2 Jun 2014

Wooing Scotland: what are the pro-union parties offering?

The Conservatives are offering the Scottish parliament the power to set income tax if Scots vote to the stay in the union. What are the other main parties putting on the table?

RBS headquarters (Reuters)

Scottish Conservative leader Ruth Davidson pledged to give Holyrood full powers to set the rates and bands of income tax in Scotland if Scots vote no to independence in the referendum on 18 September.

It was the most striking promise among a list of recommendations made by the Tories in a report drafted by the former leader of the House of Lords, Tom Strathclyde.

Ms Davidson said: “If we win the 2015 general election, or are the largest party, these are the proposals that we are taking to the House of Commons. This is going in our 2015 manifesto.

“I fully support, I advocate, and when I was down in London talking not just to the prime minister but talking to advisers as well, many of whom were incredibly sceptical about this, I was absolutely promoting and championing what we have in here particularly over full flexibility over income tax.”

Scottish Liberal Democrat peer Lord Jeremy Purvis said: “A growing centre of common ground has developed. This means that, in the referendum in September, the choice for people is between voting to stay in the UK but to improve it, or to take the increasing risks and unknowns of independence.

“We have argued for some time that a positive case needed to be made for change inside the United Kingdom. We have now reached that point with all parties in favour of change.”

The SNP called the Conservative announcement “no more than pre-referendum posturing” and said the unionist parties were engaged in a “desperate bidding war”.

Labour and the Lib Dems, who also support the Better Together campaign against full Scottish independence, have already set out their vision for increased powers for the devolved Scottish government in the event of a no vote.

How do the different parties’ visions compare?

Ruth Davidson with David Cameron (Reuters)

The Conservative recommendations

The Scottish parliament to be responsible for setting rates and bands of personal income tax – putting it in charge of raising 40 per cent of the money it spends.

A share of VAT receipts raised in Scotland should also be assigned to the Scottish Parliament.

Air passenger duty should be devolved too.

But national insurance and the state pension should remain the responsibility of the UK.

Giving the Scottish parliament the power to supplement some UK-wide welfare benefits “may be a better approach .. if it can be done there is a case for devolving housing benefit”.

Scottish versions of the personal tax statements sent from HM Revenue & Customs, highlighting the taxes under the control of the Scottish Parliament.

A new independent Scottish Fiscal Commission to produce official macro-economic and fiscal forecasts in Scotland.


Widening powers to set income tax rates, putting three quarters of basic rate income tax in Scotland under the control of the Scottish parliament – also reckoned to be about 40 per cent of Holyrood’s budget.

New powers to increase rates of tax in higher and additional bands.

No devolution of air passenger duty, VAT, national insurance, corporation tax, inheritance or capital gains tax.

The option of a lower rate of fuel duty in remote rural areas of the Highlands and Islands.

Housing benefit to be devolved, allowing Holyrood to scrap the so-called “bedroom tax”. Attendance allowance for disabled pensioners to be devolved too.

A Scottish Health & Safety Executive set up and employment tribunals devolved.

Devolution of railway powers to allow a not-for-profit option for the Scotrail franchise.

The Lib Dems

A new constitutional arrangement: “home rule within a federal United Kingdom”.

The Scottish parliament to be able to raise “the greater part of its own spending”: power over income tax bands and rates, inheritance and capital gains tax, corpration tax and air passenger duty.

A single UK welfare and pensions system.

The end of the Barnett formula – the current system which allocates public spending to the various regions of the UK – in favour of a new “needs-based” system.

SNP reaction

Scotland’s Deputy First Minister, Nicola Sturgeon, said: “The Tories’ announcement today means the choice is now crystal clear – a yes vote to deliver the powers Scotland needs or a pledge from the Tories with their long record of broken promises to Scotland.

“There now appears to be a consensus among all parties – even the Conservatives – for more powers for Scotland, but a yes vote in September is the only way to guarantee those powers are delivered.”

She added: “What we are now seeing is a desperate bidding war from the Unionist parties.

“The Liberals want to scrap the Barnett formula, which would see Scotland’s funding slashed, while Labour want to give Holyrood the power to put taxes up but not down, and the Tories’ tax plans would still not allow Scotland to get the full benefits of controlling our own finances.”