Westminster parties promise Scotland more tax and welfare powers

5 Aug 14
Leaders of the London-based parties today joined forces to promise the Scottish Parliament more powers on taxes and social security if Scots vote No to independence in next month’s referendum.

By Keith Aitken in Edinburgh | 5 August 2014

Leaders of the London-based parties today joined forces to promise the Scottish Parliament more powers on taxes and social security if Scots vote No to independence in next month’s referendum.

The joint commitment, signed by David Cameron, Ed Miliband and Nick Clegg, came ahead of this evening’s long-awaited television debate between First Minister Alex Salmond and former Chancellor Alistair Darling, who will represent the BetterTogether campaign following Cameron’s refusal to go head-to-head with Salmond.

‘We support a strong Scottish Parliament in a strong United Kingdom and we support the further strengthening of the parliament's powers,’ the statement says.

‘This commitment will deliver a stronger Scottish Parliament in a stronger United Kingdom.’

It does not attempt to synthesise the different proposals that the three unionist parties have put forward for increasing Holyrood’s fiscal remit, but instead commits Westminster to act ‘as swiftly as possible’ on the promises whoever wins next May’s UK general election.

The formal pledge is intended to counter folk memories in Scotland of a notorious intervention in the 1979 devolution referendum campaign by the former Prime Minister, Lord Home, when he indicated that Margaret Thatcher’s Conservative government would deliver a better devolution scheme if Scots voted No. The parties’ Scottish leaders issued a similar joint statement in June.

It goes on to promise unspecified new powers over social security, an area in which the UK Coalition’s reforms have proved especially unpopular in Scotland.

Under the 2012 Scotland Act, Holyrood is due to gain power to vary the basic rate of income tax above 10p in the pound from 2016, and to take charge of some minor taxes like stamp duty. All three BetterTogether parties are now pledged to extend these powers if voters reject independence.

Labour would give Holyrood power to vary the basic rate by up to 15p and to introduce a new 50p rate for top earners. The Conservatives are proposing to give Holyrood full control of income tax, and have also suggested devolving some aspects of social security such as Housing Benefit, while the Liberal Democrats favour a federal UK in which Holyrood would control most of the fiscal regime.

‘We shall put those visions before the Scottish people at the next general election and all three parties guarantee to start delivering more powers for the Scottish Parliament as swiftly as possible in 2015,’ the joint statement says.

Campaigners for a Yes vote responded that increased devolved powers – the so-called devo-plus or devo-max option – had been kept off next month’s ballot paper on Cameron’s insistence. Canon Kenyon Wright, who chaired the 1990s Constitutional Convention that designed Scottish devolution, said the door had been ‘slammed shut’ on giving voters a third choice, which left the latest offer looking ‘suspiciously like a rather desperate bribe’.

Meanwhile, former Scottish Enterprise chair Sir Donald Mackay, former RBS chair Sir George Mathewson, and Standard Life Bank founder Jim Spowart are among a group of Scottish economic grandees behind a letter in today’s Financial Times disputing a claim by Westminster’s Scottish Affairs committee that independence would endanger Scotland’s financial services sector.

They accuse the committee of failing to take account ‘the far more significant risk posed to financial services by the prospect of a UK referendum on membership of the EU’ and add: ‘The financial sector in Scotland will always prosper because we have the skills, the talent and the connections that are needed to thrive.’

A separate report today from economic think tank Fiscal Affairs Scotland accuses both sides in the campaign of peddling unsustainable claims about whether independence would leave Scotland’s public finances better or worse off. Co-author John McLaren said: ‘No-one can estimate with certainty whether Scotland would have a better or worse fiscal position post-independence.’

 

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