Nicola Sturgeon to demand immigration, tax powers to head off independence

Immigration and new taxes for Holyrood could be Nicola Sturgeon's first demands of any new Conservative Prime Minister who wants to head off a second independence referendum.

Speaking in front of an invited audience in Edinburgh tonight, the First Minister gave a clear indication what powers she would want for the Scottish Parliament - short of independence - and her belief that the fiscal framework, which guides the Scottish Government budget, needs to be re-negotiated.

And she revealed that in the single conversation she has had with Boris Johnson - the front runner for the Tory leadership - he flippantly asked her about the financial framework of devolution.

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Recounting how they had walked beside each other at a recent Second World War commemoration event, she said he had suddenly said: "So Nicola, does full fiscal autonomy buy you guys off?"

First Minister Nicola SturgeonFirst Minister Nicola Sturgeon
First Minister Nicola Sturgeon

"So that's something to raise with him when he becomes Prime Minister," she said, adding that no longer having to "sit in a room with Theresa May was something of a relief, tempered with the thought of sitting in a room with Boris Johnson of course."

The event, organised by think tank Reform Scotland, and hosted by its director Chris Deerin, heard Ms Sturgeon reflect on 20 years of devolution.

But it was in the question and answer session that she said suggested that she would target the devolution of immigration law to tackle Scotland's falling birth rate and ageing population, as well as have a "basket of taxes", including VAT and National Insurance, to give the Parliament more levers to develop economic policy.

She also admitted that if a new Tory PM cut income taxes - as Mr Johnson has already floated - she would need to think carefully about further rises in Scotland. "We thought long and hard about the changes we made to the income tax system and how to maintain and retain our competitiveness was up there as a key consideration and always will be.

"But income tax is the only national tax we have control over so there's always going to be a limit as to what we can do. Even if Scotland was to become independent tomorrow the geographical proximity to our neighbours with different tax regimes so it would always be something we would have to consider. But it's a bit of a myth that no government can raise taxes and remain popular. If we can make the case and demonstrate the reason behind it you can take people with you. Competitiveness in tax is something we would never be complacent about."

She said that the fiscal framework as it stands puts Scotland in a "vulnerable position" in terms of financial decisions being made by a UK Prime Minister "with no reference to how that framework operates they just announce policies, such as Boris Johnson did. As we come up to the renegotiation of that [framework] this is an issue we will have to look at."

Earlier in her speech, Ms Sturgeon said that Boris Johnson’s “almost certain” election as the next Conservative leader proves how sharply Scotland has diverged from the rest of the UK, given his fixation on a no-deal Brexit, and his “gratuitously offensive” opinions about women and immigrants,

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She said: "It is surely deeply concerning that the Conservative party is even contemplating putting into the office of prime minister someone whose tenure as foreign secretary was risible, lacking in any seriousness of purpose or basic competence and who, over the years, has gratuitously offended so many, from gay people, to Africans, Muslim women and many others.

"But while that, for now, is a matter for the Tories it does further illustrate the different political trajectories of Scotland and other parts of the UK. And it raises the more fundamental question of whether the UK and therefore devolution, in its current form is capable of accommodating those differences.

"I have to be candid and admit I’m not a neutral observer of these matters but it does seem to me that these days, the unionist offer to Scotland amounts to not much more than: ‘Your views don’t matter, do as you’re told and, if you don’t like it, tough, we’ll do it anyway.’

"Brexit starkly illustrates the point. The votes of people here have been ignored. The Scottish government’s attempt at compromise was rejected. And voters in the Scottish parliament opposing Brexit and a subsequent power grab were disregarded."

She again reiterated that her government would learn the lessons from Brexit, should a second independence referendum result in a yes vote. She said that in the run-up to the 2014 vote they had been clear that if the yes campaign had won, they would look to "take people with us" who had voted no. "We would have brought Alistair Darling into the tent and the negotiations if independence had won, You have to take people with you and bring them together again."

On another divisive issue she was asked about her government's plans to reform the Gender Recognition Act. She said that a statement would be made in Parliament this Thursday, so could not be expansive.

But she said: "All parties made a commitment to reform the 2004 GRA at the last election, not just the SNP. I know I often say that Scotland is the first country to do xyz, but in this case we're not leading the way and the proposals are bringing us into line with international best practice. The Republic of Ireland did this some years ago.

"I'm not seeking to deny that this is a very vexed issue which people feel very strongly about and is dividing within and across all parties."

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She said the statement would set out the detail of what's being proposed and would "encourage dialogue to get to the right outcome." "The legal right to change gender has been there since 2004 this is about the process to help people exercise that right, and making it less medicalised. I'm a lifelong feminist. Issues of women's rights and protecting women runs strongly with me. The Equality Act already allows trans people to be excluded from women's only spaces if that's justified. This wouldn't change that.

"There's a way to get through this that respects the equality of trans men and women but does that in a way that makes women and men feel their rights are not under threat. It's a challenge but it's one we will meet."