SNP: Give Scotland power over minimum wage

It is understood SNP will push to transfer control of corporation tax to Holyrood. Picture: PA
It is understood SNP will push to transfer control of corporation tax to Holyrood. Picture: PA
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THE SNP is to campaign for the minimum wage, income tax personal allowance and more benefits to be transferred to Holyrood in its general election manifesto next year.

Nicola Sturgeon’s party will go into May’s Westminster election on a platform of “beefing up” the Smith Commission in an attempt to keep their drive for more powers at the top of the political agenda.

Scotland on Sunday also understands that the SNP 2015 manifesto will include a pledge to transfer control of corporation tax to Holyrood. Amid growing signs that Chancellor George Osborne intends to hand powers over corporation tax to Northern Ireland in this week’s Autumn Statement, the SNP believes that such a move would strengthen its argument for the levy to be devolved to Edinburgh.

Last night First Minister Nicola Sturgeon said: “I very much hope Northern Ireland is given control of corporation tax. But if they are, it simply blows apart any claims it would not be possible for Scotland too.”

The SNP will try to undermine the pro-UK parties’ attempts to use Smith to draw a line under the constitutional question by producing a manifesto focusing on their assertion that Scotland requires more powers to tackle “in work” poverty. Despite contributing to and signing off Lord Smith of Kelvin’s report, the SNP believes a strong general election result will enable it to strengthen the proposals.

At the heart of its manifesto will be an attempt to overturn Smith’s conclusion that control over the minimum wage ought to be retained at Westminster.

The SNP believes that gaining the ability to alter the minimum wage would allow it to increase the £6.50 per hour rate in line with inflation in the short-term. Ultimately, the SNP’s goal would be to raise the minimum wage to the level of the “living wage”, which stands at £7.85.

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The 2015 manifesto will also contain a commitment to deliver more welfare powers on top of those recommended by the Smith Commission.

Last week, Smith’s report proposed a devolution of some benefits including a new power that would enable a Scottish Government to create its own payments in devolved areas.

But it also said that the new Universal Credit payment, which merges several old benefits, should remain under Westminster control apart from some flexibility for Holyrood to vary the housing elements.

The SNP will seek to devolve the child tax credit, housing benefit, working tax credit, income support, employment and support allowance and Jobseekers’ allowance, which are currently being merged into Universal Credit.

This is despite a far-reaching proposal in the Smith report that would allow a Scottish government to vary payments for these benefits under a clause allowing Holyrood “to make discretionary payments in any area of welfare”, including those reserved to Westminster.

A senior SNP source said: “This could and should have been the strongest package of self-government possible short of independence – after all, that is what the people voted for in the referendum, between those who voted for ‘the vow’ and those who voted Yes.

“But the Smith Commission fell short because it could only go as far as the Westminster parties were prepared to go – as far as Labour, the Tories and Lib Dems are concerned, this is their last word on devolution.”

The source added: “Next year’s election offers people the opportunity to have their say. The SNP will propose specific improvements to the package, and we will seek people’s support for that.”

The manifesto will underline the SNP’s belief in independence, but will not contain a commitment for another referendum.

The SNP has acknowledged that a UK general election is not the forum to achieve a mandate for such a vote. Sturgeon has said a second referendum should only be delivered by a Scottish Government and she will decide later next year whether the 2016 Scottish election manifesto will include plans for one.

The SNP regards the devolution of the income tax personal allowance as “unfinished business” arguing that it would give Holyrood the power to increase the money in workers’ pockets.

The party’s opponents, however, argue that Smith’s proposal to devolve all income tax bands and rates would give a Scottish Government the power to manipulate the tax system to achieve the same effect.

Last night, Liberal Democrat leader Willie Rennie said: “The Scottish Parliament will have the power to cut tax by putting the personal allowance up through a new zero rate. The parliament would only be prevented from cutting the allowance and increasing income tax. Only days after signing up to a stable and substantial package of home rule powers the SNP are seeking to pick it apart.

After pledging to seek to represent all of Scotland they are now only interested in the 45 per cent who supported independence.”

A Labour spokesman said: “The control over more than £20 billion of tax and welfare, the ability to create new benefits, on supporting people into work through the work programme, is the biggest transfer of powers since the parliament was established. That all the SNP talk about is things they can’t do is disappointing.”

The pro-Union parties shied away from devolving the personal allowance on the grounds that keeping that part of income tax policy shared across the UK was consistent with a No vote. Labour, in particular, was worried that devolving more income tax would allow the Conservatives to press for English votes for English laws (EVEL) at Westminster. But with English Tory backbenchers agitating for EVEL, one of the Conservative Smith negotiators warned that continuing complaints about Scottish MPs voting on income tax could break up the UK.

Professor Adam Tomkins said: “What we need is a ­sensible approach and for some of the English Tory backbenchers to wake up and stop complaining.”

He added: “I don’t think the Union could withstand a surge in English nationalism.”

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