Give us control of all tax, demands the SNP

All of the main Holyrood parties will submit their proposals for increased devolution for Scotland today. Picture: Ian Rutherford
All of the main Holyrood parties will submit their proposals for increased devolution for Scotland today. Picture: Ian Rutherford
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THE BATTLE lines have been drawn in the fight to shape post-referendum Scotland, as the SNP government yesterday unveiled demands for full tax powers and control of welfare spending.

Nicola Sturgeon said Scotland should effectively get a “devo-max” settlement, with all powers apart from defence and foreign affairs largely transferred north of the Border after Scots voted to stay in the UK last month.

It came as the Deputy First Minister published the Scottish Government’s submission to the commission tasked with brokering a deal on the extra powers promised to Holyrood by pro-Union party leaders.

Yesterday was the deadline for all the parties participating in the Smith Commission to submit their proposals for the enhanced devolution they want to see handed to Holyrood after the referendum No vote.

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Labour, the Liberal Democrats and the Conservatives submitted the plans they had previously published this year on more powers. But Ms Sturgeon yesterday insisted these will not go far enough after the high-profile pledges made during the referendum.

She said the Scottish Government’s submission amounted to “maximum devolution within the United Kingdom”.

“For us, we need to acknowledge, as I have, that this process is not going to result in independence,” Ms Sturgeon said. “Other parties need to acknowledge the proposals they published back in the spring did not go far enough, do not amount to extensive additional powers for the Scottish Parliament and would not live up to the expectations that people in Scotland, I believe, have of this process.

“This is a process that must deliver something substantial.”

Prime Minister David Cameron, Labour leader Ed Miliband and Deputy Prime Minister Nick Clegg made a high-profile “vow” in the closing weeks of the referendum – as polls tightened – pledging sweeping new powers for Scotland in the event of a No vote. Many on the Yes camp believe it helped swing the ­result, with pledges it would lead to “home rule” and “something close to federalism”.

Ms Sturgeon, poised to replace Alex Salmond as First Minister next month, said the previous plans lodged by the pro-Union parties “do not amount to what people now ­expect to be delivered”.

Lord Smith will now hold face-to-face talks with the representatives of each of the parties involved in the process. A full “plenary” meeting earmarked for next week has already had to be delayed and will now take place on 22 October.

The peer is aiming to broker a deal by the end of November, a deadline he has admitted is “tight”, with draft legislation to be published at Westminster before next year’s general election.

Leaders: New political landscape makes Smith’s job harder

Labour also recommends some elements of welfare policy be devolved, including housing benefit and attendance allowance. Leader Johann Lamont said: “On 18 September, people voted for the best of both worlds – a strong Scottish Parliament backed by the UK – and we are determined that this is what they will get.

“We want to build a consensus for positive change and deliver on the promises made during the referendum campaign.

“So we will work together with the other parties to come to a conclusion that will provide the best future for the people of Scotland.”

Liberal Democrat leader Willie Rennie called for a “bold and entrenched” package of new powers and said the party would work to find common ground. In a letter to Lord Smith, he said: “Now is not the time for a timid approach, but one that seizes the opportunity we have for a principled, democratic transfer of power to Scotland within a rebalanced UK”

The party set out its vision for “home rule” for Scotland as part of a move to a federal system across the UK.

A commission led by Sir Menzies Campbell recommended in 2012 that Holyrood should be able to raise most of its own spending. The party – which advocates a unified welfare system – envisages this would include new borrowing powers as well as control over income tax, inheritance tax and capital gains tax, with the proceeds of corporation tax raised in Scotland assigned to the Scottish

Parliament.

The Conservative proposals include the full devolution of income tax and the assignation of a share of VAT to Edinburgh.

These are a “starting point” for further discussion and “a floor rather than a ceiling”, according to academic Professor Adam Tomkins and former Scottish party leader Annabel Goldie, who represent the party to the Smith ­Commission.

In a letter to Lord Smith, they said: “Any plans for further devolution which undermined the Union would run counter to the clearly expressed, settled and sovereign will of the Scottish people.”

The pro-independence Greens also set out their plans yesterday, calling for the full devolution of tax raising powers and greater controls over welfare funding.

Co-leader Patrick Harvie warned of a backlash if the commission fails to deliver. He said: “The danger is the infectious energy of the referendum debate is followed by the familiar sight of a stitch-up between political parties.”

Meanwhile, in a letter to the parties yesterday, Lord Smith said: “We enter these talks with a weight of expectation upon us.

“The people of Scotland, whether they voted Yes or No, expect us to reach agreement. It will no doubt be a challenging process, with everyone having to give ground.”

COMMENTARY

Tom Peterkin: Smith has no easy task to balance the conflicting arguments

Now that Scotland’s main political parties have detailed their visions of a more powerful Holyrood, Lord Smith of Kelvin can take stock of the task ahead of him.

He has just a few weeks to hammer out a deal from those competing visions. As the pro-independence party, the SNP has come up with the most far-reaching proposal – a package that recommends devolution of all taxes and welfare.

At the other end of the scale is Labour, which has recommended the least radical tax plans – limiting income tax devolution to 15p in the pound. In the middle ground are the Conservatives and the Lib Dems, both wanting full devolution of income tax, while retaining a UK-wide approach to much of welfare and all of pensions.

Of course, the papers submitted to Smith yesterday are merely the parties’ starting-points for what promise to be an intensive period of negotiation. For this process to succeed, compromises will have to be made.

Labour will be under pressure to embrace a more adventurous proposal while the SNP will be expected to give ground. Even so, the SNP will make much of Gordon Brown’s use of phrases like “Home Rule” and “federalism” in the dying days of the referendum campaign to justify its arguments. That approach, however, will not convince the pro-Union parties, who are entirely justified in pointing out that the No side won the referendum and much of their campaign (including Brown’s contribution) was based on pooling and sharing resources across the UK.

How the SNP reacts to these arguments will be keenly observed. Smith will be hopeful that the politicians will be able to set aside their differences and adopt a constructive approach.

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