Independence poll must have third option, Devolution Plus, say experts

A SCOTTISH think-tank has called for the bulk of the tax and borrowing powers Westminster still holds over Scotland to be handed to Holyrood as part of a “third option” in an independence referendum.

Reform Scotland wants MSPs to take charge of enough tax and borrowing powers to meet Holyrood’s spending commitments, a controversial move that would mean the end of the UK government’s block grant to the Scottish Parliament. The think-tank also wants the majority of welfare and benefits powers transferred from Westminster to Holyrood, with the UK parliament only keeping hold of VAT and National Insurance, as well as pensions and sickness/maternity pay.

Reform Scotland, which calls the proposed reforms “Devolution Plus”, claims that Holyrood controls about 60 per cent of total public spending north of the Border, but that it has decision making powers for less than 7 per cent of that funding. The body said that a transfer of powers would mean MSPs had enough powers to tackle poverty, in a submission to the Scottish Parliament’s committee on the Scotland Bill currently going through Westminster.

However, the shake-up would not involve any changes to the UK government’s responsibilities for defence spending and foreign affairs, related to Scotland.

Reform Scotland wants ministers to include option three in an independence vote alongside separatism and the status quo.

Ben Thomson, Reform Scotland chairman, who is expected to give evidence to the Scotland Bill Committee at Holyrood later this month, said: “There is, at present, a very real imbalance between Scotland’s responsibility for setting and collecting income and the expenditure it is responsible for.

“Therefore, we have recommended a structure that will shift the responsibility for raising revenue to create a much more even balance between Holyrood and Westminster which incentivises both governments to act more responsibly within their respective areas of power.”

Reform Scotland claims that the split in programmes between Westminster and Holyrood make policy on relieving poverty “unfocused and inefficient” and reduces the Scottish Government’s efforts to mere “tinkering”.

Mr Thomson added: “Many areas associated with this goal are already devolved to the Scottish Parliament, such as housing and social inclusion, yet the Scottish Government can make no concerted attempt to address poverty without the necessary tools and that requires welfare provision to be devolved.

“In the case of the Scottish Government, our view is that Holyrood should raise all the money that it has responsibility for spending.”

However, Scottish Tory leadership contender Murdo Fraser, who favours enhanced powers for Holyrood, warned that Reform Scotland’s proposals were “too close to independence”.

He said: “As far as the referendum goes, I’ve made it clear that there should be a simple yes or no question and that any second question would muddy the waters. There should be a straightforward choice and I don’t agree with Reform Scotland.”

A spokesman for finance secretary John Swinney said: “There is overwhelming backing for the Scottish Parliament having the full range of job-creating powers we need to boost jobs and recovery.

“The people of Scotland spoke in the election, and it is clear that the provisions of the Scotland Bill fall far behind.”