottish Parliament and less favourable views towards some of the consequences of doing so. On the one hand, it suggests that exercising the powers of further devolution may be more difficult than is immediately apparent, and that, in particular, future Scottish Governments may find it politically quite difficult to introduce different tax rates from those found south of the border. If so, that would appear to reduce the risk that tax (and welfare) devolution might come to offend English and Welsh sensibilities. On the other hand, the inconsistency also indicates that public opinion on both sides of the border remains sympathetic to the principle of sharing resources and benefits across the UK as a whole, and that might be thought to provide a valuable foundation for continuing collaboration across the UK as a whole should Scotland eventually decide to vote No.