Tories Outline Tax Blueprint

2 June 2014, 12:13

Scottish politicians should be more accountable to the taxpayer for the money that they spend in the next phase of devolution, according to the Conservatives.

Scottish leader Ruth Davidson has described the Scottish Parliament as being like "a tricycle" where politicians can spend without any accountability for their actions in the tax system.

She has pledged to "take the stabilisers off" and give Holyrood full control over income tax if it votes No to independence, as part of the Tories' devolution offering drafted by former Leader of the House of Lords, Tom Strathclyde.

Prime Minister David Cameron and Chancellor George Osborne have backed the proposals, Ms Davidson said.

But some London advisers "were incredibly sceptical", she added.

Mr Cameron has said any further devolution must be subjected to cross-party approval, and Ms Davidson said she "doesn't have a crystal ball" to predict how the Tories' blueprint will be received by the other parties.

Launching the report of the Strathclyde Commission in Glasgow, Ms Davidson said: "What we have at the moment is like a tricycle, what the Scotland Act 2012 brings in is a bike with stabilisers, and what this builds on is taking the stabilisers off.

"So it does allow MSPs to take decisions not just over the rates of taxation that we levy, but it also allows them to vary one or more.

"It allows them to introduce a new band of income tax. It allows them to find the formula that best allows the work that the particular government of the day wants to carry out and has a mandate for in Scotland.

"I think that flexibility shows a responsibility."

She added: "I have spoken directly to the Prime Minister and the Chancellor of the Exchequer and there is political will for this to happen.

"If we win the 2015 general election, or are the largest party, these are the proposals that we are taking to the House of Commons. This is going in our 2015 manifesto.

"I fully support, I advocate, and when I was down in London talking not just to the Prime Minister but talking to advisers as well, many of whom were incredibly sceptical about this, I was absolutely promoting and championing what we have in here particularly over full flexibility over income tax."

She continued: "In terms of  'do I think we have got all of the answers?', I don't have a crystal ball.

"I think this is a very good blueprint for going forward. I back what is in it. I think it gives us a more stable and settled distribution of powers than we have now.

"I think that it meets the aspirations of the people of Scotland that they have clearly expressed in any amount of research and polling."

Scottish VAT receipts should be assigned to the Scottish Parliament and all barriers should be removed from Holyrood supplementing UK benefits out of its own budgets, according to the Strathclyde Commission.

There should also be Scottish versions of the Personal Tax Statements sent from HM Revenue & Customs, highlighting the taxes under the control of the Scottish Parliament, it said.

The tax-free personal allowance should remain a reserved issue for Westminster, but it would be up to the Scottish Parliament to decide on both rates and bands.

A new independent Scottish Fiscal Commission should be created to produce official macro-economic and fiscal forecasts in Scotland, it added.

Holyrood should be given more responsibility on some welfare issues, particularly where a cash benefit is related to a devolved policy area such as housing benefit and attendance allowance, it said.

Ms Davidson said some of the proposals may be "hard to achieve".

"The Prime Minister stands full square behind the income tax proposals and the welfare proposals," she said.

"This does not mean that some of these measures that are in here are hard to achieve, and where they are the commission has rightly flagged that up.

"For example, in areas like housing benefit, once it is part of the Universal Credit that might be quite tough to do, in terms of the assignation of VAT receipts, that might be quite difficult to do.

"But where there is political will, I believe we can build on what is already happening in the Scotland Act 2012 to deliver these for Scotland."

Mandatory committees of the Scottish Parliament should be led by opposition members, and members of the Scottish civil service should also serve elsewhere in the UK as part of their career progression, the Commission said.

Opposition parties claim that the SNP has used its majority in Holyrood to limit committee scrutiny and whitewash their reports.

Ms Davidson said: "In my short time in the Scottish Parliament there have been issues that have arisen.

"It is eminently sensible to have committees, particularly the statutory committees like Public Audit and Finance, being led by opposition members so that true scrutiny can happen.

"There is no suggestion that the people of Scotland want more politicians, and I don't blame them. We don't want a second or revising chamber but that means that the mechanisms of the chamber that we have have to work properly.

"As someone that operates in an opposition party it can be frustrating that your lead spokesmen don't have an automatic right of questioning on their policy area, and that is something that can be enhanced and improved and I think that that will only benefit oversight in the Scottish Parliament."

Cross party campaign group Devo Plus welcomed some aspects of the report, but said more taxes need to be devolved from Westminster.

Chairman Ben Thomson said:

"This report is a welcome addition to the range of proposals being offered by the pro-UK parties to advance devolution. The full devolution of income tax - which has also been proposed by the Liberal Democrats - will make Holyrood much more accountable for raising the money it spends, and therefore it is a positive development.

“We also welcome the commission’s desire to look at devolving housing benefit and attendance allowance, which has also been proposed by Labour’s constitutional commission.

"The report claims that Holyrood would raise around 40% of what it spends. This compares to Devo Plus's proposal that the Parliament raises almost three-quarters of what it spends, and our Glasgow Agreement, which was designed to unite the pro-UK parties around a single proposal, called for it to raise at least half. In comparison, all pro-UK parties have fallen short.

"Whilst we welcome this as a step in the right direction, we believe there is a long way to go to make Holyrood truly accountable in the eyes of the public.

“All three parties supporting Better Together have agreed, following their own constitutional commissions, to a convention after the referendum to review devolving more powers with proper public representation. However, we believe it would now be helpful in the run up to the referendum if the three parties set out a consensus position of the minimum powers they would all guarantee to devolve including full income tax powers, housing benefit and attendance allowance.

“This would give the public confidence that significant further devolution giving Holyrood greater accountability would really happen after a No vote."

However Yes Scotland has dismissed the Strathclyde Commission's report altogether.

Chief strategist Stephen Noon said: "The No parties' offers don't come anywhere close to delivering the extra powers that the people of Scotland want, and more importantly that Scotland's economy and society need if we're to create more jobs and make our nation fairer.

"What the No parties and the Tories in particular are promising is just a decade more of debate about constitutional change. We should actually just take the powers that we need in September, with a yes vote."

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