Memorandum from Professor Vernon Bogdanor, FBA, Professor of Government, Oxford University (30.12.97)

1.The Scotland Bill provides for a division of legislative powers, by which Scotland's domestic affairs will in future be handled by the Scottish Parliament, while responsibility for foreign policy, defence and economic policy will remain with Westminster. This appearance of a clean division of powers is, however, misleading. Policies adopted in Westminster will continue to affect Scotland, even after the establishment of a Scottish Parliament. This is most obviously so with economic policy and the formula for the distribution of grant to Scotland. In practice, therefore, the Scottish Parliament will only work successfully if there is co-operation between London and Edinburgh.

Experience of multi-level systems of government in Western Europe reinforces this conclusion. For a territorial division of powers to work effectively, there must be co-ordination between the different levels of government. In federal states such as Germany and Austria, the need for co-ordination had led to the development of institutions of co-operative federalism, by means of which the different levels of government work together on joint tasks. But the same principle of co-operation operates in non-federal states also.

The main question which arises is whether to secure this co-operation, new institutional machinery is needed and if so what form it should take.

2.On the Continent, there is generally machinery for administrative co-ordination to overcome the rigidities established by the division of powers. In Germany, for example, there are regular Federal /Laender Conferences, and regular conferences also between the Federal Chancellor and the Heads of Government of the Laender - the Minister - presidents and the Governing Mayors of the two city states. In Italy, a non -federal state, there are regular conferences of the Regional Presidents, and formal links between presidents of the five so - called special regions - Valle d´Aosta, Trentino - Alto Adige, Fruili - Venezia Giulia, Sardinia and Sicily - and central government. Indeed, the Presidents have the right to speak in cabinet when issues of importance to their regions are discussed. The President of Sicily is even given a vote in cabinet on maters affecting the region. The regions also have the rights to place bills before the national parliament. These privileges, however, are rarely used, and in practice, as in Germany, the rights of the regions are asserted through negotiation rather than more formal methods.

3.In a number of multi - level systems in Western Europe, co - ordination is assisted by the fact that the upper house of the legislature represents the regions, and enjoys substantial rights in the legislative process.

In Germany, the upper house, the Bundesrat, represents the Governments of the Laender and its consent is required for federal legislation which affects the Laender - currently around 55% of federal legislation. On other matters, the Bundesrat has power to amend legislation or, like the House of Lords, to impose a suspensive veto. In general, however, the Bundesrat prefers to negotiate amendments to legislation rather than live in a state of conflict with the Federal Government or the lower house, the Bundestag.

In Switzerland, the Council of States representing the cantons, has equal powers with the National Council.

In Belgium, the Senate, composed of directly elected, indirectly elected and appointed members from the language areas and communities, has a veto on legislation concerning language matters, the constitution and changes to the Belgian state structure.

These arrangements give the Laender and cantons a considerable input in the making of federal law, in Germany and Switzerland. Federal law, although initiated by the Federal Government in Bonn and the Federal Council in Berne, bears, therefore, the strong imprint of the Laender and cantons.

4.A second way in which co - ordination between different levels may be secured is through the practice of legislators shifting from one layer of government to another. In the United States, for example, state governors frequently seek national political office. Indeed, three of the last four presidents - Clinton, Reagan and Carter - had been state governors before entering the White House. In Germany, the last four chancellors - Kohl, Schmidt, Brandt and Kiesinger - have been Minister - Presidents or Mayors of city states before becoming Chancellor.

In Britain, by contrast, the assumption seems to be that politicians have to decide which of the two layers of government they intend to concentrate on. Speculation concerning which cabinet minister will stand for the post of First Minister in a Scottish administration seems to assume that this is a once - and - for - all decision and that the minister in question would not be able to return to central government at a later date. Why, however, should that be so? Co-operation, moreover, might conceivably be assisted if a dual mandate system were in operation such that some members of the Scottish Parliament might, as MPs, play their part in ensuring that Westminster was aware of problems affecting the relationship between London and Edinburgh.

5.The problem of co-ordination is of particular importance in the area of finance. Western European experience contradicts the view that strong independent taxation powers are essential for a regional government to be effective. Regional taxation powers in Western Europe are in general minimal. The German Laender and the Belgian and Portugese regions have assigned taxes - VAT and income tax, while the Italian regions are financed by specific grants. The system in Spain is perhaps the one which bears the most resemblance to that proposed for Scotland since the autonomous communities in Spain are financed primarily by block grants through a formula which is re-negotiated every five years. It has, however, as with local government finance in Britain, proved difficult to define the concept of 'need' to the satisfaction of all of the autonomous communities. Spanish experience shows the importance of drawing up clear principles to regulate the distribution of the block grant, principles which are clearly understood by all concerned and which can provide the basis for a generally acceptable funding formula.

6.In Britain, of course, Scotland is not represented as such in the House of Lords; and there are, to my knowledge, no proposals from the government that it should be. It is, therefore, for the Select Committee to consider what alternative institutional machinery might be developed to ensure that the voice of the Scottish Parliament is heard effectively in Westminster and Whitehall.

7.One problem with such machinery for co-ordination between different levels of government, is that of accountability. Where there is an inter-governmental layer of decision-making, and decisions are arrived at through a complex process of negotiation, it is often difficult for the ordinary voter to know which level of government is responsible for the final outcome. It is all to easy in such circumstances for each level to offload responsibility onto the other. That happens already in central government/local government relations. The Select Committee might consider how these dangers can be guarded against in the government of Scotland.

8.A further problem which has arisen in multi-level states on the Continent is that of relations with local government. There is some danger in such systems that provincial or regional layers of government seek to establish control over local government. Where that to happen in Scotland, it would contradict the main purpose of devolution which is the dispersal of power, not its centralisation. In Germany, in two Laender, county executives are appointed by the Laender themselves. In North Rhine Westphalia, teachers are appointed through a single Land office. In Catalonia, the government of the autonomous community attempted to abolish local government entirely.

There needs, therefore, to be a clear division of authority between different layers of government, with guaranteed funding and protection for local government. Many of the functions of the Scottish Parliament, after all, involve legislating for services delivered by local authorities in Scotland. In Wales, where a different model of devolution is proposed, clause 110 of the Government of Wales Bill, requires the Welsh Assembly to establish a Partnership Council for Wales with members of Welsh local authorities. No doubt this Council will seek to draw up conventions regulating the respective spheres of the Assembly and local authorities in Wales.

Perhaps a similar Partnership Council in Scotland might prove of value in ensuring that devolution leads to a genuine dispersal of power and not to its centralisation in Edinburgh.

9.Much ink has been spilt over the West Lothian question. Yet Continental multi-level systems seem to operate perfectly happily with asymmetrical devolution. In Italy the five special regions which have greater powers than the ordinary regions, represent 15% of the Italian population, roughly the same proportion as is constituted by Scotland and Wales in the United Kingdom. In Spain, the so-called Article 151 regions - Andalusia, the Canaries, Catalonia, Euskadi (the Basque country), Galicia and Valencia - have powers much greater than those held by other regions. Perhaps most relevant, however, for Scotland is the example of Portugal which has devolution just for the two island areas - Madeira and the Azores, comprising around 5% of the population of Portugal, which the mainland remains unitary. There is a cabinet minister for 'Planning and Territorial Administration,' whose task it is to represent the interests of the territories in the cabinet.

10.It is suggested that the Select Committee consider, in particular, the multi-level systems of Germany, Portugal and Spain. Germany is of interest primarily because of the highly sophisticated system of inter-governmental co-ordination which it has developed, Spain because, especially in Catalonia, the problems which it has faced bear some resemblance to those faced in Scotland, and Portugal because it has devolution in just two areas of an otherwise unitary state.

11.Moreover, the Select Committee seems to me to have a further continuing role in monitoring Scottish devolution to ensure that conventions which are established art the beginning, are respected by successive governments in London and in Edinburgh; and it might report regularly on what improvements may be needed in what, apart from the perhaps untypical experience of Northern Ireland, is a novel experiment in government insofar as the United Kingdom is concerned.

12.I conclude, therefore, that the Select Committee should:

a.Consider whether institutional machinery is necessary to ensure co-ordination between London and Edinburgh.

b.Consider how such machinery can be used to assist rather than to hinder accountability.

c.Consider how clear principles can be derived to regulate the distribution of the block grant to Scotland.

d.Consider how best the Scottish Parliament might ensure the strength of local government in Scotland.

e.Consider how, especially in Spain and Portugal, asymmetrical devolution can work without threatening the unity of the State.

f.Consider, preferably through visits, the experience of German federalism and devolution in Spain and Portugal.