Alexander calls for ‘radical’ powers after No vote

Douglas Alexander is to call for a further devolution of tax powers". Picture: Getty

The MP for Paisley and Renfrewshire South will use a keynote speech to insist that Labour’s plan to extend devolution, to be unveiled at the party’s annual Scottish conference next month, must be the “defining point” in the independence debate.

His intervention comes after former Scottish Labour finance spokesman Ken Macintosh warned that plans being considered by the party’s devolution commission to hand full income tax powers to Holyrood would be “independence by default”.

However, Mr Alexander, a former Scottish secretary and the most senior Scot in Ed Miliband’s shadow Cabinet, will talk about the need for a “further devolution of tax powers” in a riposte to devolution sceptics within Labour’s ranks at Holyrood and Westminster.

He will also call for Labour’s commission to back the transfer of powers to Holyrood over areas of welfare such as employment and skills policy, saying it needs to “range widely and act boldly”.

Labour’s devolution commission, launched by Scottish leader Johann Lamont in 2012, will report to the party’s annual conference in Perth next month. Labour MP Ian Davidson, the chairman of Westminster’s Scottish affairs committee, has warned that devolving full tax powers to Holyrood would “undoubtedly be to Scotland’s detriment”, with spending on public services likely to be squeezed..

Mr Alexander will suggest Labour needs to reclaim the mantle of home rule and offer an alternative vision of devolution to defeat the SNP in the referendum on 18 September.

He is due to say: “Difficult choices about which services and areas of spending to prioritise are inevitable. And so it will also be necessary to consider how best to utilise the widening tax powers available to Holyrood in ways consistent with our vision of Scotland, the needs of our economy and the demands of our society.”

He will say that powers over minimum wage levels and pensions should remain reserved to Westminster as part of “the pooling and sharing of resources” with other parts of the UK.

However, he will suggest that powers over employment training and the Crown Estates could be earmarked for devolution by Ms Lamont’s commission.

“Further devolution of tax powers could strengthen the accountability of the Scottish Parliament, which today raises only 12 per cent of its own expenditure,” he will say.

“So whether it is considering taxation, employment and skills policy or indeed the responsibilities of the Crown Estates or the running of elections, I would encourage my colleagues in the devolution commission to range widely and act boldly.”

He will say it “can and should embrace further devolution of powers within the UK and within Scotland”, as a “radical alternative” to the SNP’s independence white paper.

“It should be a defining point in the debate, where a reckless and wrong white paper is confronted by the right and radical way forward,” he will say.

Former Labour first minister Henry McLeish, who backs full economic powers for Holyrood, welcomed Mr Alexander’s pledge. He said: “The only way Labour can stamp its influence on the referendum debate is to have a radical package of proposals that sets out what people will get if they vote No.”

But Dennis Canavan, chairman of pro-independence Yes Scotland, said Mr Alexander’s offer was “too little too late”.