Alistair Darling backs income tax devolution

Former Chancellor Alistair Darling. Picture: Jane Barlow

Speaking to the Press Gallery lunch, the man who is heading the Better Together campaign to keep Scotland in the UK warned that the unionists need to “win well” in the Scottish independence referendum on 18 Sepetember next year to stop Scotland having a “never ending” constitutional debate.

He said: “The nationalists only have to win once, by one vote and there is no going back.”

He went on: “I think we need to win well because it would do Scotland any good to be talking about the constitution year after year while parking big issues like improving health and education which are not getting the attention they deserve.”

He also said that the greatest achievement so far of the better Together campaign was that the view of independence being “inevitable2 had been ended.

He said: “A year ago there was a feeling that independence was inevitable, but twelve months later that has changed. The majority of people do not accept the nationalist argument.

“We had allowed years to go by when assertions by Alex Salmond were never challenged. When you stand up to this you can make a difference and we are making a difference.”

Mr Darling avoided questions on his own future saying that he is “solely focussed on the referendum” until September next year, but refused to rule out a return to the Labour front bench afterwards.

On devolving income tax, ann issue which recently split the Scottish Labour Party, Mr Darling said he had no objection “in principle” even though many of his Westminster colleagues are deeply opposed to the idea.

But he warned that there is no more “low hanging fruit” for devolution and said that any more powers would need a UK mandate in a party election manifesto.

He said: “If you are going to stand on any platform of constitutional change you are duty bound to put it in a UK manifesto. Just as we stood on a 1997 manifesto of we will set up a Scottish parliament. It is not about a veto it is about having a mandate for it.”

He also compared the Scottish referendum to the one on Europe being pushed for by Tory backbenchers.

He said the fight to keep Scotland in the UK had lessons for Prime Minister David Cameron in dealing with Eurosceptic Tory MPs demanding a EU referendum.

He claimed that the Tory leader has to “confront the demons in his own party” who want to leave the EU.

On the UK economy the former Chancellor warned the UK economy could face more than a decade “bumping along the bottom”.

He warned of a Japanese-style prolonged period of stagnation as a result of the “stifling” austerity policies being pursued by his successor George Osborne and governments across Europe.

Mr Darling said the Chancellor’s measures to revive the housing market could result in a fresh bubble and said it was “nonsense” to delay making a decision on an extra runway for Heathrow.

Across Europe “austerity is stifling economic recovery” and Mr Darling said the Government needed to press other EU leaders to change course.

“I believe we do have a role to play where we mend our bridges and play a more active part in trying to persuade Europe that if it continues down this path of austerity it is likely that our debt levels and our borrowing levels will remain unnecessarily high and therefore our economic activity will be depressed for some time to come,” he said.

As the Chancelllor who nationalised the banks, he also attacked the idea of selling Royal Bank of Scotland and Lloyds shares early to help pay off the debt, describing the possible move as “ludicrous.”