REPORT Union at the Crossroads Can the British state handle the challenges of devolution? Michael Kenny Philip Rycroft Jack Sheldon About the Authors Michael Kenny is Professor of Public Policy and Director of the Bennett Institute for Public Policy, University of Cambridge. Philip Rycroft is a former Permanent Secretary at the Department for Exiting the European Union (2017-2019). From 2015 to 2019 he was head of the UK Governance Group in the Cabinet Office. He is a Senior Distinguished Visiting Fellow at the Department of Politics and International Studies and the Bennett Institute at the University of Cambridge. Jack Sheldon is an ESRC-funded PhD candidate in the Department of Politics and International Studies at the University of Cambridge. Before becoming a full-time PhD, he worked for five years as a researcher on British constitutional politics. Union at the Crossroads: can the British state handle the challenges of devolution? Table of Contents Introduction ............................................................................................... 4 The British state and the devolved Union – a historical overview ..................... 9 The early years of devolution, 1998-2011 .................................................... 9 The Scottish referendum and its aftermath, 2011-16 ..................................14 The Union under pressure, 2016-20 ........................................................ 24 Reinventing the centre ...............................................................................37 3 Union at the Crossroads: can the British state handle the challenges of devolution? of the global coronavirus pandemic. This too Introduction has had major repercussions for the frayed relationships between the central and devolved governments, but for different reasons. In The future of the UK is increasingly in doubt. this instance, all four parts of the UK face the Ever since the vote to leave the European Union same threat, and all have a clear and shared (EU) in June 2016, Britain’s political institutions interest in responding effectively for the good have been wracked by the turbulence triggered of their populations. There is an ongoing by Brexit. The sense of crisis and deep political need to co-operate for a variety of important, division it has generated have spilled out on to administrative reasons. And in this crisis, the question of how the governance of the Union unlike Brexit, the devolved governments works, and what the different peoples within were responsible for some of the major policy this state feel about it. decisions, for example on the nature and extent Given that a majority of voters in two parts of of lockdowns, while their British counterpart this four-part Union voted for the UK to leave was, in key respects, revealed as the government the EU, and the popular majority in the other of England, not Britain. two to remain, Brexit was bound to generate Early unionist hopes that the pandemic might considerable stress for the UK’s territorial bring these governments together, after several constitution. It has in key respects accentuated years of Brexit-fuelled conflict, quickly proved strains within the UK’s system of devolved fanciful. There are various reasons for this – not government that were already evident, and least differing political choices; the perception laid bare some of the power relationships that that, during 2020, the UK government took lie beneath it. Despite the relative speed with a less cautious and prudential path than which the new devolved institutions have these other administrations; and the growing become accepted and legitimate parts of the reluctance of Boris Johnson’s government to UK system since they were introduced by Tony bring the devolved administrations into the Blair’s government in the late 1990s, Brexit has tent of collective decision-making after the first shown that on questions of state-wide interest, phase of lockdown came to an end. there is little to stop the preferences of these being set aside. On these matters the primacy of One further political dynamic in the most the UK government, founded on the sovereignty recent period has undoubtedly also contributed of the UK parliament, remains entrenched. This to the sense that the UK’s territorial constitution revelation has been a key factor in increasing is buffeted by some increasingly powerful support for Scottish independence, while Brexit headwinds. This is the promotion of a more has also reopened some highly challenging assertive and muscular style of unionism by questions about the constitutional future of Johnson and his government, a trend which has Northern Ireland. been some years in the making.1 This ‘hyper- unionist’ style recycles earlier strains of Tory Since February 2020, a new, very different, unionism, harking back to the Conservative crisis has broken upon the UK in the context Party’s positioning as the bulwark of the Union 1 M. Kenny and J. Sheldon, ‘When Planets Collide: The British Conservative Party and the Discordant Goals of Delivering Brexit and Preserving the Domestic Union, 2016-19’, Political Studies online advance access (2020a). 4 Union at the Crossroads: can the British state handle the challenges of devolution? during the Irish Home Rule crises at the turn of As these different factors have forced questions the nineteenth into the twentieth century. But about the future of the UK to the political it has been reconstituted in a very distinctive, surface, calls for root-and-branch reform of contemporary idiom, and is, somewhat the constitutional order have been heard from paradoxically, associated with the priority of various parts of the political spectrum. One achieving a goal – Brexit – which many of its strand of thinking, influential in particular critics see as bound to loosen further the ties within parts of the Labour Party, makes the case that bind the territories of the UK together. for wholesale reform of the UK constitution, including fundamental change to the ways Assertive unionism also reflects a wider in which the relationship between the recoil in the Conservative Party against the governments of the UK is managed. Former perceived weaknesses of the centrifugal model Prime Minister Gordon Brown is a leading of devolution which Labour introduced at the proponent of this idea, which is also supported end of the last century. This has been expressed by the Welsh Government.2 In December in the form of a concerted push to strengthen 2020 the Labour leader, Sir Keir Starmer, the profile and influence of the centre in the announced that the party would run a UK-wide devolved territories, which reflects fears that constitutional commission, advised by Brown.3 the constitutional order of the UK may have Meanwhile, the UK government itself has been compromised by years of incremental expressed some interest in reform of how the devolution under the asymmetrical model centre engages with territorial politics. As one which Labour introduced. It is also an of Theresa May’s final acts as Prime Minister a important part of the intellectual backdrop review of ‘UK Government Union capability’ to the controversial UK Internal Market Act, was commissioned, which was undertaken by a passed by Boris Johnson’s government in former Scotland Office minister and adviser to 2020, which seeks to limit the scope for policy David Cameron during the 2014 independence divergence between the UK’s jurisdictions, and referendum, Lord Dunlop.4 The Dunlop gives UK ministers the power to spend money in review was published in March 2021, along the devolved territories on devolved functions with an update on progress with a separate such as transport and education. The centrality joint review with the devolved governments of this strand of thinking within British of the machinery for intergovernmental government circles has injected a significant relations.5 Dunlop’s recommendations included new destabilising dynamic into the current establishing a new senior cabinet position situation. with responsibility for the constitutional 2 G. Brown, ‘We need a new way to run a truly United Kingdom’, The Guardian, 18 October 2020, https://www.theguardian. com/commentisfree/2020/oct/18/we-need-a-new-way-to-run-a-truly-united-kingdom-gordon-brown, last accessed 5 March 2021; Welsh Government, Reforming our Union: Shared Governance in the UK, October 2019, https://gov.wales/sites/default/files/ publications/2019-10/reforming-our-union-shared-governance-in-the-uk.pdf, last accessed 5 March 2021. 3 E. Chappell and S. Rodgers, ‘Starmer announces Labour launch of UK-wide constitutional commission’, LabourList, 20 December 2020, https://labourlist.org/2020/12/keir-starmer-launches-uk-wide-constitutional-commission/, last accessed 5 March 2021. 4 UK Government, ‘Review of UK Government Union capability: terms of reference’, July 2019, https://www.gov.uk/ government/publications/review-of-uk-government-union-capability-terms-of-reference, last accessed 5 March 2021. 5 M. Gove, ‘Update on UK Government’s Work to Strengthen the Union and Intergovernmental Relations’, House of Commons Written Statement UIN HCWS885, 24 March 2021. 5 Union at the Crossroads: can the British state handle the challenges of devolution? integrity of the United Kingdom, and a new underlying causes of the growing tensions UK Intergovernmental Council to reset between the UK and devolved institutions. relationships between the governments.6 From With extensive devolved powers now in place the perspective of central