Flying the unionist flag

It has become a commonplace that, after the 2014 independence referendum, the nationalists lost but behaved like winners while the unionists won but behaved like losers.

Certainly, unionism’s traditional self-confidence in its capacity for the political  management of Scotland was badly shaken. Some critics said ‘we told you so’, that devolution would inevitably eclipse the British state in Scotland and lead to independence. Others, having come to terms with devolution after 1999, sought to fight back with a more muscular and active neo-unionism. Accepting that the fear tactics of 2014 had not worked, they looked for a more positive message, showing what the UK does for Scotland.

The devolution settlement had left the Scottish Parliament and Government in charge of large swathes of public spending, almost all financed by the block allocation from Westminster through the Barnett Formula. Unionists could argue that Scotland got a disproportionate share of spending, but that only provoked the English and (especially) the Welsh without necessarily convincing Scots. It was the Scottish Government, moreover, that got to spend on the most visible and gratifying things like hospitals, schools and roads. Much of what the UK spent in Scotland was invisible, like defence, or went to individuals rather than ‘Scotland’ as a whole.

Sharing union?

Unionist politicians, especially on the centre-left, argued that the UK was a ‘sharing union’, in which spending was based on need.  This might have underpinned an ideology of social citizenship but that concept had been undermined over the years as welfare has been stigmatised. Ideas of social citizenship gave way to older visions of the deserving and undeserving poor, dividing society into ‘skivers and strivers’. Solidarity was replaced by a more punitive welfare regime. It is striking that unionist politicians have not chosen to laud Universal Credit as a symbol of social citizenship but have instead focused on the National Health Service, which is actually devolved and organized on rather different principles in the four nations.

Traditional unionism put a lot of weight on regional development policies which, from the 1950s, had diverted investment into Scotland, Wales and northern England. There was a commitment to what the European Union calls ‘territorial cohesion’. By the 1980s, regional policy spending had fallen by some 90 per cent from its peak. In 1999 the policy was devolved to Scotland and Wales.

It also rankled unionists that surveys have consistently shown that citizens tend to credit the Scottish Government with policies they think have gone well and blame Westminster for those that have not, irrespective of which is actually responsible for a given field.

Canada leads

Faced with a similar problem after the Quebec independence referendum of 1995, the Canadian Government embarked on a systematic programme of raising its profile there. Maple Leaf flags were to be displayed prominently and federal government spending was to be highlighted. Whether the federal government can spend in matters of provincial competence has long been a sore point, especially in Quebec, but the Canadian government pushed at the limits. If it could not spend on university teaching it can and did spend on research.  Canada Research chairs were set up across the country. Not to be outdone, the Quebec Government set up its own equivalent, allowing Quebec-based academics double the opportunities. Federal funding was gradually extended to local government, which previously dealt only with the provincial level.

The UK Government has followed a similar path since 2014. City Deals originated as a programme in England to finance urban development, ostensibly bringing together the various departments of central government with local governments. Additional funding was promised. Conditions were imposed, including reorganisation of local government and the election of metro mayors, who could deal directly with the centre, while being unencumbered by directly-elected councils. While this was presented as part of a ‘devolution’ agenda for England, it might equally be seen as an effort to co-opt local city leaders to a centralised strategy in return for small amounts of resources.

The City Deal in Scotland came from an approach from Glasgow City Council to the UK Government around the time of the independence referendum. The Scottish Government then came on board and eventually the programme was rolled out for the whole of Scotland. They also extend to Wales and Northern Ireland. City deals allowed  UK Government spend in projects that mixed reserved and devolved matters. As the Scottish and local governments also contribute, this also diverted some of their funding to the deals; this is known as ‘leverage’.  While initially, the UK Government share was tied to reserved competences, this was gradually relaxed so that the UK could take credit for such specific local goods as the refurbishment of the city hall in Perth. One might ask whether this should really be the business of civil servants and ministers in either London or Edinburgh. This must be seen more as a political strategy than a cohesion policy as the amounts of money involved are very small and there is the danger that these ad hoc projects may cut across local priorities.

Big deal for cities?

It is claimed that money going into the deals is ‘additional’ to what the devolved governments get through the block grant and, at local level, to what local authorities receive from the devolved administrations. There is something disingenuous about this claim, though. If all parts of the UK benefit from such deals, it is merely a different way of distributing available resources. Headline figures can look generous, especially if expressed as the total over periods of up to ten years.

In practice, the amounts of money involved are very small compared with the existing spending of the devolved administration. By 2019, the UK Government had committed £1.4bn to Scottish deals over ten years, which represents less than 0.02 per cent of public spending in Scotland over ten years at current rates. This is not going to make a significant difference to economic growth.

Another spending initiative is the proposed Shared Prosperity Fund to replace moneys previously provided by the EU structural funds. The latter were used by the EU as an instrument of territorial cohesion but also for building support for Europe, with care given to publicise the provenance of the money. The devolved governments were obliged to provide matching funding and work within broad European guidelines.

It appears that the Shared Prosperity Fund will be controlled by the UK Government and aim at central priorities. It will be linked to the ‘leveling up’ agenda, which is aimed at areas of northern England where the Conservatives made electoral gains in 2019 but also Scotland and Wales.  The sums involved, however, will not be on anything like the scale of the regional programmes of the past.

The Internal Market Bill currently before Parliament also includes new powers for UK ministers to spend in devolved fields. This presumably includes the Shared Prosperity Fund, allowing it to be used for devolved matters but could potentially extend further.

UK hub

The UK presence has also been enhanced with the establishment of UK Government Hubs in the devolved territories as well as English regions. One brings together in central Edinburgh the territorial offices of UK departments with the Office for the Secretary of State for Scotland, previously known as the Scotland Office and housed in a small building in the west end of the city. 

Covid has focused attention on the First Minister as the figure leading the response in Scotland. In practice, responsibility is divided between the two governments, with the UK having the main economic levers and the Scottish Government having primary responsibility for public health. Indeed, it is more complex than that, with responsibility for testing and other matters also divided. Once again, the UK Government has sought to gain some credit, taking out advertisements in Scottish newspapers to boast about its contribution.

In some ways, this all harks back to pre-devolution modes of territorial management, with the UK Government keen to be seen and to spend across the nations and regions. The difference is that it is now competing with devolved governments. The political incentives to compete are clear; whether it makes for good government is another matter. The original devolution settlement divided competences in a fairly clear manner, with the UK Government limited to a list of reserved matters.

If it is to intervene actively with a plethora of small spending initiatives, conditional on the Scottish Government providing matching funds, there is a risk of distorted priorities, waste and incoherence. A policy paper on devolution, setting out the Conservative Government’s philosophy and proposals, has been expected for some months. It seems that it might never now appear.

It is not clear how well this visible unionism will work in Scotland. Citizens do not make fine distinctions as to which government is responsible for which item of spending. The prominence given to EU investment projects did not stop industrial Wales and northern regions of England voting for Brexit. As the debate over independence resumes, however, we will see more competition between the UK and Scottish governments for ownership of spending initiatives and over visibility.

Further reading: Gongs, flegs and symbols, Mike Small, Bella Caledonia,  We need a new progressive national story, Katy Shaw, New Statesman, James Forsyth, Can Johnson save the Union?, Spectator

The author’s State and Nation in the United Kingdom: The Fractured Union will be published by OUP in March 2021