Professor Nicola McEwen examines the concepts of 'shared rule' and 'self rule'

Since the publication of the draft legislation on new powers for the Scottish Parliament, UK governments have been keen to stress that the new settlement will ensure Scotland has ‘one of the most powerful devolved parliaments in the world’. Evaluating that claim requires us to think more carefully about what power means in this context.

Studies of federalism have long drawn a distinction between power exercised through self-rule and power exercised through shared rule. Self-rule refers to the decision-making powers under the jurisdiction of sub-state national or regional parliaments. The Scottish constitutional debate, both before and after devolution, has focused heavily on ‘self-rule’ and the politics of self-government, with advocates of home rule keen to maximise the capacity of the Scottish Parliament and government to make policy decisions autonomously.

The Scottish Parliament already enjoys a high degree of self-rule, at least on a par with regions in many federal states, and the Scotland Act (2012) and the emerging settlement will increase Scottish autonomy further. It may have less extensive fiscal autonomy than the Basque country and Navarre, less autonomy over fields like broadcasting or energy enjoyed by others, but the claim that Scotland will be among the most powerful devolved legislatures in the world is not unreasonable if we think only of self-rule.

The claim is less convincing when it comes to the second dimension of power - shared rule. Shared rule refers to the participation of sub-state nations or regions in decision-making processes at the centre, for example through territorial representation in the national parliament or through intergovernmental forums which allow sub-state governments to participate in or co-decide national policies.

A machinery of intergovernmental relations has evolved in the UK, but it is weakly institutionalised and dependent upon good communication, goodwill and mutual trust. Compared to similar nations or regions within federal political systems, the opportunities for devolved Scotland to participate in and influence the decision-making processes of central government remain weak.

The weakness of shared rule is especially problematic in view of the emerging, much more complex, devolution settlement. It will mean increased powers for the Scottish Parliament in taxation, social security and energy (among others) while at the same time increasing the devolved institutions’ dependence on decisions taken in Westminster and Whitehall on those aspects of taxation, social security and energy that remain reserved.

For example, income tax rates and thresholds may be devolved, but every other aspect of income tax policy, as well as employment policy and those macro-economic policies which shape economic performance and job creation, will remain reserved. Similarly, some benefits for the elderly and people with disabilities are set to be devolved, but these will interact with and be shaped by the rest of the social security and tax credit system which stays reserved.

The controversial principle of ‘no detriment’, set out within the financial section of the Smith Report, also underlines the interdependence of the new scheme. It indicated that neither government should be adversely affected as either a result of the devolution of further powers or of the policy decisions taken post-devolution. The implication is that policy decisions of one government which are considered to have a detrimental impact on the other would require financial compensation.

Policy overspills – where the decisions of one government affect the responsibilities of another – cannot be avoided in multi-level systems. Establishing a mechanism to manage these overspills by means of financial compensation for detrimental impacts would be both highly unusual and difficult to manage in a way that satisfied both governments.

These complex issues and interdependencies point to a need for much more effective mechanisms for shared rule, especially through a stronger system of intergovernmental cooperation. The Smith Commission recognised this challenge in its call for the reform and “scaling up” of intergovernmental machinery “as a matter of urgency”. Unless such joint working can be conducted on a way that genuinely provides for shared rule, this new, more complex system of devolution is likely to generate new tensions and grievances, and pressure to think again.

Nicola McEwen is Associate Director of the Centre on Constitutional Change and Professor of Territorial Politics at the University of Edinburgh.