Once the dust from Scotland’s ‘No’ settles, what are the implications for the UK’s EU renegotiation?

September 19, 2014

Act in haste – repent at leisure?

The big question over Scottish independence may have been settled but the campaign has thrown up a whole host of further questions concerning the UK’s constitutional settlement that will need to be addressed in the near future. We look at some of these questions and at how they could impact on the UK’s EU reform agenda.

What’s the plan and schedule for devolution negotiations and implementation?

When it looked like a ‘Yes’ vote might be on the cards, the Tories, Labour and the Lib Dems pledged a new raft of powers for the Scottish parliament over areas like taxes, spending and welfare, with proposals due to be tabled in January. Speaking this morning, Cameron announced that discussions over a new settlement for the rest of the UK and England in particular – would take place “in tandem with, and at the same pace as, the settlement for Scotland”.

Given that this will include – in Cameron’s words – “a decisive answer” to the long-standing West Lothian question (ensuring “English votes on English laws”), it remains to be seen whether this timetable is realistic (some MPs are calling for a full constitutional convention). Labour have said they are committed to “looking at the issue” but the party is divided, with some senior figures including Gordon Brown and Douglas Alexander rejecting the option of Scottish MPs being excluded from votes only affecting English matters (which could deprive a potential Labour government of a majority on such votes). We simply do not know how far-reaching this shake-up will be and a quick and amicable cross-party consensus cannot be taken for granted.

Could this spill over into the general election campaign?

If the devolution question isn’t on the way to being settled, it could conceivably play a large role in the general election campaign; the Tories and UKIP would take up the English cause, Labour and the Lib Dems would be stuck somewhere in the middle while the SNP would play the ‘another broken promise by the Westminster establishment’ card (unless the Scottish and English questions are considered separately). Not only would this displace debate about EU reform from the campaign, but growing English resentment at Scotland’s privileged position within the UK could further boost the UKIP vote. Nigel Farage is already deftly positioning himself to take advantage. A strong UKIP vote would of course put pressure on any government (particularly a Conservative one) to take an even tougher line during the EU renegotiation.

How will it impact the EU renegotiation/referendum timeline?

If the Tories end up back in government but still have to wrap up the constitutional questions it could prevent the government from hitting the ground running on EU reform and renegotiation. Given the scale of the challenge this is far from ideal. Furthermore, as we have warned before, we believe that Cameron is already behind the curve on finalising targeted reforms and road testing them with governments and business across Europe. In the end though, it is hard to see how Cameron could get away with shelving his planned 2017 EU referendum, given the pressure he would be under from his own party.