First Minister tells Scots UK has a future

Grown up politics, delivering for people, requires strong relationships; serious negotiation between Governments working on common goals in the interests of the people we represent.

Take for example, what happened earlier this month in Wales. The Prime Minister and Deputy Prime Minister came to Cardiff to announce a package of measures, including borrowing powers for investment, full devolution of several smaller taxes and partial devolution of income tax, if backed in a referendum.

Responding to Silk This is the 10th in the series responding the UK Government’s announcements on the Silk Commission. Read the full UK Government response to the Silk Commission’s recommendations.

For a Scottish audience this will sound familiar, since broadly similar powers are already in the process of being transferred to Scotland. This was not a perfect response from our perspective. There were areas – air passenger duty, for example – where we had hoped the UK Government would have delivered. It will be no surprise if I say that the path to this announcement was not entirely smooth. I won’t recite the full saga – I’ll save that for my memoirs!

Suffice to say that at times I was reminded of Churchill’s famous comment on hearing that the Americans had joined the war: “you can always rely on them to do the right thing, after they’ve exhausted all the alternatives”. What matters though is that we got there in the end.

Despite the one or two areas where we had hoped for more, the overall package on offer is a very significant step forward – and a step forward achieved between a Labour Government in Wales and a Conservative/Lib Dem coalition at Westminster. It represents real progress for devolution in Wales. In my experience virtually no political announcement receives an unconditional welcome, but the UK Government’s response to Silk 1 came as close as any I’ve ever seen.

All four parties in the Assembly were strongly supportive, reflecting the fact that all were represented on the Silk Commission and had worked together effectively to agree a unanimous report. Business leaders were also very vocal supporters.  And public opinion is also very much in favour – around 80 per cent of people in Wales back devolved borrowing powers, for example. There is no doubt in my mind that this strong consensus was central to securing UK Government backing for the Silk reforms.

In Scotland of course the constitutional debate is very strongly contested at the moment. My proposition is that if you do choose to remain within the United Kingdom, then it seems to me that our recent experience of co-operation and successful negotiation with the Coalition Government means that there is a very real prospect of forging a new consensus on a lasting settlement – one that is soundly based in a UK framework. I see absolutely no reason why that should not be possible.

Building this consensus in Wales has taken time. On fiscal devolution, the Welsh Government set the ball rolling back in 2008 when we established our own independent Holtham Commission to review our funding and fiscal powers.

As a result, Holtham gave us rigorously argued evidence on the flaws in the Welsh funding settlement, as well as constructive ways forward. This included the case for devolving some tax powers, which really did move the political centre of gravity in Wales.

On the block grant, Holtham showed that claims of huge funding shortfalls were ill founded. But there was indeed a still significant gap of some £300 million per year between what the Welsh Government received and what was justified by relative needs. This gap was very likely to grow over the longer term, unless action was taken.

It is evidence that I, as First Minister cannot ignore, but let me emphasise that I am in no way seeking a reform to the block grant that would favour Wales at the expense of the Scottish budget. In fact, our short term priority for addressing this issue, the introduction of a funding ‘floor’ to stop further declines in Wales’ relative funding, was endorsed by the Scottish Government – an excellent example, by the way, of solidarity between nations of the UK in advancing argument with the centre

Let me be clear that what I am asking for is a fairer funding deal for all of us in the UK. I am confident that a solution to this can be found without driving a wedge between Wales and Scotland. We must not let this issue detract from the bigger question of our shared future in the UK

Overall, the central message that I think emerges from the Silk / Holtham process, is a tremendously positive one for all of us who hope that Scotland will remain within the UK family of nations.

Put bluntly, I know that some people have doubted whether pledges by the pro-UK parties to look at greater devolution post-2014 are to be trusted. In raising those doubts, the separatist case tries to polarise the debate into a choice between independence on the one hand, and an unreformed status quo on the other.

The example of Wales shows that this is a false choice. When faced with a reasonable, evidence-based case for reform that enjoys broad support, the UK’s political structures – regardless of whatever party colour is at the helm – are capable of rising to the challenge and delivering real change.