Labour’s proposals for Scotland after the referendum betray divisions within the party

Scottish Labour leader Johann Lamont launched an awkward compromise. David Cheskin/PA Archive

The publication of the Labour Party’s Devolution Commission leaves the Conservatives as the only significant pro-union party yet to declare what further devolution it would consider in the event of a no vote in September.

The big-ticket items in the commission’s report are:

  • Extending the plan in the 2012 Scotland Act, due to come into operation in 2016, to give the Scottish Parliament greater control over income tax bands.

  • Housing benefit and attendance allowance to be devolved; along with powers over things like elections, health and safety and employment tribunals.

  • Stronger powers of local government in Scotland including devolving the UK Work Programme and Scottish Parliament’s training and skills duties; new economic development powers; and potential reform of council finance.

  • Scottish Parliament to be constitutionally entrenched so that it could not be dissolved by the UK Parliament.

The proposals are the latest in a growing list of reports by different pro-union voices arguing for further-reaching devolution, including the Devo Plus Group in May 2012; two reports by the Scottish Liberal Democrats in October 2012 and earlier this month; and finally the Institute for Public Policy Research (IPPR) in January 2013 and last week.

The Labour proposals share much common ground with these others, but there are significant nuances and differences. One eye-catching example concerns local government, including “level-hopping” devolution of some powers direct from Westminster to local authorities, bypassing the Scottish Parliament. There is some political point-scoring here about the perceived centralist approach of the SNP Government, but this does look like a quite radical decentralising agenda.

The proposals on further devolution of policy powers are on a wider front than the other pro-union groups, but less extensive in what will no doubt be seen as the core field, welfare devolution. The proposals on constitutionally entrenching the Scottish Parliament appear now to be pretty much a consensus position across the pro-union camp.

Common purpose

The other clear difference is in Labour’s strong emphasis on the purposes of union. It strongly echoes Gordon Brown’s recent intervention on the need for the UK Government to retain powers – and for the UK and Scottish governments to work together – to secure pooled resources and purposes across the union. It emphasises the need to pay for these common purposes by common contributions through to UK taxes and its flipside – only a modest level of additional tax devolution.

Gordon Brown made a rare return to front-line politics to intervene in the independence debate earlier this month. Downing Street, CC BY

It is striking that the Commission starts its consideration of tax devolution – unlike all the other reports – by specifying that 60% of Scottish government funding ought to be covered by a UK-level block grant, funded by the UK-wide taxpayer to “secure key UK social rights” in Scotland.

The approach of the others is to develop criteria to explore how much Scottish Parliament spending ought to be covered by tax decisions of the Scottish Parliament. They look at each tax against these criteria on a case-by-case basis and then add up the findings. Devo-Plus comes out with a figure of 66% of Scottish Parliament spending covered by its own tax revenues, IPPR about 60% and the Liberal Democrats about 55%.

The 40% being proposed by Labour’s Commission is not much more than the one-third or so of Scottish Parliament spending that will be covered by the tax powers devolved in the 2012 Scotland Act. The comparative modesty of this is striking (and it extends to the possibility of variation across bands – all the others propose full control of income tax and implicitly the ability to lower, and not just raise, upper band tax rates as the Commission proposes).

That Labour lags the pro-union consensus here signals its need to secure compromise between devo-enthusiasts and devo-sceptics within the party. It appears unable to embrace further-reaching tax devolution with the same enthusiasm as other pro-union forces. That internal compromise surely also underlies its more vigorous articulation of the common purposes of union.

Despite the novelty of its Commission’s proposals in other areas like local government reform, Labour may well end up – and will likely be depicted as such by its opponents – as reluctant devolutionists, perhaps lagging behind even the traditionally devo-sceptic Conservatives in their embrace of further devolution.

That we shall be able to assess when the final set of proposals on further devolution – those of the Conservatives’ Strathclyde Commission – are unveiled in May.

A longer version of this piece has been published on Edinburgh University’s Future of the UK and Scotland site