Labour’s new devo proposals ‘fail welfare test’

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   By a Newsnet reporter

Labour’s Holyrood leader Johann Lamont today unveiled a set of draft proposals for a modest extension to the powers of the Scottish Parliament, but the plans were immediately criticised by the SNP and other pro-independence parties for not going nearly far enough.

The plans, which will be debated at the party’s Scottish conference in Inverness this weekend, foresee the devolution of all income tax, vehicle excise and air passenger duty, but categorically rules out devolving other taxes and proposes that Westminster retains full control of welfare and benefits.

However the proposals have met with fierce opposition from influential sectors in the party.  Last weekend’s Scotland on Sunday quoted several Labour MPs anonymously who insisted that they would boycott the forthcoming Scottish Labour conference over the plans.

Scottish Labour MPs complained that the plan went too far, and said that Ms Lamont had not consulted Labour’s shadow chancellor Ed Balls.  One MP described the proposal as “barking”.

Since Labour will have to ensure the support of its Westminster contingent in order to put the plan into action, the negative reaction from Labour MPs means that it is far from certain that it will ever see the light of day even if adopted by the party’s conference.

Labour’s devolution commission has also said that the income tax plan could be sheleved if administration costs are too high to make it worthwhile.   Labour have also said that they might abandon the plan if Westminster proposes in response to reduce the number of Scottish MPs at Westminster or scrap the Barnett formula which allocates money across the UK.

Pro-independence critics say that powers over income tax would merely give a Westminster government an excuse to cut Scotland’s share of total UK tax revenue, and so the powers would be effectively useless as the Scottish Parliament’s overall budget would still be set by the UK Government. 

The SNP have said that the hugely embarrassing snub from Labour MPs once again proves that only a Yes vote will ensure the transfer of much-needed economic powers to Scotland. 

Recent opinion polls show that an absolute majority of Scots are in favour of the transfer of all tax and benefit powers to the Scottish Parliament.  However Labour’s proposal rules out the devolution of corporation tax, oil and gas revenues, VAT, national insurance, inheritance tax, capital gains tax and alcohol and tobacco duties.

Labour has also categorically ruled out any transfer of welfare and benefits to the Scottish Parliament, meaning that under the party’s new devolution proposal, even if it is adopted in full, Scotland would still be faced with the imposition of the bedroom tax.  Scotland would be unable to adopt a different set of welfare and benefits policies from those of a Conservative UK government.

Labour’s devolution commission said in its report:

“We oppose the Conservative-led government’s welfare agenda, but this does not lead us to the conclusion that the solution is to tear up the welfare state that has served us well.”

Commenting, SNP MSP Annabelle Ewing, who sits on the Welfare Reform Committee, said:

“If today’s reports are accurate then people in Scotland will be wondering why on earth it is taking Labour so long to come up with such a meagre set of proposals. After all this time, they have produced a constitutional mouse.

“The poverty of ambition being shown by the long list of powers Labour has ruled out for Scotland is simply the latest demonstration that they are wildly out of step with the aspirations of people in Scotland.

“As the Scottish Council for Voluntary Organisations (SCVO) are pointing out, 71% of the organisations which responded to their survey want welfare policy devolved – yet Labour’s leadership have closed their minds to this, meaning that iniquitous and destructive measures such as the Bedroom Tax would still be imposed on Scotland, despite over 90% of Scottish MPs voting against it.

“And given that Labour’s own Finance Spokesperson recently accepted that Scotland is not subsidised in any way, it is indefensible for Labour to still want to deny people in Scotland the benefit of our nation’s resources.

“The claim that Westminster’s welfare system ‘has served us well’ simply beggars belief at a time when hundreds of thousands of people in Scotland are facing the brutal reality of the Tories’ welfare cuts.

“If Labour is happy for welfare decisions to be made in Westminster, then they cannot escape the fact that they are also happy for deeply unfair measures like the Bedroom Tax to be imposed on households across Scotland. The parties in the No campaign prefer bad government from Westminster to good government with independence.

“Recent polling has shown a clear majority want all tax and welfare decisions for Scotland to be made by Scotland’s parliament.

“It is only with a Yes vote in next September’s referendum that we will gain the powers we need to shape a tax and welfare system that reflects Scotland’s values, and will enable us build the fairer, more prosperous country we all want to live in.”