Taxing issue at heart of devolution pro-Union parties failed to address


Ben Thomson in The Herald

More than a year ago, Reform Scotland’s Devo Plus group constructed the Glasgow Agreement.

It aimed to provide a mutually acceptable platform from which the three pro-UK parties could launch specific proposals. It was a pragmatic adaptation of our devo plus proposal, and its main aim was to ensure that the Scottish Parliament raised at least half of the money it spends.

We are pleased, therefore, that, for the first time yesterday, the three parties shared a platform to promise that each would deliver more financial accountability to the Scottish Parliament. This matters a great deal. To mature as an institution, the Scottish Parliament needs to be made more responsible.

Holyrood possesses significant legislative powers but, without the commensurate tax-raising responsibility, it has descended into little more than a spending competition. The size of the cake is up to Westminster; how it is divided up is decided at Holyrood. Sharing a stage yesterday was a step in the right direction, as was identifying a process for further devolution. But yesterday was a missed opportunity for the Unionist parties to offer something truly radical.

Each party, over the past few months, has outlined its own proposals for the next stage of devolution to Scotland. None is truly radical. However, if they had combined the best bits of all three and supported them under a united banner, the pro-UK parties would have been able to legitimately point to a seismic change and a clear alternative for those considering supporting independence.

By putting the best parts together, the Scottish Parliament would be enshrined as a permanent institution, which at present it is not. It would see key areas of welfare expenditure devolved, including housing benefit.

Most importantly, a “best bits” proposal would see Holyrood given significantly more responsibility for raising the tax it spends. It would have complete control of income tax, including rates and bands. It would also take responsibility for inheritance tax, capital gains tax, aggregates levy and air passenger duty. Although it would not be able to alter the rates, Holyrood would be allocated Scottish revenues from VAT and corporation tax and would therefore have an influence, through its economic policy, over how much was raised. In total, these taxes, together with council tax and business rates controlled at Holyrood, would represent some 70% of what Scottish Government spends.

This would have the added benefit of being extremely popular. Every poll conducted on this matter shows that the most popular constitutional future for Scotland is not the status quo or independence. It is a stronger Scottish Parliament within the UK, along the lines of devo plus.

A “best bits” proposal would not be a destination for devolution. Reform Scotland would like to see a point where we can remove the Barnett Formula and have Scotland become responsible for raising all of what it spends. Furthermore, we would like to see significantly more welfare and employment expenditure responsibilities coming to Scotland, particularly in public sector areas where it has responsibility for delivering services. A combination of the pro-UK parties’ proposals would be a bold and positive step forward on the long journey to an enduring constitutional settlement.

Too often in politics, compromise is a byword for agreeing on the lowest common denominator. It would be tragic if that were the case here as the lowest common denominator proposal would only give us an extra 5p on income tax with no welfare powers or permanence to the Scottish Parliament. Our country needs so much more.

When people are looking for genuine vision, the pro-UK parties are in a position to offer it. They did not do so yesterday, and in an ideal world they should have done it a year ago when we offered them the Glasgow Agreement.

But there is still time for the three parties to come together around the best bits of their proposals and offer a really dynamic vision for Scotland after the referendum.