Lib-Dem Home Rule Commission

The Scottish Liberal Democrats have published the report of their Home Rule and Community Rule Commission – Federalism: the best future for Scotland.

This Commission was tasked to set out the details of ‘home rule’ for Scotland within the United Kingdom, “where we would have control over most aspects of our domestic affairs but still enjoy the protection and strength that come from being part of the United Kingdom”. It builds on the work of the Steel Commission and the Liberal Democrats long standing policy in favour of federalism in the UK.

Unlike some other devolution proposals they do address the constitutional consequences for the rest of the UK. Something the Red Paper also identified as an issue. Otherwise the split of fiscal and general powers is a fairly conventional divide, similar to the Devo-Plus proposals.

The section on local government provides for a stronger statutory status for councils, raising more of their own revenue, free from much of the current central direction. There would also be an optional (by local referendum) new level of ‘burgh’ councils with potentially more powers than the current community councils. However, this recognition of the importance of elected democracy doesn’t fit well with other proposals to allow unelected bodies like housing associations to take over service delivery.

If you put the language of federalism to one side, I suspect there is potentially plenty of common ground here with Scottish Labour. It therefore provides the basis for a possible extended devolution offering from at least two of the ‘Better Together’ parties.

Of course this is only on the mechanisms. There is some recognition of purpose in these proposals around poverty and local democracy. But as you would expect from the Lib Dems, no recognition of the real power structures in our society and certainly no plans to tackle them.

The recommendations include:

  •  Political parties and civic society should progress debate on proposals for a reformed UK constitution, including how purely English matters should be determined and the legal entrenchment of home rule for Scotland.
  •  Some functions of government should constitute a third category – additional to ‘reserved’ and ‘devolved’ powers – namely ‘partnership powers’, which require the co-operation of both home rule and federal governments. The strategic planning of welfare services should be considered for joint working combined with a constitutional duty to tackle poverty through efforts at every level of government.
  • Income tax paid by Scottish taxpayers should be almost entirely the responsibility of the Scottish Parliament. But, Income tax payable on savings and dividends should continue to be levied on a uniform basis across the UK, be deducted at source and a proportion of the UK receipts allocated to the Scottish Parliament.
  • Powers over Capital Gains Tax, Inheritance Tax, Aggregates Levy, Air Passenger Duty for flights from Scottish airports should be allocated to the Scottish Parliament.
  • Powers over the National Insurance system; business, employment and financial regulation; VAT and customs and excise duties should be allocated to the UK.
  • Corporation Tax should continue to be operated and collected at the UK level, but the proceeds raised in Scotland should be assigned to the Scottish Parliament.
  • The remaining funds required to fund the Scottish Government’s annual programme should come from an equalising payment from the UK Treasury including an independent, transparent, needs-based formula to serve all parts of the UK.
  • The borrowing limit available to the Scottish Government to cover cyclical variations in tax revenue should be extended to £1bn to cover shocks to the proposed revenue base of around £20bn. A fiscal pact to define limits on borrowing and fiscal action. All home rule governments under a federal system, should be permitted to borrow for capital investment under the prudential regime.
  • Social protection, pensions and welfare payments should be allocated to the UK, except the Scottish Government should act as the agent for the UK Government in Scotland on much of the work of JobCentre Plus and the Work Programme.
  • Health and safety legislation, competition laws and employment law should be allocated to the UK.
  • Control over the Scottish Parliament’s electoral system and franchise should be allocated to the Scottish Parliament but electoral administration and law, together with the regulation of political parties and their funding should remain a matter for the UK Government.
  • Broadcasting should continue to be regulated at a UK level to reflect a single UK market

The Commission also looked at local government and recommends:

  • Local authorities should raise around half of the money (including business rates) they spend locally in order to improve accountability and local power. Scottish ministers will be prevented from linking local authority funding levels to the rates of council tax and other taxes and charges levied by councils.
  • A ‘One Scotland Fund’, separated from current local government revenue grant, to enable Scottish ministers to award funding to local authorities that require support to tackle multiple deprivation.
  • The operation of a new assessment for the allocation of funding between local authorities should be based on recommendations to Scottish ministers from a new Local Government Finance Commission. Single outcome agreements, replaced by true local community plans where every council takes responsibility for delivering a plan for its area. Get a general power of competence.
  • Re-definition of Best Value that would allow land to be transferred by a local authority to a not-for-profit entity which is providing a public good.
  • A mechanism should be established by which a community can bring forward a proposal for a burgh council to take over certain services provided by the principal local authority in the area.
  • Crown Estate assets and harbour, pier, foreshore and similar rights should be transferred to the control and benefit of local authorities, protected and sustained as ‘common good’ assets that cannot be disposed of.

 

Adding up the figures

John McLaren from CPPR has written a helpful and balanced piece in today’s Scotsman on the public finances of independence. He takes the various claims and explains how they are calculated.

We must start from the understanding that the claims of being £1200 p.a. or £500 p.a. better off, refer to what is spent on us through public expenditure, not individual incomes.

The £1,200 better off figure refers to 2009-10 and relates to the difference between government revenues and spending. It ignores whether or not this extra spending on public services could be funded by equally high Scottish revenues.

The £500 better off figure relates to the latest relative fiscal balance figure for 2010-11 – a year with buoyant North sea oil revenues. This tapers off by 2015-16.

As John McLaren puts it, “The bottom line is that Scotland has a relatively higher spend per head on public services than for the UK and that, post-independence, this could be afforded – but only so long as North Sea oil revenues remain strong.” Oil revenues going forward are subject to a wide range of variables.

Then we have the claim that Scotland would become the sixth most prosperous country in the world, in terms of gross domestic product per person. He is much more scathing about this claim describing it as a ‘red herring’ because it is based again on oil activity, the profits of which often end up overseas, not in our pockets.

He concludes:

“Overall, an important lesson to learn from this analysis is that – as the referendum is a decision on the long-term future of Scotland – it is not very insightful to dwell a single year’s figures. Furthermore, some of the options available, under both independence and some evolution of the status quo, will involve trade-offs rather than pure wins or losses, and this complexity needs to be acknowledged. Interviews with the public suggest that there is a desire for a more informed and nuanced debate than the one we are currently getting.”

Hard to disagree with that!

Scottish Labour Devolution Commission

The inaugural meeting of Scottish Labour’s Devolution Commission was held this morning in Glasgow, to discuss the programme of work and principles of the Commission for the coming months. The Group is expected to produce an interim report which will be debated at Scottish Conference next April.

Red Paper Collective member Jackson Cullinane is a member of the Commission, he said:

“Polls of our members show that they are unconvinced by the case for independence but do not favour the status quo. The labour and trade union movement in Scotland has historically been a movement for devolution and this Commission provides an opportunity to explore the options for decentralisation of powers to give ordinary people a greater say and influence over decisions affecting their lives.”

“I am particularly encouraged that the Commission will reach out to community and trade union organisations, listening to their views, focusing on producing a vision of a more equitable and just Scotland and considering how powers can be best re-distributed to make that vision a reality.”

The Commission will be seeking views over the coming months as to where additional powers and responsibilities should lie, not just those devolved to the Scottish Parliament, but from the Scottish Parliament to local authorities across Scotland.