Iain Gray: Smith Agreement is no piecemeal package

Lord Smith, back centre, chairs for the Smith Commission in Edinburgh. Picture: PA

Lord Smith, back centre, chairs for the Smith Commission in Edinburgh. Picture: PA

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THE evening of the Smith Agreement found me sitting in a BBC studio with four of my fellow commissioners.

The presenter introduced us by misquoting a Rolling Stones song. “You can’t always get what you need” she said. Actually the lyric is “you can’t always get what you want.”

It goes on: “But if you try sometimes you just might find, you get what you need”.

That is not a bad summary of Smith. Labour needed a package which entrenched the Scottish Parliament, protected the Barnett formula, and delivered extensive new powers over tax and welfare, in other words fulfilled the referendum campaign “Vow.”

Smith does that and more. We had to try hard, listen to others, shift significantly from our starting point, but we did exactly that.

Meanwhile, Scotland needed a powerhouse parliament, with fiscal responsibility to match the high level of legislative power Holyrood has had since its inception, and that is what the Smith Agreement delivers.

This is a transformational package, because it will see Holyrood responsible for around 60 per cent of the funds it spends, £20bn more in tax, including all personal income tax on earned income, and it devolves full responsibility for around £2.5bn worth of benefits for the elderly and disabled.

With the Smith Agreement we can, if we choose, reintroduce a 50p tax rate for top earners, and a 10p rate to help lower earners.

We can redesign the work programme to get people into work more effectively, redeploy hundreds of millions of pounds worth of disability benefits to re-inject dignity and respect into the system.

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We can attack child poverty by supplementing child benefit for families under stress, reform carers allowance to give carers the rights they deserve, and finally match attendance allowance and DLA to our own Scottish system of care of the elderly. In fact, Smith will enable us to create new benefits of our own, something currently

disallowed by the Scotland Act. Thus we can construct a whole new Scottish welfare system of benefits of our own design, built on the guarantee of UK-wide provision of pensions, social security and child benefit.

Any politician who thinks these are limited powers, simply lacks imagination. Yet Smith provides even more, beyond tax and welfare.

For example coastal communities can be given the income derived from their own shore and seabed, we can use extended borrowing powers to build the houses we need, decide for ourselves about fracking, gender balance the boards of public bodies, bring ScotRail back into the public sector and give 16- and 17-year-olds the vote.

Federalism was never promised, but the parliament’s independent research library produced a report showing that Smith will make Holyrood more powerful than the devolved legislatures of Federal Germany or Australia.

Of course, “you can’t always get what you want.” Labour would like to have seen full devolution of Housing benefit, a further £1.7bn which we think we could deploy more effectively to increase housing stock. Some submissions to Smith argued for devolution of parts of the welfare system which we decided against, on advice that they are highly cyclical, and so devolution would increase the risk of cuts to benefits.

Some academics warned of additional fiscal risk from income tax devolution, but commissioners felt that more power inevitably means risk, and added additional borrowing powers to the Agreement to manage revenue volatility.

A post-Smith Scottish Parliament will be a grown up legislature indeed. If only we could say the same of all Scotland’s politicians.

The SNP participated fully in Smith. Yet before it even came off the presses our new First Minister was hard at work, denouncing it on Twitter.

At the launch, John Swinney chose to list powers not included, and dismissed those contained in the Agreement on which the ink of his his signature was not even dry. Within the week SNP councillors were cermeonially burning the document in public.

What a dismal and depressing response to a dramatic step forward for Scotland. Nicola Sturgeon may not have got what she wanted, but if she tries she just might find she has got what she needs to make Scotland better. She should get on with it.

• Iain Gray is the Labour MSP for East Lothian

SEE ALSO

• {http://www.scotsman.com/news/politics/top-stories/smith-commission-snp-will-argue-for-more-powers-1-3622770\Smith Commission: SNP ‘will argue for more powers’|Link to article}

Labour forced Smith Commission to drop abortion law

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