FleishmanHillard Scottish Referendum Analysis - All Change for British Politics

It may have been a win (55% to 45%) for the No campaign to maintain the Union. In reality British politics will never be the same again.

If people waking up on Friday morning thought a No vote would mean a return to normality or relative calmness back in Westminster and Whitehall, they are in for a shock. The repercussions of the ‘Devo Max’ promised immediately to Scots after this result will have profound consequences south of the Border. In summary

•  A new settlement for Scotland will be accompanied by a new settlement for all parts of the UK. White Paper on devolution to be published in October and a draft Bill on Burns Night, 25 January
• “The question of English votes for English laws – the so-called West Lothian question -requires a decisive answer.” David Cameron, 19^th September 2014
• Huge issue for the Labour Party concerning an “English majority” of MPs for key proposals
• English “rights” will become a major political theme leading up to the Election – UKIP already seeking to maximize the issue
• Major question mark raised over Scottish or Welsh nationals as Cabinet Ministers for the major Departments of State
• “Wales to be placed at heart of the debate on how to make the UK work for all nations. “David Cameron, 19^th September 2014

A final answer to the West Lothian Question

Demands for a final answer to the West Lothian Question (why Scottish, Welsh or Northern Irish MPs have the same right to vote at Westminster as any English MP now that large areas of policy are devolved to national parliaments and assemblies) will now dominate British politics ahead of the General Election and its impact will be felt in the UK going forward.

Unease at what the three Party Leaders, together with Gordon Brown, have offered in terms of Devo Max has been growing all week. Now that the Union is safe, this unease and debate will spill over into all aspects of politics.

David Cameron this morning has already made clear that he will make good on the commitments made in the referendum campaign and that a White Paper and draft Bill will be introduced imminently.  He has also called for an answer to the West Lothian Question. His hope that “the Labour Party and other parties will contribute”, raises the question of how this could damage Labour’s electoral prospects.

If Ed Miliband were to win the May 2015 General Election, he could well face a situation whereby in practice Labour would not have a parliamentary majority for the passage of domestic English legislation (assuming Scottish, Welsh MPs do not vote on English only issues). This could mean that Miliband would be Prime Minister in name alone and could not even get a Finance Bill through Parliament or his commitment to raise tax to 50% through Parliament. Some assessments have been that 90% of any Labour manifesto commitments would be meaningless under this voting situation. Labour has so far been relatively quiet this morning and will not want to be rushed into something which they see as a potential political trap.

Lib Dem leader Nick Clegg has already supported calls for an answer to the West Lothian based around the findings of the McKay commission, which recommended that English MPs should get a greater, say on English issues, without stopping Scots MPs from casting their vote on new laws.

Impact on the May 2015 General Election

The Westminster opinion polls have been relatively stable over recent weeks with the focus all being on the referendum and generally showing a 3 to 4 point Labour lead.

How backbench MPs respond to the powers given away to save the Union will have a huge impact. Divided parties are often punished in General Elections, especially when there is anger at the Party Leader. As for the Conservatives, backbench disquiet has been building for days and will now spoil over becoming the dominant issue leading to the General Election. It is likely that more and more MPs will break ranks over the issue as many opponents have only been silent due to the desire for the Union to continue. Conservative Whips are currently having initial conversations with their flock regarding the impact of Devo Max and are attempting to garner support for potential next steps, though it is likely they will face a hard task

UKIP Leader Nigel Farage has also been quick off the mark this morning calling for greater rights for English people. With UKIP already on 16% in opinion polls there will be real interest in whether they receive a populist boost as a result.

High profile Westminster MPs in Scotland

It is now clear that the Labour Party will see this as an opportunity to redevelop their support in Scotland and that this will include a number of senior Labour politicians moving back to take leadership positions. Although there has been great speculation over the past 48 hours concerning former Prime Minister Gordon Brown, we understand that this is not going to happen and that Brown is in fact standing again for his Westminster seat.

Gordon Brown’s reputation – tarnished from his time as PM in the economic crisis – will have been resurrected as the saviour of the “No” campaign. His barnstorming speeches in favour of the Union could well have swayed many votes, and has surprised many of all political persuasions Surprisingly Gordon Brown comes out of this as one of the few politicians to have actually really benefitted from the voteto be have benefited.

Jim Murphy MP, the Labour Shadow Cabinet Member has also benefited from the campaign and has been one of the few Westminster politicians to effectively take the fight to the Yes Campaign. He has  announced that he  will seek election to the Scottish Parliament. This could be in the form of a by-election so that he can lead the Scottish Labour Party in the Scottish Parliament Elections in 2016.

A View from Scotland

Devin Scobie, Head of Caledonia Public Affairs, FleishmanHillard’s public affairs partner in Scotland, provides an insight into the Scottish political situation after the vote.

And so it is the morning after the day before.  The people of Scotland have voted – in their millions – and an incredible turnout of over 85%, was the clearest winner.   The opinion polls got it right – almost – and the rejection of separation now creates as many challenges and opportunities as some said independence might.

Former Lib Dem leader David Steel hit the nail on the head when he said ‘Devo Max is now on the ballot paper.’   In the dying days of an increasingly bitter campaign, the three main, pro-union, parties circled the wagons around the SNP-led No camp and came up with a fast-track timetable for more devolved powers to what will become a strengthened Holyrood.

So where now?   The SNP mortgaged their house and then some on a Yes vote.  They did win Glasgow but not by enough.  Alex Salmond has pledged to carry on at least until May 2016, but few believe he’ll survive that long.   And it is difficult to see why their six MPs still matter from a Westminster perspective.  Labour subtly shifted the ‘cross party’ pro-union campaign to a clear Labour campaign for No, Thanks and can expect to be rewarded next May.   The Scottish Tories and Lib Dems fought steady and consistent campaigns, but the former is now an electoral footnote with just one MP and the latter remains in the long shadow of a UK coalition whose leader is frankly toxic in electoral terms.

So the independence issue is settled, hopefully for good.  But the result has just dropped the political equivalent of a hand grenade onto the paddling pool of Scottish politics – and that will be quite a sideshow in the months leading up to the Westminster general election.

Where next for ‘Devo Max’?

In a panicked response to a surge in support for independence all three Party Leaders committed in the closing stages of the campaign to further devolution powers. Furthermore, former Prime Minister Gordon Brown promised that talks on new powers will start the day after the referendum, a deal would be reached by November and draft legislation drawn up by January. The three party leaders have also agreed to retain the Barnett funding formula.

However, it is not clear whether the Party Leaders have the support of their broader parties for these proposals. Earlier in the referendum process each party outlined their different proposals via separate devolution commissions. The Conservative Party’s Strathclyde Commission concluded that the Scottish Parliament should be handed full powers over income tax; should be assigned a share of Scottish VAT receipts; and should be able to supplement UK benefits out of its own budgets. The Scottish Labour Party’s Devolution Commission has backed increased tax-varying powers and control over some elements of welfare and benefits policy, although to a more limited extent than the Conservative Party. MSPs should be able to vary tax by up to 15p, giving them the option of restoring the 50p rate for top earners, and housing benefit should be devolved to Scotland.  Under the Liberal Democrats Devolution Commission Holyrood would raise and spend most of its own taxes and borrow on its own terms, although it proposed that the Barnett formula should be replaced with a “needs-based” arrangement.

Next Steps

Lord Smith of Kelvin has agreed to oversee the process of devolving more powers over tax, spending and welfare to Scotland

1. William Hague to Chair a Cabinet Committee to look at English, Welsh and Northern Ireland MP voting rights with a timetable to match the devo max dialogue. NB the Labour Party is yet to say whether it will cooperate with this.
2. The aftermath will dominate Party Conferences – first up the Labour Conference starting this weekend
3. Gordon Brown outlines his DevoMax timetable to House of Commons on 16^th October 2014
4. Government White Paper in October on Devo Max
5. In January 2015 draft legislation will be published on the DevoMax measures