A committed plan to devolve income tax, welfare and oil revenue would be a Labour game-changer, writes Lesley Riddoch
They didn’t phone. They didn’t write. A quick check of in-boxes, Twitter and Facebook has revealed no plaintive entreaties urging a No vote in September. Perhaps it’s too early. Perhaps ideal targets for “love bombers” are undecided Scots. Perhaps no-one furth of Scotland can spell my surname.
Or perhaps no-one ever expected real people to act on David Cameron’s call to arms on “Mount Olympus” last week. If an equally empty rhetorical device had been used by Alex Salmond, his failure to animate the lieges would be the talk of the steamie. Fortunately for David Cameron, though, the UK press corps has a newt-like attention span over any non-metropolitan issue. So one day’s headlines and the ordeal is over with all scrutiny past.
Scottish Labour will not be so lucky if their Devolution Commission fails to recommend transferring income tax as the great “reveal” at their spring conference. Anything less will be judged as lame as taunting Alex Salmond from the safety of London – and will confirm SNP assertions that Labour is hopelessly London-led. Yet if weekend reports are anything to go by, Johann Lamont may be about to offer the devolution of car tax and airport duty as Labour’s big alternative to independence. That’s got to be a joke.
If so, it’s as unfunny as the rumour that some Labour MPs plan to boycott the spring conference to demonstrate their hostility to more ambitious devolution plans. As Alex Salmond so quickly pointed out, there’s fat chance of three unionist parties agreeing on a post-No settlement when one party can’t agree within itself.
So what’s the big problem? Some Labour MPs are worried about self-preservation. The more powers are devolved to Holyrood, the less justification there is for sending them south. Scottish voters might fondly believe that opposition must revolve around something… loftier. But if in-touch, devo-more Labour MSPs are being overruled by jobsworth, devo-sceptic MPs, Johann Lamont as leader of the whole Scottish party must lay down the law pronto.
Will she? Polls consistently show 37 per cent of Scots favour more powers for the Scottish Parliament, by which they generally mean welfare, oil revenues and tax-raising in that order. Of course, the public mood cannot be quantified since unionist parties removed a second question from the independence ballot paper last year. Then – whilst taunting the SNP for its lengthy campaign – they promised an alternative before the referendum. Well, here we are – still waiting.
To be fair, the Lib Dems have already done the job. Menzies Campbell’s report last year proposed a federal solution, handing control of income tax, inheritance tax and capital gains tax to Holyrood. That would mean half the Scottish budget is raised in Scotland. Now he’s been asked to go further, setting out a common position between all three Better Together parties for “lasting, permanent constitutional change”.
To be brutally honest, though, the Lib Dems’ alternative may not swing many votes on 18 September – even though they could conceivably enforce it in another coalition at Westminster. And though Lord Strathclyde is still ruminating for the Tories, David Cameron declined to name any extra powers in his speech last week.
So it’s really up to Labour to “seal the deal” between pro-Union parties and the Scottish electorate. And it really shouldn’t be hard to be as radical as the Lib Dems, should it?
Why wouldn’t Labour want to devolve income tax? From the Scottish perspective, it would prove Labour still believes in big, meaty, meaningful devolution. In England, it would show that Labour can knock sense into the Scots – and force us at last to raise the money we so frivolously want to spend on social goods like free prescriptions and university tuition. Since so many “subsidy junkie” Scots want to go cold turkey, why not let them? Kelvin MacKenzie might approve.
Obviously, though, it’s risky. A specific plan to devolve income tax will subject Labour to the detailed fault-finding that’s assailed the SNP since Day One. Even if their plan does emerge unscathed, it may be too little (what about oil revenues?) and too late (obviously Labour only raised its game because support for independence is rising). Devolving taxation could strengthen the desire for Scottish independence, as separate systems prove feasible – contrary to earlier dire forecasts. And it will fuel debate about the asymmetric nature of devolution in the UK and the glaring inequality faced by English regions currently unable to protect themselves against UK legislative medicine that suits only London.
Those are the risks. But the rewards are greater. A well thought-out, whole-heartedly supported Labour plan to devolve income tax, welfare and oil revenue collection would be a game-changer in the independence debate. Not just because it would offer specific post-No commitments, but because it would show Alex Salmond has no monopoly on managing risk. Flair, confidence, bold solutions – these aren’t words generally associated with Scottish Labour these days. And yet they must be if the party stands a chance of challenging the SNP for power – in an independent or devolved Scotland.
So why not grasp the thistle, just for once? For better or worse, most Scots want a different society to that created by successive UK governments. The only question in many minds is whether that different society can be built within the UK. If Scottish Labour acted boldly now, the party might get ahead of near-inevitable change and (for once) own it.
Otherwise, this could be the nail in the coffin for Scottish Labour – already membership-lite, demoralised and rudderless. Of course, Scots may simply not believe that Labour at UK level will actually deliver. They may also doubt that Labour can beat the Conservatives at the polls in 2015.
But be in no doubt: a failure to deliver an effective devo deal will signal Labour’s lack of muscular intent towards Scottish Home Rule. And such a betrayal will not be missed by Scottish voters.
Ironically, it will also harm the prospects of Labour MPs. If Labour don’t embrace taxation powers for Scotland, voters may desert the party at the Westminster election and increase the likelihood of another Conservative-led government. Such a result might just be the tin-lid for currently undecided voters in September’s referendum.
So should income tax be devolved? A brave woman might say: bring it on.