Jeremy Purvis: Devo-plus would work – but devo-max wouldn’t

THE Devo Plus submission to the Scottish Government’s referendum consultation, which was submitted yesterday, makes a strong case for devolving more powers to Holyrood to improve accountability to the people of Scotland, to strengthen the Scottish Parliament’s powers and shows how a long-term sustainable relationship can exist between Scotland and the rest of the UK.

The proposals mean the devolution of further taxes including all income tax rates and corporation tax to Holyrood. For other major taxes such as duties and oil and gas revenue we point to how further reform can be made in the future that would see their devolution.

An alternative approach has been suggested by some, including the Scottish Government, but explained in detail by none, namely devo-max, whereby we understand all tax is raised in Scotland and then a payment is given to the UK for the few remaining UK services. The system in operation in the Basque Country and Navarre in Spain is given as the example we should follow.

We decided to look at how the Basque model would work if in a Scottish and UK context, using Scottish Government revenue and expenditure data.

Our detailed modelling shows that with devo-max there would actually be a deficit of more than £7 billion on Scottish Government services, and a more than £3bn deficit for UK Government services in Scotland.

Very high levels of destabilising borrowing would be needed just for devolved services. There would also be a major black hole in the funding of remaining UK services in Scotland, such as pensions, benefits and social protection.

As the debate goes forward those who argue for devo-max will have to explain it in more detail, rather than use it as a form of easy shorthand for more powers because it is not only fiscally unstable but also fails to address the need for appropriate accountability at both Scottish and UK level. Devo-plus, however, builds on reforms already made and addresses the need for better accountability and a stronger Scottish Parliament within the UK.

• Jeremy Purvis is leader of the Devo Plus group.