Labour claims on extent of Devo-plans challenged by experts

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  By Chris Rumbles
 
Labour’s claim that the party’s Devolution Commission proposals will allow the Scottish Parliament to raise 40 per cent of its expenditure have been challenged by an economic think tank.
 
Edinburgh-based Reform Scotland, a right-leaning, free market public policy institute, used the recommendations for greater devolution in the commission’s final report and applied them to the latest (2012/2013) Government Expenditure and Revenue Scotland (GERS) figures.

Reform Scotland said its analysis highlighted how under Labour’s plans the Scottish Parliament would only raise 26.18 per cent of what it spends which, it said, was an increase of less than five per cent on what will result from the Scotland Act 2012.

Entitled ‘Powers for a purpose’, the report from Labour’s Devolution Commission states that the 40 per cent would be raised by the extra £2 billion it says an additional 5p in income tax would generate.

The analysis conducted by Reform Scotland also included the commission’s suggestions that the funding of Housing Benefit (£1.7bn) and Attendance Allowance (£480m) be devolved also.

Chairman of Reform Scotland and member of the Devo Plus group, Ben Thomson, said:

“Labour’s proposals increase the Scottish Parliament’s tax-raising powers by less than 5%, and represent only 26% of Scottish Government expenditure, which falls well short of the 40% they are claiming.

“The report is clearly motivated more by short-term referendum politics than a real desire for significant further devolution.”

Among some of the other recommendations of the commission are making the Scottish Parliament legally ‘indissoluble’ by its inclusion in the UK constitution, enabling the Scottish Parliament to have full administrative control over its own electoral system and retaining the Barnett formula as the funding mechanism for Scotland’s public services.

Deputy First Minister Nicola Sturgeon said Labour had an ‘obligation’ to now present the detailed workings to support the commission’s recommendations.

She said: “It is becoming clearer by the hour that this incompetent report falls far short of the powers Scotland needs.  It adds to Labour’s embarrassment that this new independent analysis shows that the party leadership got their sums wrong.

“Reform Scotland confirms that Labour’s watered down proposals would see 80 per cent of Scotland’s tax revenues remaining in Westminster’s hands.  It would also see 85 per cent of our welfare budget controlled by Westminster.  With UK cuts threatening to push up to 100,000 more children into poverty by 2020, we can’t take the risk of leaving these powers at Westminster.”

In a blog post on futureukandscotland.ac.uk, politics professor at Strathclyde University John Curtice wrote that Labour’s prospectus was by no means one that saw Holyrood assuming primary responsibility over welfare and tax.

Analysing the report he wrote: “On the face of it Labour’s proposals for more devolution would appear to fall well short of what might be required to convince voters that a No vote would be followed by the kind of enhanced devolution that a majority of people in Scotland would apparently like to see.”

YouGov surveys for The Times carried out in September 2013 asked people who they thought should have power over ‘taxation’ and ‘welfare and benefits’.  53 per cent of respondents said taxation should be under Scottish and not UK government control while 56 per cent said the same should apply to welfare and benefits.