Party's biggest policy change in a decade

SCOTTISH Labour leaders yesterday announced their biggest policy change on devolution in a decade – backing the extension of the Scottish Parliament's financial powers.

Iain Gray, the Scottish Labour leader, unveiled his party's official submission to the Calman Commission, which is examining the extent of the Scottish Parliament's powers.

Mr Gray said Labour was now willing to back the idea of borrowing powers for the Scottish Parliament, bringing the party into line with the Liberal Democrats and the SNP on the issue. Mr Gray said: "Scottish Labour has looked at ways we feel we can continue to make progress through the Calman Commission.

"One area is in more co-operation between Holyrood and Westminster, so the two parliaments work better together to deliver as much as possible for the people of Scotland. We recognise the importance of financial accountability. While the parliament has tax-raising powers, we believe there should be consideration of borrowing powers similar to that of the prudential borrowing framework that already exists."

Pauline McNeill, the Labour MSP and spokeswoman with responsibility for the Calman Commission, goes further and sets out in an article in The Scotsman today why borrowing powers would be an advantage for the parliament.

She said: "I am also convinced that Holyrood should have prudential borrowing powers, which would allow us to develop a more coherent strategy for fighting the recession. Labour's submission supports the conclusion of (economist] Anton Muscatelli that borrowing powers are closely allied to revenue-raising powers."

Labour's submission to the commission also stressed the need for better working between MPs and MSPs.

Labour said Scottish parliamentary elections could be devolved but legislation to run elections should remain with Westminster.

Broadcasting should remain at UK level, with a role for Holyrood in unique areas such as Gaelic programming.