The new shape of Britain?

Devolution for Scotland and Wales may mean a mess in England - and a cr isis for Labour. By Stephen Castle

WHEN James Callaghan's government was fighting to get Scottish devolution through the Commons in the 1970s, one old Etonian backbench MP voted more than 100 times against the legislation, once at 5.45 in the morning. Not surprising, one might thin k, except that the MP in question was no Tory knight of the shires, but a Labour MP from Scotland itself, Tam Dalyell.

Mr Dalyell is not exactly in the party's mainstream, but when he wages a campaign, he invariably has a point. On devolution that point was expressed memorably in his famous "West Lothian question", (named after his constituency). Why, the question ran, should a Scottish MP at Westminster have no influence over, say, Scottish education (because such concerns would have been devolved to an Edinburgh parliament), and yet still be able to vote on English education?

This point was so important that it "cannot be made too often", he insisted in the Commons back in 1978, and from the front bench the slightly tetchy voice of John Smith, the future leader of the party, was heard to reply: "Yes it can."

Later this month, after a long, self-imposed silence on devolution, Mr Dalyell will tell Labour activists in Leicestershire why he believes his party's plan for a Scottish parliament "has not been thought through". The options, he argues, are staying part of the Union or outright independence. "A halfway house is not stable; it is one thing or another."

His speech will mark more than the return of a ghost from the Callaghan era. It comes as John Major is denouncing Labour's plans as "one of the most dangerous propositions that has ever been put before the British nation". Raising the issue will highlight the implications of Scottish home rule both north of the border and south of it, for Labour is planning a new tier of regional government for the whole country. And, since the Scottish population is over-generously represented at Westminster, talk of an Edinburgh parliament is bound to increase pressure for a reduction of their seats in London. Many of these are safe Labour seats. Could Tony Blair's party be on the verge of committing electoral suicide?

THE HISTORY of Scottish devolution has made turncoats of most of the biggest political players. Even Mr Dalyell has some form, having backed an assembly in 1974 before he had read his government's White Paper. The more significant conversion, however, isthat of the Conservative Party, once backers of devolution, now the English nationalist defender of the Union. In June 1967, after a Scottish Nationalist Party victory in the Hamilton by-election, Edward Heath set up a working group to examine government in Scotland, and the following May he accepted the idea of an assembly. The Conservative manifestos for both 1974 and 1979 committed the party to an assembly. Margaret Thatcher, however, changed all that, and in the process provoked the resignation ofsix members of the front bench in 1976, among them Malcolm Rifkind.

Labour, too, has had an uncomfortable ride to its support for a Scottish parliament. In 1969 Harold Wilson set up a Royal Commission which, four years later, recommended a Scottish assembly. But when the issue went to a referendum in 1979 several key figures in the party, including Robin Cook and Brian Wilson, took leading parts in the campaign against. Neil Kinnock came to prominence by arguing, successfully, against a Welsh assembly.

In Scotland, at least, the times have changed. Now, with the exception of Mr Dalyell, the Scottish Labour Party is solidly behind the establishment of an Edinburgh parliament, complete with a "premier" or "chief executive" and powers to raise taxes by upto 3p in the pound. In 1979 only 32.9 per cent of the electorate voted for a parliament; recent polls indicate that more than 80 per cent want change - an ICM poll last year showed 44 per cent backing a devolve parliament and 38 per cent backing independence. Put simply, Labour has no option but to go into the election committed to home rule.

How has this happened? Margaret Thatcher's 11 years in power transformed the Scottish political scene. Menzies Campbell, Liberal Democrat MP for Fife North East, argues: "Mrs Thatcher was the best recruiting sergeant for the home rule movement because she was so stridently out of tune with Scottish opinion. She was also, to many Scots, the archetypal English nationalist." Labour's Brian Wilson, now a supporter of a Scottish parliament, agrees that the biggest change since 1979 "is the gulf which emergedbetween the party of government and its standing in Scotland. That is a new phenomenon which cannot be sustained indefinitely".

It was not the first time in modern history that Whitehall has been out of kilter with the mood north of the border, but on this occasion, the Tories, and Mrs Thatcher in particular, did not seem to care. For example, when in 1985 colleagues persuaded Mrs Thatcher to bring in the poll tax a year earlier in Scotland than in England, the Conservatives confirmed in one single act all the worst suspicions and prejudices of Scottish people about English government.

There were other changes - including new perceptions of Europe - that helped push the tide away from the Tories and towards home rule. The SNP leader, Alex Salmond, dates his party's improving poll position to its decision to turn away from Euroscepticism and embrace the Common Market. Mr Salmond says: "In the 1960s and 1970s it was easy to present independence as a retrograde, isolationist step. In the context of Europe it becomes a forward-looking, progressive programme." If Ireland, Luxem- bourg and Belgium can go it alone, why not Scotland?

Labour also believes that Europe has played a vital role in changing thinking over the past 15 years, although it prefers to point to examples of highly devolved government in European regions, such as Catalonia in Spain, which has a powerful regional government. One senior Labour source believes that the concept of a Europe of the regions, providing Scotland with wider commercial and employment horizons than those offered by the Union, struck a chord "among opinion formers, if not in the pubs and on the buses".

In the meantime, the nationalists took advantage of growing evidence of the weakening of other props of the Union as the Thatcherite ethos gripped England. Mr Salmond, educated in the windswept collegiate grandeur of St Andrews (which also gave us the Adam Smith Institute), wonders where all his "pleasant, liberal" English contemporaries went to. And he adds: "The death of the English middle classes continues. England seems a less attractive, less tolerant place, it also appears less safe, economically and socially. Meanwhile, Parliament is in disrepute, the monarchy is in disrepute, and even the Scottish regiments are down to 4,500 men. The pillars that formed part of the devil's bargain under which most people's forebears stuck with the Union are no longer there."

THESE sentiments, and the dislocation caused by Conservative rule in Scotland, might have made John Major wary of raising the stakes on devolution. In fact the reverse is the case. His close allies insist that the Prime Minister is genuinely passionate about the Union, bolstered by some success on the issue in the last general election campaign. True, Mr Major's unionism has been weakened by the peace process in Northern Ireland, but devolution, unlike many issues that dominate the public agenda, is also one matter on which the Conservative Party happens to be united. The Conservative vote north of the border is so eroded that an appeal to the hardline unionists in Scotland makes perfect political sense. Put brutally, Conservat ives and nationalists have found common cause in presenting the options as either the Union or complete independence.

In this the two parties have been helped by one particular newspaper, the traditionally Conservative Sun. Before the last election, the then editor, Kelvin MacKenzie, and the paper's Scottish editor became convinced of the case for lining up the ScottishSun behind the SNP. Because of the sensitivity of the decision, Rupert Murdoch was consulted at a meeting in the newspaper group's Wapping headquarters. By one account, as soon as his consent was given, the Australian newspaper magnate found himself being entertained by two kilted bagpipers who burst into the meeting room.

Whether commercially or politically motivated, the new relationship between paper and party has helped to focus the debate in the way the Tories want: independence versus the Union. Mr Wilson argues: "What is offensive about Major's attempts to crank this up is his willingness to polarise the debate between the status quo and separatism, the two least popular options."

A week ago Mr Major launched his bitter offensive against Labour's plans, which he had already characterised as "teenage madness". Last Tuesday, Jim Sillars, the former SNP MP, began his column in the Scottish Sun: "Pure, dead, brilliant. That's my delighted reaction to John Major's attack on Labour's devolution scheme."

IF A constitutional debate on such terms suits the Tories it has many hazards for Labour. Most dangerous of these is the likelihood of provoking demands for a reduction in Scotland's representation at Westminster, which could instantly eliminate any Labour majority. On average, Scottish constituencies have fewer than 55,000 voters, compared with 69,000 in England. There are 72 of them, and 49 returned Labour members in 1992.

The case for reduced Westminster representation has been accepted by the Liberal Democrats. Mr Campbell says: "If you have a Scottish parliament with responsibility for Scotland's own domestic affairs then you cannot justify 72 MPs going from Scotland toWestminster. The sooner that is recognised, the better."

Other complications abound. Under the plans Labour has so far agreed, the additional-member system would be used to elect the Edinburgh parliament, not the first-past-the-post system used for Westminster. That raises questions about wider electoral reform, an issue on which Labour is already committed to offering a referendum. If it is good enough for Scotland, why not for the rest of the United Kingdom? The tax-raising powers of the proposed Scottish parliament also give the Tories an opening to argue that Labour will cost Scottish taxpayers more. And Labour MPs from the north of England are worried about the extra resources that might go into industrial development just over the border.

But the bigger question, the question to which, as one member of the shadow cabinet puts it, "you return from every direction'', is Mr Dalyell's. How could it be right for Scottish MPs at Westminster to vote on purely English matters?

The man charged with finding a workable answer is Jack Straw, Labour's home affairs spokesman, who chairs the party's Democracy Commission. His preferred path is known: he wants to extend regional government to England. That way the Scottish MP would notfind himself voting on a purely English matter, because purely English matters would be dealt with by English regional authorities. Labour's thinking on this matter is still in embryonic form, because Labour policy has been driven by the perceived needsof Scotland rather than by any demand for regional autonomy in England.

Mr Straw's first instinct with regional government was to proceed cautiously, creating a structure into which the English regions could opt if they wished. Recently thinking has changed. Mr Straw now plans a tier of government for England, based on the 10 regions that are served by the Government's "integrated offices", bringing together the regional operations of the departments of the Environment, Employment, Transport, and Trade and Industry. These offices are distributed as follows: Manchest er for the north-west, Leeds for Yorkshire and Humberside, Newcastle for the North-east, Nottingham for the East Midlands, Birmingham for the West Midlands, Liverpool for Merseyside, Cambridge and Bedford for the Eastern region, Bristol and Plymouth for the South-west, and, finally, separate regions for the South-east and London, both based in the capital. These offices administer the urban regeneration budget as well as serving as a one-stop shop for employers in fields such as education and skills tra ining.Labour might bring quangos and other unaccountable bodies under the new regional authorities.

This new Labour policy, designed both to confound the West Lothian doubters and take advantage of public anxiety over quangos, will be made public in a paper prepared by the environment spokesman, Frank Dobson, and due to be presented to Labour's local government conference next month. The document, "Renewing Democracy, Rebuilding Communities", will commit the party to unitary local authorities and regional government. Although it gives no details, the latest draft put the case thus: "Labour believes th at, in parallel with a parliament in Scotland and an assembly in Wales, we should provide for an elected authority for each English region. These would give the people living there the power to influence strategic decisions in their regions, and to take over the functions of the present unelected tier of regional government established in the central government regional offices. We are consulting separately on our proposals for elected regional government."

This, however, does not address the possibility that many English regions may not want their own assemblies. Here Mr Straw plans to overcome the problem by allowing the local authorities to appoint already elected councillors to sit on the regional body.In this way the Opposition escapes the worst aspects of the West Lothian question. Regional government in England would reduce the pressure for Scotland to send fewer MPs to Westminster, while those parts of England uninterested in regional government would have an inexpensive get-out.

Will this constitutional fudge work? Labour believes the British public to be profoundly dissatisfied with its quality of government. Gordon Brown is promising a "bonfire of the quangos" under a Labour government. But in England Labour leaders would havea lot of work to do before they could establish in the public mind a link between dissatisfaction with quangos and a need for regional government. One senior Labour figure said last week that many MPs would prefer stronger local government.

IT IS, however, the Scottish issue that will dominate the debate. The week before Christmas Mr Blair held an ad hoc brainstorming session in his office at the House of Commons. The conversation among the senior shadow cabinet colleagues, including the deputy leader, John Prescott, and two Scots, the shadow chancellor, Gordon Brown, and Robin Cook, foreign affairs spokesman, soon turned to devolution. When the anticipated Tory offensive on the issue came, Mr Blair argued, Labour should strike back hard, arguing that it was the Tories who were threatening the Union by straining Scotland's patience.

The first evidence of this strategy was due today, with Mr Major expected to appear on Breakfast with Frost. Labour has organised a pre-emptive strike in two Tory Sunday newspapers in which Mr Blair and Mr Cook will use signed articles to argue that a reformed constitution will produce a strengthened Union.

Few on Labour's front bench expect to get an easy ride up to the election and beyond. Senior figures such as George Robertson, the Scottish spokesman, recognise that devolution will produce anomalies but argues that other European nations live with them.This, however, is unlikely to satisfy the Tories or advocates of the West Lothian question. Mr Robertson is already examining ways by which a Bill to establish a Scottish parliament could avoid the usual route for constitutional Bills of debate on the floor of the House. Such a debate or debates could paralyse the first year of a Labour government. And, on this particular Bill, the Labour whips should not be counting on the help of the MP for Linlithgow, Tam Dalyell.

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