Concerns ProjectFear2 underway as Unionists feel Devo Max heat

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  By G.A.Ponsonby

Concerns have been raised that scares similar to those which peppered the independence referendum campaign are being deployed against Devo Max.

Yesterday a new ‘think tank’ warned that extending devolution to give the Scottish parliament full fiscal autonomy (FFA) would leave a £5bn shortfall in the Scottish budget.

John McLaren, who is a member of Fiscal Affairs Scotland (FAS), has claimed that falling north sea oil revenue will put public services at risk.

McLaren, previously a member of the Centre for Public Policy for Regions (CPPR), said: “The latest oil revenue data brings into focus Scotland’s future fiscal position under different funding scenarios. In particular, the Smith Commission needs to take into account the potential impact of continuing relatively low levels of North Sea revenues on Scotland’s budget, if North Sea revenues are to be part of any negotiated package.

“Our calculations suggest that, across a wide range of assumptions, full fiscal autonomy could lead to a significant shortfall in funding over what the current system delivers.”

Full Fiscal Autonomy is one of the terms used in conjunction with ‘Devo Max’ in order to denote the maximum amount of powers that can be devolved to Scotland under devolution.  Devo Max itself is defined as all powers with the exception of defence and foreign affairs.

The warning from McLaren came just one day after the BBC reported the Institute of Chartered Accountants in Scotland (ICAS) had warned that devolving income tax could lead to “complex” problems.  Both the warnings from FAS and ICAS have been prominently headlined in pro-Union media outlets and have been included in BBC news bulletins.

However concerns have been raised that the warnings are part of a strategy on the part of pro-Union organisations to weaken demand for Devo Max.  McLaren’s warning was included in news bulletins broadcast by the BBC, but the corporation declined to reveal the academic’s background which contains strong links to the Labour party and the UK Government.

McLaren’s background includes:

  • 1999-2001   Special Adviser in the Policy Unit of the Scottish Executive for the First Minister of Scotland
  • 1999   Head of Policy Research at the Scottish Labour Party prior to the 1999 election for the Scottish Parliament.
  • 1989–1998   Civil Servant (Economic Adviser at the Scottish Office government department)
  • 1985–1990   Civil Servant (Economic Adviser at H.M. Treasury)
  • He was a civil servant at both H.M. Treasury (1985-1988) and at the Scottish Office (1989-1998). During this period he had no political affiliations.
  • He worked as a researcher for the Labour Party for a year leading up to the first election (1999) of the new Scottish Parliament, being subsequently appointed as a Special Adviser by Donald Dewar, and then by Henry McLeish, for the period up to 2001.
  • He was a member of the Labour Party from 2000 to 2005. In 2006 John was hired by the Labour Party on a consultancy basis to undertake work leading up to the 2007 election.

[Information courtesy of the University of Glasgow]

McLaren’s connections to the Labour party have fuelled suspicions that his reports are politically motivated.  Along with CPPR colleague Jo Armstrong, he regularly produced reports which cast doubt on Scottish Government claims on the economy.

The report from Fiscal Affairs Scotland coincided with the first meeting of the Smith Commission which has been set up in order to try to reach a consensus on what powers should be devolved to Scotland.

The SNP has insisted it will press for pledges, which included a vow by the three UK party leaders, to be honoured in full.  In the days leading up to the referendum, Gordon Brown and Alistair Darling both promised significant powers, Mr Brown pledged Home Rule whilst his Labour party colleague confirmed in a BBC interview that Devo Max would be granted in the event of a No vote.

Today at Prime Minister’s Questions, David Cameron confirmed that full fiscal autonomy is an option for Scotland, as discussions get underway at the Smith Commission.  Mr Cameron was asked to clarify that full fiscal autonomy to Holyrood is still very much on the agenda following the promises made during the campaign.

At PMQs, Angus MacNeil MP asked:

“Before the Scottish Referendum, the Prime Minister said –’If Scotland says it does want to stay inside the United Kingdom, then all options of devolution are there, and all are possible.’

“So will he unequivocally stand by his promise and confirm this of course means full fiscal autonomy be on the table, meaning that devolving a full control of Scottish taxes and spending to the Scottish parliament to help create jobs and a more just society.”

David Cameron answered:

“I certainly stand by all the promises I made in the run up to that referendum campaign, and I think Lord Smith is doing an excellent job at looking at all the options for devolution. I’m sure we can find a way forward.”

Lord Smith’s recommendations are expected to be made public on or around November 30th.  The deadline for making submissions is October 31st.