Labour to back full income tax powers for Holyrood

Scottish Labour leader Johann Lamont. Picture: Neil Hanna
Scottish Labour leader Johann Lamont. Picture: Neil Hanna
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THERE is a “strong case” for giving MSPs full control over the income tax rates paid by people living in Scotland, Scottish Labour will declare this week.

• Scotland faces £650m tax shortfall, MSPs told

A key report to be presented to the party’s Scottish conference, which begins tomorrow will also back transferring several other tax powers currently held by Westminster to Holyrood, including air passenger duty and vehicle excise duty.

However, the report concludes that control over VAT, North Sea oil taxes, and alcohol and tobacco duties should remain at Westminster.

But despite opposing reforms led by the Conservative-Liberal Democrat coalition, the report rejects devolving benefits and pensions to Holyrood on the grounds that the ability to pool money and risk across the UK is the safer option.

SNP ministers have insisted that the reforms show the need for independence.

The paper being presented to the conference in Inverness is an interim report of a devolution commission led by Scottish Labour leader Johann Lamont.

Other key recommendations are that the 35-year-old system of funding Scotland through the Barnett Formula should remain. Party sources also insist that any reform should not be linked to a further reduction in the number of Scottish MPs at Westminster.

The report will be published as private concerns are being expressed by some Labour MPs over the proposals, who claim they are going too far in extending the powers of a devolved government.

Income tax – the single biggest contributor to the UK government’s kitty – is “the best candidate for further devolution”, according to the report.

More work will take place over the coming year on the details. The commission is understood to be supportive of moves to ensure MSPs can vary rates within the income tax system.

The development follows criticism of new Scotland Act powers, which will allow MSPs to vary income tax by up to 10p but which will not allow them to, for example, raise the top rate more than the lower rate.

But Labour sources say the party wants to consider further whether devolution of income tax – which would require a new tax collection system in Scotland, and give MSPs power over allowances – is necessary.

The report adds: “We would not want to devolve income tax in a way which would increase the administrative burden on employers, and individuals.”

The report also concludes that, while examining tax powers, “it is important to consider the stability of funding for public services”. It adds: “This is an issue to which the proponents of other models of fiscal devolution have given insufficient consideration. We have no wish or desire to make Scotland’s public services poorer.”

Consequently, it argues that no convincing alternative currently exists to the Barnett Formula of allocating UK funding to Scotland, based on historic spending levels with a population share element – which has historically favoured the country over other parts of the UK.

On the welfare state, the report says: “We oppose the Conservative-led government’s welfare agenda, but this does not lead us to the conclusion that the solution is to tear up the welfare state that has served us well.”

However, SNP deputy leader Nicola Sturgeon will make a fresh argument for an independent Scotland with power over welfare policy within a UK monetary union today.

She will say: “That means that we will be free to make our own tax and spending choices here in Scotland, to suit our own needs.”

Blow for Yes campaign as 70% say No at Napier

THE Yes campaign suffered a fresh setback yesterday when it emerged that students at a ­second Scottish university have rejected the idea of independence by a massive majority.

In a poll of students at Edinburgh’s Napier University, an overwhelming 70.5 per cent said they would vote No in the referendum. Just 29.5 per cent said they would vote Yes.

The Napier poll follows a similar exercise at Glasgow University earlier this year, which also found a decisive majority against independence.

Almost 2,500 students voted in the mock independence referendum at Glasgow in February, of which 38 per cent voted in favour of independence and 62 per cent voted against.

At Edinburgh Napier University, 569 students were questioned in face-to-face interviews by researchers for the university’s Buzz graduate magazine.

The students were asked: “If there was a referendum tomorrow, how would you vote on the question, ‘Should Scotland be an independent country?’”

A total of 168 students said they would vote Yes, but a much greater number, 401, said they would vote No.

A spokesman for anti-independence campaign group Better Together welcomed the result. He said: “Coming on the back of the resounding victory at Glasgow University, this is an encouraging result. It is clear Scotland’s students are taking a look at the SNP campaign and are rejecting it in large numbers.

“However, we are acutely aware that the only poll that matters is the one that takes place in September next year.

“We will be spending every hour of every day making sure that we win the arguments and win the referendum.”

But a spokesman for the Yes Scotland campaign said: “It has to be remembered that this is a very small survey carried out by face-to-face polling and didn’t record those who have yet to make up their minds.”


Sergeant ‘overstepped the mark’ with pro-Union speech

A POLICE sergeant is facing a potential investigation after making a pro-Union speech, in which he compared a Yes vote to jumping off a cliff, at his federation’s annual conference.

Federation sources admitted Colin Johnston, of the west area, “overstepped the mark significantly” in a highly partisan address.

Yesterday’s motion invited members of the Scottish Police Federation to discuss the impact of independence on the service.

However, Mr Johnston painted a picture of economic meltdown which went beyond the parameters of law and order. He told the annual conference in Aviemore: “This is an easy one. If Scotland separates from the rest of the UK, and potentially places itself outside of Europe, the consequences for policing will be enormous. Why, because it’s about the economy.

“President Clinton was right, it’s the economy stupid. It’s a public service. The government does not have money, it’s taxpayers’ money. Police budgets are dependent on the economy. If you’re going to spend a lot of money on policing and public services, you need to raise a lot of money.

“Being part of a larger UK economy has advantages in good times and bad. Being part of a larger UK economy is safe.”

A Police Scotland spokesperson said: “We are aware of comments made at the Scottish Police Federation Conference. However, we are not in a position to comment.”

Afterwards, a federation source hinted that there could be an inquiry, saying: “[Mr Johnston] needs to be alert to the consquences that are going to come his way.”