The Smith Commission and the Westminster Cartel
In order to understand the Smith Commission Report, the conventional wisdom is that we must first understand the “Vow”, the interventions of Gordon Brown during and after the campaign, and the immediate reaction of the Westminster Government to the apparent threat of defeat in the Referendum. Take a step back; we should, rather contemplate the nature and purpose of the organisation set up to fight independence in the Referendum, because the existence of Better Together (which, at a stroke, has inadvertently almost destroyed the last decaying pretensions of the Labour Party to be an authentic mass movement in Scotland) tells us much, much more about the political forces actually at play in the Smith Commission; and that ensured the character of the Report that it would inevitably produce. It is, whatever is claimed for Smith in mainstream ploitics; for everyone else, back to the drawing-board.
Better Together was essentially a front-organisation for what I will term the Westminster Cartel. What do I mean by the Westminster Cartel? I mean the operation of a political ‘price-fixing’ operation that serves the interests of it members (the principal political parties represented in, and which are principal beneficiaries of, the current Westminster Parliamentary system) and that presents to the public the appearance of being in competition to serve the political interests of the people, when in fact there is no substantive competition between the Parties to serve the politics of the people, but a real and broad agreement within the Cartel to preserve the primacy of the interests of the political parties.
In order to understand the idea of the Westminster Cartel, which I have simplified and represented in stark primary colours here, the source for the concept is Katz and Mair (1992, 1995 and 2000), in what has become known as ‘The Cartel Party Thesis’. In their restatement of this seminal thesis in 2000, Katz and Mair usefully defined the concept:
“political parties increasingly function like cartels, employing the resources of the state to limit political competition and ensure their own electoral success”.
It is important to note that Katz and Mair’s thesis is not simply a purely theoretical model, or a speculative hypothesis; but arises from research and the analysis of data from the operation of modern political parties across the political spectrum, and across the world. In its restatement in 2000 the Cartel Thesis arises out of the data rather more than it is a search for verification of a hypothesis. Notably a key element missing in the original 1992 research was the effect of globalisation on political parties, and its perhaps unexpected collorary: a threefold transformation in politics, driven by the collapse of the left-right ideological divide after 1989; a transfer of power to a technocratic, non-partizan EU, and a general loss of power over inflation and employment by national governments; which together may be characterised as illustrating the phenomenon of “depoliticization”. This threefold transformation opened a new avenue for political parties to develop a new form of political action in order to retain power: “Collusion”.
The Smith Commission was a public invitation for political parties to find common purpose; but from the critical perspective of the vested interests of the institution actually under threat, through Smith, of losing both power and influence; Westminster (and itherfore also the threat to Westminster’s key political beneficiaries, the parties); it was thus an invitation principally to collusion between the Westminster parties. Not surprisingly those parties not representing the Westminster Cartel (SNP, Greens) and which participated and agreed to the Smith Report findings, came out immediately thereafter with criticisms of the agreement. They have been widely criticised for this by the mainstream media (which incidentally are the principal communication organs that serve the interests of the Cartel). The Westminster Cartel thus objected to this critical response by signatories; but notably Lord Smith has made it clear (BBC Radio Scotland, 30th November, 2014) that he found nothing problematic in the SNP or Greens first signing up, but then in their post-Report response, being highly criticial of the extent of powers ceded.
More important is the stange case of what was actiually agreed in Smith, who agreed it, and when it was agreed. Gary Gibbons (Channel 4 News) claimed that:
“The Smith Commission thought it had agreement on powers for much more flexibility on Universal Credit in Scotland. Then, late in the day, Whitehall started a push-back.
At Tuesday’s cabinet, when Alistair Carmichael read out the plans taking shape at the Smith Commission table, one after another English Tory cabinet ministers challenged the plans and their implications for their brief and their department…. …. The draft conclusions were diluted in the last 48 hours much to the irritation of the Smith Commission members. “There was panic” in Whitehall according to one Smith Commission source” (Gary Gibbon Blog, 27th November 2014).
The Tory ministers who were said to object included Osborne, May, Javid, and Smith. This does not appear to be the view of Adam Tompkins (who was a Conservative member of Smith) about what happened within the Smith Commission hothouse (BBC Radio Scotland, 29th November, 2014). The Sunday Herald (30th November, 2014), has however also suggested that the Smith Commission was “rewritten at 11th hour”. There were also some reports of “leaked drafts” of the Smith Commission containing wider powers. Given the current political circumstances immediately post-Smith, this degree of confusion is profoundly unsatisfactory. There is a real need for the facts to be presented and the process to be open to scrutiny. The sensbilities or embarrassment of political parties are not a matter of the National Interest, or a special entitlement to privacy. Their ‘right’ to privacy is, indeed part of the very matter at stake.
Let us turn from the uncertainties to the certainties. What we have in Smith is a series of random, haphazard, ad-hoc transfers of powers on (for example) income tax, with very little attempt to construct a connected, coherent and manageable system for the efficient govenrment of Scotland (still less a system that serves the economic or welfare aspirations of the Scottish people). The Income Tax powers, for example are isolated and in political terms, probably almost unusable; that, after all is their purpose. The powers over Income Tax serve only to play back into the banalities of Westminster political ideology; providing opportunites for the hapless ‘knockabout’ debates between Labour and Conservative that are reduced to ‘tax the rich’ versus ‘ruin enterprise’; all in order to suck the Scottish government into agonising over the same old, pointless Westminster political guff.
How do we list the haphazard, potentially counter-productive nature of Smith? Simple. Just write down a list of reserved powers to Westminster, post-Smith. This is the real list of things that matter – “business as usual” in Westminster. Below is the list of powers drawn up by Smith that will remain reserved to Westminster after Smith is implemented in full (and Smith does not even attempt comprehensively to list all Westminster’s reserved powers): nevertheless, it is quite a list, and it explains in part why the Smith Report runs to 28 pages: for it needed 28 pages only to explain just how little was being transferred. I have of course excluded the obvious broad fields of Foreign Affairs and Defence, which had no prospect of transfer within the current terms of reference:
Reserved to Westminster after Smith is implenented:
- All aspects of the state pension are reserved
- Universal Credit (UC), save for “administrative power to change the frequency of UC payments“ and “the power to vary the housing cost elements of UC, including varying the under-occupancy charge and local housing allowance rates” is reserved
- “Conditionality” and sanctions within UC are reserved
- Bereavement Allowance, Bereavement Payment, Child Benefit, Guardian’s Allowance, Maternity Allowance, Statutory Maternity Pay, Statutory
- Sick Pay and Widowed Parent’s Allowance are all reserved
- The National Minimum Wage is reserved
- The Equality Act (2010) is reserved
- Access to all benefits delivered by DWP, Jobcentre Plus are reserved
Responsibility for ”designing and implementing” supplier obligations with regard to Energy Efficiency and Fuel Poverty is devolved; but setting “the way the money is raised” is reserved
- The Special Immigration Appeals Commission and the Proscribed Organisations Appeals Commission are reserved (and Para. 63, Tribunals also reserved: “the laws providing for the underlying reserved substantive rights and duties”)
- Other than rates and thresholds of Income Tax, all other aspects of Income Tax are reserved
- Other than the VAT receipts raised in Scotland by the first 10 percentage points of the standard rate of VAT which will be assigned to the Scottish Government’s budget, all other aspects of VAT are reserved
- The licensing of offshore oil and gas extraction is reserved
- All aspects of Fuel Duty and Excise Duties are reserved
- In pursuit of managing UK economic ‘risk’, the UK Parliament the power to levy an additional UK-wide tax “in the UK national interest” is reserved.
- The “health and safety legislative framework” is reserved
- All aspects of Corporation Tax are reserved
- All aspects of Inheritance Tax and Capital Gains Tax are reserved
- All aspects of National Insurance Contributions are reserved
- All aspects of the taxation of oil and gas receipts are reserved
- All aspects of Fuel Duty and Excise Duties are reserved
- The Block Grant, operated through the Barnett Formula, is reserved
- The devolution of xenotransplantation; embryology, surrogacy and genetics; medicines, medical supplies and poisons and welfare foods are reserved (but should be subject to “without prejudice” discussions)
Smith, in short, has failed. I rest Scotland’s case.