The former prime minister said the Tories should agree to devolve more control over welfare, borrowing and the rail-ways as he attempted to forge a deal for more powers in the aftermath of the referendum.
As Scotland’s main political parties prepare for the negotiations that will determine Holyrood’s future, Brown made a high-profile attempt to influence the talks by producing a bold plan of his own.
But despite claims his proposals would create a “powerhouse” parliament responsible for raising 54 per cent of its own revenue, Brown refused to budge on income tax – the key issue dividing Labour and the Tories. The Conservatives have more far-reaching income tax plans than Labour. The Tories believe Holyrood should be responsible for setting all income tax rates and bands, although the tax-free personal allowance would continue to be set by Westminster.
Labour has said income tax devolution should amount to varying the levy by 15p in the pound, three-quarters of the current basic rate. Brown believes full devolution of the levy would enable David Cameron to argue Scottish Labour MPs should be denied a vote on income tax at Westminster.
Brown’s attempt to emerge as a deal-broker came the day after the SNP, Labour, the Conservatives, Lib Dems and Greens all submitted their more powers proposals to the commission set up to look at the issue under Lord Smith of Kelvin.
Having read all the submissions, Brown said Holyrood’s powers should be extended to include devolution of the Work Programme – the welfare programme designed to wean people of benefits – borrowing, rail services, enforcing health and safety regulations and equalities legislation.
Despite remaining tied to limited income tax devolution, Brown’s package also went further than the one produced by his own Labour Party. Even though Labour has said VAT should remain reserved to Westminster, Brown indicated his approval of Conservative plans to assign VAT raised in Scotland to Holyrood. Brown said £5.5 billion would come to Holyrood as a result of assigning 50 per cent of VAT.
Last night, the Conservatives refused to compromise on their more radical income tax plans, but said they were looking forward to discussing the various proposals.
Brown outlined his proposals as the UK Government prepares to issue its “Command Paper” setting out the pro-Union parties’ plans for enhanced devolution.
The Command Paper, which was promised as part of the “vow” for more powers made by the No parties at the end of the referendum campaign, will be published as MPs debate the issue this week.
“The Tories have still to support about half of the powers Labour proposes to devolve,” said Brown yesterday, “refusing as of yet to agree to the devolution of powers relating to employment, borrowing for infrastructure investment, rail services, the Crown estates and the enforcement of UK health and safety regulations and equalities legislation.
“I believe our proposals, which reflect what was promised before September 18, show how strong the new parliament could be. It will be a powerhouse parliament with major new roles including powers relating to job creation, infrastructure, land use, social care, housing and rail.
“Indeed under these proposals the Scottish Parliament will have powers to rival those of states in many federal constitutions. My proposals to devolve most but not all of income tax are robust.
“Fifty-four per cent of Scotland’s own resources would be raised in Scotland – as I show below using tax and resource projections for 2016. By then £7.5bn would come from devolving 75 per cent of income tax and £5.5bn from assigning 50 per cent of VAT.”
Brown criticised the SNP’s submission to the Smith Commission, claiming Nicola Sturgeon’s proposal to devolve all except defence and foreign affairs was incompatible with staying in the UK.
“The SNP plan for fiscal autonomy would mean no transfers of resources within the UK, ending UK pensions, ending UK help for Scots when unemployed, ending UK support for Scottish health and education – all of which Scots voted to keep. It would also end the Barnett formula to which all pro-devolution parties have committed. Their plan adds up to separation by another route,” Brown said.
Brown’s appeal to the Tories comes when the pro-Union parties will be determined to coalesce around a plan.
The shadow pensions minister Greg McClymont and Holyrood finance spokesman Iain Gray are leading the Smith Commission negotiations for Labour. Senior Labour figures have said in private that the party is likely to compromise on income tax and move closer to the Conservative and Lib Dem proposal for full devolution of the levy. There are also signs Labour will be prepared to ditch its idea that Holyrood should have the power to raise higher rates – but not to lower them unless all levels are reduced.
The pro-Union parties will also put pressure on the SNP negotiators – John Swinney and Linda Fabiani – to compromise on their plans.
A Scottish Conservatives spokesman said: “If Mr Brown is eager to negotiate with other parties like ourselves, we look forward to Labour naming him as one of their nominees on the Smith Commission.
“In the meantime, we are focussed on a plan which works for Scotland and the UK. In our considered view, that plan means devolving all of income tax to the Scottish Parliament with no strings attached. We know Mr Brown does not take that view and does not want to go that far, but we are looking forward to discussing this with his Labour colleagues once the commission gets underway.”
Meanwhile the SNP MP Pete Wishart poured scorn on Brown’s plans. “As a Labour backbencher and self proclaimed ex-politician Gordon Brown speaks with no real authority or ability to deliver anything at all – and that is his problem. He may want all his ideas and plans implemented but David Cameron won’t.”