25 Nov 2014

Scottish Labour U-turn on tax devolution

Jim Murphy, the front-runner for the leadership of the Scottish Labour party, has decided he does want full devolution of tax to Scotland after all. It is a remarkably swift U-turn by the former Scottish Secretary and long-time devo-sceptic, rushed out to make sure that Labour, the Lib Dems and the Tories are singing from the same hymn sheet when the Smith Commission publishes its conclusions on Thursday.

Until very recently, Labour was way behind the other two parties in terms of readiness to devolve tax powers – you see the three main parties’ submissions to the Smith Commission (published only last month) by clicking right here.

Labour’s plan was to devolve 75 per cent of the basic rate to Scotland. Gordon Brown in the referendum campaign repeatedly proclaimed this as a great offer but his rhetoric fed the notion that Labour (and the other pro-unionist parties) were offering something bigger.

Jim Murphy Mp Formally Launches His Campaign For Scottish Labour Leader

Gordon Brown, just as the referendum campaign was ending, sounded grimly aware that the agenda may well have raced ahead of Labour’s position. The excitement around the narrowing polls, his own “home rule” language and SNP quick wittedness had contributed to expectations of new devolved powers racing past Labour’s original offer.

The Smith Commission looks like coming up with proposals close to the Tory ones originally authored by Lord Strathclyde’s commission. That proposed devolution of income tax including the power to set rates and the thresholds between bands, as well as some smaller taxes. (It also proposed devolution of some welfare including housing benefit and attendance allowance.) Sources close to that review chuckled at the time it was published that they’d found a way to shoot Labour’s chances of running Westminster in perpetuity. Gordon Brown has said these plans are a “Tory trap”.

But the UK leadership and Jim Murphy (pictured above) have decided that the risk of losing Scottish Labour MPs at Westminster as a result of consequential constitutional changes is as nothing to the more immediate threat of SNP candidates marauding across once safe Labour seats in Scotland and threatening to monster Labour in the general election.

In yesterday’s FT the man who led the Better Together campaign, Alistair Darling, said full-scale tax devolution could end in “floods of tears” as the Scots suffer from unstable income that can’t support their welfare budget in bad times and London struggles to sell government bonds when the markets aren’t sure it is in charge of income tax. He didn’t say, but plenty of other senior Labour figures will, that they worry that full-scale tax devolution could feed disagreement or friction zones with Scotland which will serve the SNP’s cause in the longer term.

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3 reader comments

  1. Nigel Wilson says:

    The whole idea of devo-max is to devolve the maximum of powers to the Scottish government. I remain unable to understand the foot dragging and I am a staunch Unionist. A promise is a promise.
    Yes, it may well generate instabilities but it was Labour that introduced these so-called National Assemblies in order to stop local nationalisms. Now that worked didn’t it?
    Labour has bungled the entire process of devolution from start to finish. We are lucky that we even have a country as a consequence. The nasty nettle of fully devolved income tax has to be grasped. The ambitions of the SNP are now contradictory to a stable fiscal budget in Scotland so they will have to reap the political consequences rather than pass responsibility to London.

  2. Philip Edwards says:

    Gary,

    The fact is, like them or not, the SNP has run political rings around New Labour, the tories and. of course, the sandal-wearing libdems.

    And the basic reason for that is that they have a sense of morality on their side. This has taken time to build up but it is now well nigh irresistible. When the next referendum comes around there will be no half measures, the Scots will vote Yes overwhelmingly.

    Once Scotland goes independent, Wales will too, eventually. Northern Ireland will rejoin Ireland once its tribalists realise the English establishment hates them as much as it hates the Republic.

    Would there was the same sense of unity and organised determination in England. Until we get that Lahndan will be be the centre of free-loading suited-up thieves and robbers housed in its nests of disgusting high rise ugly architecture, all of it supported by a bribed and deluded dwindling huddle of apologists.

    Almost anything is welcome that shovels that corrupt gang into the dustbin of history. They can’t say they haven’t got it coming.

    Like most people I know, I don’t want Scotland and Wales to leave the Union. I believe in the long run we really are better together once there is necessary constitutional change. Nationalism has never been a force for good.

    And now the SNP is strong enough to say openly that if they don’t get the promised powers they will simply take them. The Canary Wharf/Whitehall, Westminster hoodlums better get used to that approach because sooner or later that is what will happen. It isn’t only the Scots who want their country back.

    What price then British monopoly-owned far right media referring to a “British Spring”? Or will they simply go on lying even to themselves about what looms?

    1. Tim Morrison says:

      You say that ‘nationalism has never been a force for good.’ What about the quest for self-determination. Was it wrong for the Irish to want to govern themselves or the Norwegians? We are showing in Scotland that civic nationalism is a powerful force for creating a stronger national polity that looks after those who are disadvantaged and welcomes the stranger. What is not to like about that?

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