Tuesday, December 02, 2014

The Smith Commission Report – a deal among parties, ignoring the greater powers that polls show most people want

The dispute over the Smith Commission report turns on whether additional powers should be decided by negotiations between political parties on what powers they are willing to concede, or the views of the majority of the people of Scotland (1).

The “vow” didn’t refer to Home Rule, Devo Max or federalism, but Gordon Brown did, in widely reported comments in the last few weeks of the referendum. Opinion polls show majorities for devolving far more powers than Smith recommends.

A recent ICM poll found 63% want all welfare powers and  taxes devolved to the Scottish parliament. This would have to exclude Scotland’s share of Defence and Foreign Policy funding, but goes far beyond Smith’s recommendations of only devolving disability and carers’ benefits and the bedroom tax (2) – (3) .

A poll just after the referendum reported by STV found that80% …supported Scotland having control over welfare, with 62% saying it should be in charge of pensions. Almost three quarters (71%) of people back the devolution of income tax while 62% want to see Scotland get control of corporation tax and 61% say Holyrood should be in charge of VAT.’ (4).

Smith only recommends devolving income tax, air passenger duty, the Aggregates levy and the first 10% of VAT. The UK government retains all corporation tax, capital gains tax , national insurance, oil and gas revenues, vehicle excise duty and other revenues raised in Scotland (5).

The UK parties’ argument that the power to set corporation and VAT tax rates couldn’t be devolved as it could lead to different parts of the UK competing to have lower rates was understandable. However their willingness to devolve income tax, which could similarly lead to competitive tax cutting, suggests their motives there are party political.

No UK government has raised the basic rate of income tax in decades because it’s political suicide to do so. It seems likely that, with the SNP having a majority in the Scottish parliament, the UK parties want to force the Scottish government into either income tax rises or spending cuts to try to lose it votes.

And there’s no reason why most of the revenues from income and corporation taxes raised in Scotland couldn’t be assigned to the Scottish government and parliament to decide on how to spend them, while leaving the power to set the rates  of these taxes set by the UK government, and so uniform across the UK.

It would be wrong not to acknowledge that there are a few other positives in the Smith commission. The report recommends the devolution of the power to issue or refuse onshore oil and gas (paragraph 69), which would give the Scottish government the power to block fracking (assuming the Scottish public put enough pressure on it – so far Scottish ministers’ responses on fracking have been very evasive). The power to scrap the bedroom tax and provide benefits for carers and the disabled are important, but they are not close to control over all welfare powers and the budget for them.

The power to allow the public sector to bid for rail franchises (paragraphs 25 to 26, page 21) is positive too, but a long way from allowing renationalisation.

However it’s equally wrong to pretend that the Smith recommendations are anything approaching the “home rule” , “devo max” or federalism which Brown talked of. The usual definition of these is that most domestic policy and most of the budget for it is devolved. Nor do the powers Smith offers come close to the ones polls show most Scots want.

And equally some of the recommended devolved powers are so limited as to be almost non-existent – see those over Crown Estates in Scotland for instance, which allow sweeping exceptions by the UK government on extremely vague and general terms (paragraphs 32 – 34, page 16). Similarly for those over Energy Efficiency and Fuel Poverty measures (paragraph 68).

One telling line is Paragraph 24,  page 13 ; ‘the Scottish Parliament will have no powers over the regulation of political parties (including donations)’.

This indicates a deal in the interest of parties, not voters. The major UK political parties rely heavily on donations from banks, hedge funds, big firms and the super-rich – particularly the Conservative party.

It also ensures no requirement for more internal democracy within all political parties in Scotland. So Miliband can keep imposing his policies on the Scottish branch of his party.

One month was long enough for horse-trading between the main UK parties on what level of devolution they’d tolerate. It wasn’t long enough to receive or read submissions from thousands of members of the public. Nor should we be presented with a take-it-or-leave-it package decided only by parties. Opinion polls and consultations, and/or a second elected constitutional convention, could be used to draw up a list of possible additional powers, with a multi-question referendum allowing voters to vote for or against each.

Brown might want Scottish politics “reset” with constitutional issues labelled “dealt with”, but opinion polls suggest many voters disagree (6).

Opinion polls suggesting a massive rise in the SNP vote in the next General election, combined with those on additional powers, may force the next UK government into offering considerably more devolved powers than the Smith negotiations resulted in (7).




(1) = https://www.smith-commission.scot/ and https://www.smith-commission.scot/wp-content/uploads/2014/11/The_Smith_Commission_Report-1.pdf

(2) = STV 30 Nov 2014 ‘Poll finds majority want Holyrood to control all taxes and benefits’,

(3) = https://www.smith-commission.scot/ and https://www.smith-commission.scot/wp-content/uploads/2014/11/The_Smith_Commission_Report-1.pdf , paragraphs 42 – 54, pages 18 - 19

(4) = STV 21 Sep 2014 ‘SNP on course to win third Holyrood term, according to new poll’,  http://news.stv.tv/scotland/292917-snp-on-course-to-win-third-consecutive-holyrood-term-says-new-poll/

(5) = https://www.smith-commission.scot/ and https://www.smith-commission.scot/wp-content/uploads/2014/11/The_Smith_Commission_Report-1.pdf , paragraphs 75 - 92, pages 23 - 25

(6) = BBC News 29 Nov ‘Gordon Brown calls for Scottish politics 'reset'’, http://www.bbc.co.uk/news/uk-scotland-scotland-politics-30256101

(7) = Guardian 30 Oct 2014 ‘Labour faces massive losses to SNP at UK general election, poll shows’, http://www.theguardian.com/politics/2014/oct/30/scottish-labour-snp-general-election-poll

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