“We won the war but managed to lose the peace,” one senior Labour MP said today. Labour’s collective sigh of relief when Scots voted against independence in the September referendum must have been one of the most short-lived sighs in history.
Barely an hour after the result, David Cameron announced that the “vow” by the three main Westminster parties for further devolution for Scotland, would mean “English votes for English laws” – with Scottish MPs losing their right to vote for legislation affecting England only.
Today’s proposals from the cross-party Smith Commission, on implementing the “devo-more” pledge, give Mr Cameron another bite at the cherry. He will unveil plans for “English votes for English laws” before Christmas. They will have huge implications for Labour. As the Holyrood Parliament gets control of income tax rates and bands, as all the parties now agree, the Conservatives will argue, Scottish MPs should not vote on income tax changes at Westminster.
Scottish independence: Referendum results in pictures
Scottish independence: Referendum results in pictures
Chief Counting Officer Mary Pitcaithly on stage at the Highland Hall at the Royal Highland Centre with the final result of the Scottish Independence Referendum
Pro-union supporters celebrate as Scottish independence referendum results come in at a 'Better Together' event in Glasgow
A pro-independence supporter is pictured in George Square in Glasgow, following a defeat in the referendum on Scottish independence
Pro-independence supporters console each other in George Square in Glasgow
A pro-independence supporter is pictured in George Square in Glasgow
A disappointed 'Yes' campaigners reacting to Scotland's decision to stay in the union with a David Cameron mask at George Square in Glasgow
A dejected 'Yes' supporter in Edinburgh makes his way home in the early hours after Scotland voted decisively to reject independence and remain part of the Union
NO supporters celebrate at the Royal Highland Centre, Edinburgh as the final results of the Scottish independence referendum are announced
No supporters celebrate their win over the Yes campaign at the Royal Highland centre during the Scottish referendum in Edinburgh
No supporters for the Scottish independence referendum celebrate a result at a No campaign event at a hotel in Glasgow
Pro-union supporters dance in celebration during a 'Better Together' referendum event in Glasgow
Anti-independence supporters react to an early strong result for the "Better Together" campaign at the Royal Highland Centre counting hall in Edinburgh
NO ballots are stacked on a table during the Scottish independence referendum count at the Royal Highland Centre in Edinburgh
Ballots arrive to be counted at the Aberdeen Exhibition and Conference Centre during the Scottish referendum in Aberdeen
Ballot boxes arrive at the Highland Hall at the Royal Highland Centre in Edinburgh after polls closed in the Scottish independence referendum
For this raises the nightmare prospect for the party of a Labour Chancellor unable to get their own Budget approved by the Commons. Labour won 41 of the 59 Scottish seats at the 2010 general election.
So Labour initially opposed Conservative and Liberal Democrat proposals for control of income tax to be devolved to the Edinburgh parliament. Gordon Brown saw the move as a “Tory trap” because of the potential knock-on effect at Westminster.
Why, then, has Labour endorsed the Smith Commission’s proposal for Holyrood to set income tax rates and bands? The Scottish political landscape has changed dramatically since the referendum. The losers, the Scottish National Party, are on a roll, retaining many of the Labour supporters they recruited to the independence cause. SNP support has soared to between 43 and 52 per cent, while Labour has slumped to 26 to 28 per cent. If repeated at next May’s general election, Labour could be left with a handful of seats north of the border, wrecking Ed Miliband’s chances of becoming prime minister.
Yet if Labour had rejected devolving income tax to Scotland, the SNP would have accused it of breaking the “vow” by the three Westminster party leaders, potentially driving even more Labour supporters into the SNP’s arms.
So despite the doubts of Mr Brown; Alistair Darling, the former Chancellor and Ed Balls, the shadow Chancellor, Mr Miliband chose the lesser of two evils and backed the transfer of income tax powers. “We could not afford to be the blocker,” one Labour insider admitted.
In public, Labour denies its significant U-turn was prompted by self-interest – and its own general election prospects. Labour insists it is recognising the will of the Scottish people, who voted for more power but to remain within the UK.
Labour will argue that preventing Scottish MPs voting on income tax in the Commons would lead to two classes of MP and ultimately put the Union at risk, as it could result in “two prime ministers” north and south of the border.
Time will tell whether the Smith Commission’s step towards a federal system will save the Union or destroy it.
When a reluctant Tony Blair was persuaded to set up the Scottish Parliament in 1999, he was advised that it would kill demands for full independence forever. Those who hope the Smith Commission’s proposals will end the independence debate will be disappointed too. The No vote in September was not the end of the matter, only the end of the beginning.Reuse content