Pro-union parties squabble over Scottish powers

Johann Lamont has a test to face, says Willie Rennie. Picture: Ian Rutherford

Liberal Democrat leader Willie Rennie will use a keynote post-referendum speech to activists today to warn that Labour in particular must “adopt a more substantial package” to ensure Holyrood gets significant financial controls, in line with pledges made by the Better Together parties before the vote on independence.

It came as Lord Smith, the peer tasked with brokering a deal on more powers, warned all political parties to come to the table with proposals which meet the electorate’s expectation for significant change.

Gordon Brown suggested a No vote would see Scots enjoying “home rule and something close to federalism” through new powers at Holyrood.

Scotland’s main parties have been told by Lord Smith to submit their proposals for change by the end of next week.

He also wrote to Scotland’s civic institutions yesterday, inviting them to take part. The public are being invited to share their views, with a deal to be reached by the end of October.

Mr Rennie will say today there are “big challenges” in securing a deal.

“For Nationalists, they will need to convince voters that they will not use the Smith process to secure independence by the back door only days after it was rejected by the voters,” he will say in Perth.

“An attempt from Nationalists to redefine home rule and federalism in an ultra-extreme form is perhaps understandable, but it is not something that will create a sustainable settlement that will stand the test of time.”

He will then say: “For unionists, especially Labour, the test will be whether they can adopt a more substantial package of powers that will give the parliament the financial responsibility and flexibility it needs to tackle inequality, create jobs and invest for the long term.

“Without the power to raise the majority of the money we spend, undertake prudent borrowing and control wealth taxes, the change will not be substantial enough to be sustainable.”

Labour’s plans would give MSPs the power to vary taxes by 15p, but opponents say this would leave Scotland raising just 26 per cent of devolved spending. Labour claims it is closer to 40 per cent.

The Liberal Democrats’ Scottish “home rule” vision would see Holyrood raising and spending most of its own taxes and borrowing on its own terms.

The Conservatives came up with a radical plan which would see Scotland given full income tax powers, accounting for 40 per cent of spending. They also suggested control over VAT could be handed to Scotland.

A Labour spokesman said in response to Mr Rennie’s calls: “Scottish Labour is committed to devolving substantial new powers on welfare and taxation, bringing better, faster and safer change to the Scottish Parliament. We will engage in this process constructively.”