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Labour’s Devolution Commission

April 21, 2013

Scottish Labour published its interim report on reforms of devolution on Friday 19th April. The full report is here – http://www.scottishlabour.org.uk/campaigns/entry/devolution-commission

The report was discussed at the party conference in Inverness to mixed reviews, not least unhappiness amongst its own MPs. The report is actually very thin on concrete suggestions and spends much of its time explaining why change cannot happen – in welfare, pensions and corporation tax powers. There isn’t much of a positive offer here. And, when it comes to considering more powers for local government, things are also pretty thin. It flirts with local rating revaluation – we’ll love seeing that costed in the newspapers – but is vague on local reforms. It’s much better on the Crown Estate Commission and at least proposes a radical solution though one that has been around for a while.

There is an strong element of rewriting history in the sections explaining Scottish Labour attitudes to devolution. On page 17, it states that ‘devolution has been at the heart of the Scottish Labour Party’s political agenda since its inception.’ This is a nice phrase but completely untrue, and would fail the party’s own Truth Team. Its use of referencing here is curious – try reading Keating and Bleiman or Keating and Jones on Labour and devolution or even Labour’s submission to the Kilbrandon Commission and you’ll realise Labour was officially against devolution for a large part of the 20th century. It may have had a rhetorical commitment to the issue but this didn’t involve doing much about it until 3 weeks before the October 1974 general election. Even then, the party had its arm twisted by the British party to force it to support a Scottish Assembly.

More fundamentally, it’s easy to understand the political motives behind this report – Labour needs a constitutional offer before the 2014 referendum – but the economics and policy reasons behind it are dubious. More income tax powers are advanced as a means to make the Scottish parliament more accountable, which is fine in so far as it goes. But, it doesn’t really offer much else. It’s right to point to the problems of devolving welfare and some other taxes, but it’s not exactly brimming with ideas for tax devolution, even though it’s report is titled ‘Powers with a purpose’. Devo-reformers would counter this by asking some simple questions – like, will devolving income tax actually help the Scottish parliament to tackle some of Scotland’s major problems like low business growth, lower growth generally, health issues around alcohol and smoking? The Devo-More report by Alan Trench looked at these latter issues in particular, whilst recognising the practical problems in devolving such taxes. The Labour commission doesn’t. It’s a Calman2 exercise in essence. It gives Scottish Labour something to say but not something very convincing.

Also, making simple errors like saying Scotland would face an annual fiscal deficit of £7 billion on page 32, then saying it is only £7.6 million on page 33 do not inspire me with confidence. It makes you look like the guys advising Osborne, with their rather epic spreadsheet error!

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