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Today’s Smith Commission report, which – among other recommendations – calls for the partial devolution of income tax and VAT to the Scottish Parliament, alongside increased control of employment support, transport, energy and welfare policy, represents a significant development in the history of the Union, and the strongest sign yet that Westminster is willing to surrender some of its long-standing control over the UK’s funding and governance.
But, like the Referendum that gave rise to it, the Commission’s findings will also have far-reaching implications for the broader devolution agenda across the rest of the UK. Firstly, because it sets new precedents about the raising and spending of taxes across the UK, explicitly acknowledging how fundamental this kind of power is to delivering public services and supporting economic growth. And secondly, because – while not a formal proposal on behalf of the Commission – Lord Smith’s foreword explicitly recommends pushing devolution down further, not just to Holyrood, but to communities across Scotland.
The need for devolution beyond Holyrood is most obviously illustrated when considering the very different circumstances of Scotland’s cities, compared with the rest of the predominantly rural country. Cities such as Glasgow, Aberdeen and Edinburgh are separately and collectively vital to the future of both the Scottish and UK economies – and they all have specific needs, challenges and opportunities which can only be addressed through targeted investments and intervention. A one-size-fits-all approach, driven by a centralised Parliament in Holyrood, is not going to help Scotland’s diverse and dynamic cities to grow their economies and improve the wellbeing of their residents, and the wealth of Scotland and the UK.
Conversations in the coming days will inevitably turn to the implications of such proposals on the governance of the rest of the UK – particularly in England, where MPs on all sides of politics, with varying motivations, are beginning to ask the big, structural questions. Taking the lead from Lord Smith, parties must look beyond answering the National Question, to addressing the Cities Question – recognising that there remains an overwhelming economic imperative to push power and funding out of Whitehall, to England’s cities and city-regions.
We have seen some recent progress in Greater Manchester. But there is still much to be done to ensure that the model on the table for Greater Manchester doesn’t represent the end of the English devolution debate; in many ways, it’s just the beginning. Critically, the next phase must involve giving cities greater control over how money is raised and spent in their communities – so that they can provide the houses, buses and schools they need now and in the future.
The fact remains that it is only through liberating and supporting our cities – whether in England, Scotland or Wales – that we will be able to deliver jobs, public services and quality of life for people wherever they live across the United Kingdom.
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