Gordon Brown: Scotland should not be given fully devolved tax powers

Gordon Brown today suggested that corporation tax should remain to be set at Westminster and for Scotland to raise 40% of its income as part of his calls for greater devolution of power.

National Insurance would also be best decided at Westminster said Brown, who recommended that only limited powers of taxation be passed on to Holyrood in the event of a No vote.

His proposals have been fiercely criticized by deputy First Minister Nicola Sturgeon, who has questioned why the former Prime Minister failed to implement any of these proposals during the his ten year tenure in Westminster.

Brown was speaking in Glasgow today ahead of a tour of Scotland to advocate the union, and suggested six constitutional changes to devolve power, including the permanent status of Scottish parliament as part of the United Kingdom.

His idea to “make for a better relationship between Scotland and the United Kingdom to turn what I could call a centralized system of power to one where there is power sharing” will not appease the nationalists, however, with his plans falling well short of full powers of taxation and welfare.

Instead, he put forward plans for the Scottish parliament to have the power to vary income tax by 15p in the pound as opposed to the current level of 10p set to come into force. The first 5p in the pound of income tax would remain set within the corridors of Westminster, however, with Scotland responsible for raising 40% of its future budget.

“There should be scope for devolved taxation to raise something like 40 per cent of the Scottish Parliament’s expenditure. As we note above, the tax freedom available to the Scottish Parliament is presently very limited – only 12 per cent of its spending – and under the Scotland Act 2012 that figure will rise to around one-third.

“To raise the money that is equivalent to the cost of non-covenanted services – about 40 per cent of its budget – the best way forward is to widen the Scottish Parliament’s power to vary the income tax, which is currently 10 pence, to 15 pence.”

Devolved powers to Scotland would involve pooled resources to strengthen areas of the Scottish economy, including health and education, where Scotland is already in charge of spending:

“Within the social union of the United Kingdom, not only should UK taxes provide directly for redistributive welfare benefits such as the old-age pension, but we should also pool and share sufficient resources across the UK to ensure that the devolved administrations and the UK government can provide, on a common basis, for the key services of the UK welfare state – the right to free health care, and the universal right to education.”

“Whether you are Scots, Welsh, English or Northern Irish you have the right to a pension when elderly, help when unemployed, sick or disabled, universal free health care and basic education.”

Deputy first minister Nicola Sturgeon was quick to attack Brown’s proposals, questioning the authenticity of his desire for devolution, given his inaction during his time as Prime Minister:

“[Gordon Brown] was prime minister for a number of years, he was in government for more than 10 years, and didn’t deliver the powers that he is now saying he thinks Scotland needs. That underlines the point that the only way that we can secure new powers, and the new powers that Scotland needs to meet the challenges we face, is to vote Yes in referendum and support independence.”

SNP’s media spin doctor Kevin Pringle was equally dismissive of Brown’s speech:

Brown’s speech today comes as one part of a wider, concerted cross-party effort from Westminster to put on a united front about devolving powers in the event of a No vote come September.

However, with the parties unable to agree on just what powers, and to what extent, they are willing to devolve to the Scottish parliament, voters are being left with yet more uncertainty as to what the future would hold for a Scotland that rejected independence.

Better Together spokesperson Ross MacRae on cross-party devolution front:

Just this month Scottish Labour announced grandiose plans to back the devolution of key welfare and tax powers to Holyrood in an effort to give undecided Scottish voters more confidence in a No vote.
Despite its unified façade, however, there are deep fault lines within the party regarding the issue, with senior sources admitting that the party are split about the fully devolved powers of income tax.

Any less than full devolution of income tax, as recommended by the party’s Devolution Commission, would be pounced upon by the SNP as a U-turn in Labour policy indicating a lack of commitment to achieving devolved powers.

The Scottish government have previously stated that any measures of devolution that fall short of full powers on taxation and welfare would represent a failure to the people of Scotland in the event of a No vote, and would see a perpetuation of the social inequality handed to Scotland as a result of governments they never voted for.

Eddie Nisbet

Twitter: @eddienisbet

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