Labour must not retreat from further devolution to Scotland

The weaker the party's offer of more powers becomes, the greater the risk that voters will opt for independence.

Those concerned about the survival of the Union would do well to turn their attention away from David Cameron’s "seven months to save the UK" speech and look instead at developments taking place in the Scottish Labour Party. Worryingly, just at the moment when the Yes camp appear to be gaining some momentum in the polls, Scottish Labour appears to be retreating from providing Scottish voters with a clear alternative to independence in the form of additional powers for the Scottish Parliament.

Specifically, there are signs that Scottish Labour are preparing to dilute the centrepiece of their package of new powers: the devolution of income tax. This was the recommendation of the interim report of their devolution commission published last April (a recommendation which builds on the partial devolution of income tax set out in the Scotland Act 2012). Since then, the proposal has been met with fierce opposition within some sections of the party. Initially this was managed in private but it has now spilt out into the open with Ken Macintosh MSP coming out strongly against (remarks echoed by Ian Davidson MP, and Owen Smith MP in a Welsh context). So strong is the opposition, that a number of Scottish Labour MPs have threatened to boycott the party’s spring conference, where the commission’s final report will be unveiled.

The prospect of a retreat is worrying precisely because surveys have consistently shown that there is a real appetite for more powers in Scotland, including tax powers – indeed, stronger devolution is more popular among voters than either the status quo or independence. Thus, the weaker Labour’s offer of more powers becomes, the greater the risk that significant numbers of the large pool of undecided voters will opt for independence. Equally, pollsters are finding that while the No vote has a healthy lead over those saying they will vote Yes, it may be softer than people realise. "Give us something to feel good about voting No" is a complaint heard in the focus groups.

Why Labour might be prepared to take such a gamble over income tax devolution is puzzling. It is widely accepted that there is a case for enhancing the revenue raising powers of the Scottish Parliament. In policy terms, income tax is the most sensible tax to devolve; people are more mobile than land, but less mobile than other things you might tax.  It is also a highly visible tax, and accounts for a significant amount of tax revenue, so if any tax is to be devolved, it is the one to go for. If devolved, the Scottish Parliament would become responsible for raising about 40 per cent of its spending.

But the claims that income tax devolution would undermine the capacity of the UK state to redistribute across the nations of the UK or that it would lead to "independence by default" are highly disingenuous. Devolution of income tax is emphatically not "full fiscal autonomy": it only accounts for 23 per cent of total UK tax revenues. VAT, corporation tax, vehicle, fuel, alcohol and tobacco duties, and National Insurance contributions (NICs), as well as a host of smaller taxes like capital gains tax, would still flow to the UK Exchequer. And the UK government would continue practising fiscal redistribution across the whole UK through the benefit system and through the grant that goes to Scotland (and no-one is planning any changes to that in the foreseeable future).   

And don’t forget that the UK government will continue to set a tax paid by every Scottish wage or salary-earner – National Insurance - which is about 10 per cent of total tax revenues from Scotland. NICs pay for key UK welfare benefits like Jobseeker's Allowance and the old age pension, which will remain in UK hands. Perhaps NICs are not wholly suitable to be a UK-wide income tax, but that is an argument for a long-overdue review of how NICs work, not for keeping both income taxes in UK hands. 

Holyrood is already responsible for roughly 70 per cent of public spending in Scotland, and such key public services as schools and the NHS.  Isn’t it right that the Scottish Parliament should also set some visible taxes to help pay for such vital everyday services? That is undoubtedly the view of the English. Addressing concerns emanating from south of the border will only help strengthen the Union.

Income tax devolution is central to any form of further devolution for Scotland, as it is to Labour’s reputation for fiscal responsibility: it should support a Scottish Parliament that is able to take tax and spending decisions - not just the latter. Rejecting it means Labour would be opting out of any meaningful extension of devolution, though that is clearly what Scottish voters want and what both the Conservatives and the Liberal Democrats are considering. Is Labour really determined to nail its colours to the mast of "devolution less" rather than "devolution more"? 

Guy Lodge is Associate Director of IPPR. Alan Trench is Professor of Politics at the University of Ulster. Both are working on IPPR’s ‘Devo More’ programme.  

Scottish Labour leader Johann Lamont speaks at the Labour conference in Brighton last year. Photograph: Getty Images.

Guy Lodge is Associate Director of IPPR. Alan Trench is Professor of Politics at the University of Ulster

Photo: Getty
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What happened when a couple accidentally recorded two hours of their life

The cassette tape threw Dan and Fiona into a terrible panic.

If the Transformers series of movies (Transformers; Transformers: Revenge of the Fallen; Transformers: Dark of the Moon; Transformers: Age of Extinction; and Transformers: the Last Knight) teach us anything, it is that you think your life is going along just fine but in a moment, with a single mistake or incident, it can be derailed and you never know from what direction the threat will come. Shia LaBeouf, for example, thinks everything is completely OK in his world – then he discovers his car is a shape-shifting alien.

I once knew a couple called Dan and Fiona who, on an evening in the early 1980s, accidentally recorded two hours of their life. Fiona was an English teacher (in fact we’d met at teacher-training college) and she wished to make a recording of a play that was being broadcast on Radio 4 about an anorexic teenager living on a council estate in Belfast. A lot of the dramas at that time were about anorexic teenagers living on council estates in Belfast, or something very similar – sometimes they had cancer.

Fiona planned to get her class to listen to the play and then they would have a discussion about its themes. In that pre-internet age when there was no iPlayer, the only practical way to hear something after the time it had been transmitted was to record the programme onto a cassette tape.

So Fiona got out their boom box (a portable Sony stereo player), loaded in a C120 tape, switched on the radio part of the machine, tuned it to Radio 4, pushed the record button when the play began, and fastidiously turned the tape over after 60 minutes.

But instead of pushing the button that would have taped the play, she had actually pushed the button that activated the built-in microphone, and the machine captured, not the radio drama, but the sound of 120 minutes of her and Dan’s home life, which consisted solely of: “Want a cup of tea?” “No thanks.” And a muffled fart while she was out of the room. That was all. That was it.

The two of them had, until that moment, thought their life together was perfectly happy, but the tape proved them conclusively wrong. No couple who spent their evenings in such torpidity could possibly be happy. Theirs was clearly a life of grinding tedium.

The evidence of the cassette tape threw Dan and Fiona into a terrible panic: the idea of spending any more of their evenings in such bored silence was intolerable. They feared they might have to split up. Except they didn’t want to.

But what could they do to make their lives more exciting? Should they begin conducting sordid affairs in sleazy nightclubs? Maybe they could take up arcane hobbies such as musketry, baking terrible cakes and entering them in competitions, or building models of Victorian prisons out of balsa wood? Might they become active in some kind of extremist politics?

All that sounded like a tremendous amount of effort. In the end they got themselves a cat and talked about that instead. 

This article first appeared in the 20 July 2017 issue of the New Statesman, The new world disorder