Scottish Labour must be bold on extending devolution

Scottish voters are entitled to know what type of devolution they will get if they tick the No box this September. While the pro-devolution parties are all working separately on their proposals, it is Scottish Labour that is expected to take the lead with the publication of the Devolution Commission report.

There has been much media excitement about ‘splits’ and ‘chasms opening up’, following statements by Ken Macintosh MSP and Ian Davidson MP. Devolving income tax would be “independence by default” claimed Ken, who is assumed to be the outrider for Jim Murphy MP. Ian Davidson MP claimed the proposed move would damage the Barnett Formula.

Of course there is no show without punch, in the form of Alex Salmond, who claimed that Labour’s “bitter in-fighting” over plans to increase the Scottish Parliament’s powers, has made it impossible for the pro-UK campaign to deliver a positive alternative to independence. Leading a party that, with some honorable exceptions, hardly ever questions the great leader, the concept of political party having a debate must seem a bit strange!

I disagree with Ken Macintosh and Ian Davidson on this issue, but they are perfectly entitled to argue their corner. I don’t accept that all MPs, including Ian, hold to this view because “their power and influence will be ¬diminished”, or because they believe it will lead to a cut in the number of MPs at Westminster. Of course there are still some MPs who have never liked the Scottish Parliament, but they are now a much diminished group.

I support the devolution of all taxes on property and income; while retaining business and consumption taxes at the UK level. This would require a balancing mechanism and greater borrowing powers. With such flexibility we could finally get rid of the huge cost of PPP/PFI schemes by giving prudential borrowing powers to health boards, NDPBs and public corporations, including Scottish Water. Most importantly, we would also largely be spared from the financial consequences of public service reforms in England. A point ably reinforced by the IPPR, Devo-More proposals.

Fiscal devolution would enable at least a modest challenge to neo-liberal economic orthodoxies, recognising that the SNP's approach to independence would operate within the constraints of fiscally conservative policies, particularly with its plan to reduce corporation tax. On the other hand, Devo Plus strategies that rest on the 'moral hazard' that occurs when a parliament spends but does not raise revenue, also adopt neo-liberal ideas and limit powers for redistribution. Fiscal policy should support the creation of a more equal society.

But this debate is about more than economics. The driving force for advocates of Home Rule, back in the 1880’s as now, is support for decentralisation, re-distribution of power and extension of democracy as part of the wider struggle to win working class power over the economic, political and industrial decisions affecting their lives. Extending devolution gives Scotland the ability to do things differently, Scottish solutions to Scottish challenges, without undermining the solidarity of the UK.

All the polls make it clear that the majority of Scots want to see a strengthened form of devolution short of outright independence. Scottish Labour has to pitch a radical solution on powers and a vision of the sort of Scotland we could create with those powers. Anything short of that would be a failure of leadership and encourage a drift to independence.