• STV
  • MySTV

Labour calls for Scotland to have more powers to tax the rich

The party has unveiled the long-awaited findings of its devolution commission in Edinburgh.

Johann Lamont: Scottish Labour leader

Scotland should control two-fifths of its own revenues with the power to raise taxes on the rich, according to Scottish Labour.

The party has unveiled the long-awaited findings of its devolution commission in Edinburgh.

The Scottish Parliament should raise around 40% of its own revenues, around £2bn more than the most recent Scotland Act.

The Scotland Act will give Holyrood control over more tax raising powers in exchange for a 10p in the pound cut in the block grant, but Scottish Labour believes this should be extended to 15p - giving Scotland control of three quarters of the basic rate of income tax.

Holyrood should also have the powers to increase the higher rates of income tax, giving it the ability to tax richer citizens more, it said.

However, there will be safeguards to prevent Scotland launching a tax competition with the UK by cutting top rates. Top rates may only be cut if all rates are cut, Scottish Labour leader Johann Lamont said.

Scottish Labour proposes to make the Scottish Parliament indissoluble by Westminster, with control over the administration of its own elections.

The Barnett Formula, which is currently used to calculate Scotland's share of the UK block grant, should remain the funding mechanism for public services but it should be adjusted to take account of Scotland's new tax raising powers.

Welfare and skills should be devolved to local authorities, with Holyrood providing "strategic oversight", housing benefit should be devolved to permit MSPs to abolish "the bedroom tax", and the power of the islands should be extended.

Scotland should have its own Health and Safety Executive, employment tribunals, equalities legislation and consumer advocacy.

And it suggests that Holyrood should have wider powers over the railways in order to create a "not for profit" service.

The new tax system would allow Holyrood to raise income and property taxes for the rich without hitting poorer people to avoid the creation of a Scottish "tax haven", Ms Lamont said.

Scotland would keep all of its MPs to take decisions on "the big issues" like monetary policy, defence and foreign affairs. She acknowledged that the proposals have caused "an argument" amongst some members, but said Labour is now "committed to these proposals at every level".

The Conservative Party are unlikely to back Labour's "progressive vision on taxation", she said, but she urged other parties to continue the spirit of Better Together and find common ground.

The Liberal Democrats have published two reports calling for more powers. Former leader Sir Menzies Campbell is trying to build a consensus on devolution amongst the pro-Union parties, while the Lib Dems continue to favour federalism for the Scotland and the rest of the UK.

The Scottish Conservatives have tasked party grandee Lord Strathclyde with considering the Tory position on devolution and recommending changes.

Prime Minister David Cameron gave his backing to more fiscal powers for Scotland during his speech to the Scottish Tory conference in Edinburgh on Friday.

Scottish Labour will "not force an agreement to get past September", she said.

Speaking at a press conference in Edinburgh, Ms Lamont said: "A Scottish Government can make the system fairer, reversing Tory tax cuts for the rich. The measures ensure that if the Scottish Government wants to cut tax for the rich, it must cut tax for all.

"At the same time, if we wish to make sure that those with the broadest shoulders should bear the greatest burden, you can raise tax for the richest while retaining the same basic rate for all. We intend to reform the property tax system to ensure that the richest pay a fairer share.

"I've heard people saying that people will end up fleeing the country because of the tax policies. All of the evidence is that economic growth is limited by higher levels of taxation, but a low tax economy does create greater inequality. My aspiration is that Scotland should not become a tax haven."

She added: "In terms of buy-in, the Labour Party at every level is committed to this proposal. Our local government colleagues in particular are excited about the way in which they, as engines of change at a local level, are going to be given more power. Where there is an argument, it is because these are really important issues.

"If we wanted to do something easy to get us past September we could have done that six months ago. This is a really serious piece of work, and of course people are exercised by it. If there is an energy and debate about this, it's precisely because we're trying to work out where that balance is and I think we've got the balance completely right."

She continued: "I would hazard a guess that the Conservative Party would not necessarily support our progressive vision on taxation. This is our vision for the Scottish Parliament. Separately from that, we have put party interest to one side to come together in the defence of the UK in the belief that Scotland can be stronger and it's possible to work with our partners, friends and neighbours across the UK.

"Where we can agree, we shall, we will not turn our faces away from it, and we will not force an agreement in order to get past September because that would be bad faith. I think we can perhaps agree around issues of representation, or whatever."

Deputy First Minister Nicola Sturgeon welcomed the Better Together parties' commitment to more powers but said "there is no guarantee that any new powers would be delivered".

Scottish Labour's "watered down" devolution proposals are "more about a power struggle within the Labour Party" than about more powers for Scotland, she said.

"The threat of a boycott from Labour's hard-line anti-devolutionist MPs, upon whom Ms Lamont would rely to pass the necessary legislation, has won the day," she said.

"Labour have also opened the door today for Westminster to slash Scotland's budget in the event of a No vote, through unspecified 'adjustments' to the Barnett Formula. The expectation was that the report would recommend fully devolving income tax and possibly air passenger duty, which was first recommended by the Calman Commission way back in 2009. However, these pledges have all been ditched.

"And despite briefing heavily that Scotland is to become more responsible for welfare, one of the areas where Westminster is causing the most damage in Scotland, today's proposals will leave Westminster in control of around 85% of welfare spending in Scotland. The limited tax powers in the 2012 Scotland Act will see 16% of taxes raised in Scotland devolved by 2016.

"Where their interim report proposal would have increased this figure to 29%, today's watered-down proposals reduce this to only 20% - in other words, Labour are proposing to devolve only four per cent more than what Scotland is already getting. There are no proposals to create jobs, no proposals to tackle child poverty, and no proposals to grow the economy.

"If this report marks the limit of their ambitions for the Scottish Parliament, it says it all about the ambitions of Scottish Labour for the people of Scotland."

Ben Thomson, chairman of the Devo Plus campaign which has campaigned for further devolution, described Labour's proposals as "extremely disappointing".

He said: "After the progressive ideas contained in the Commission's interim report, the final report is a watered-down compromise which represents nothing more than a tinkering of the tax powers contained in the Scotland Act.

"This is a lacklustre effort which is motivated by referendum politics rather than doing what is best for Scotland. It is designed primarily to combat Yes campaign attacks on the so-called bedroom tax, and to shore up support for the No campaign amongst Labour's core vote. The proposals will do little in the drive to give Scotland a more responsible and accountable Parliament fit for the future."

Yes Scotland chief executive Blair Jenkins said: "The Labour leadership's half-hearted and grudging offer of further devolution is a major retreat from what was being proposed in the interim report just a year ago, and a major victory for those at Westminster who, for their own self-interest, are implacably opposed to handing over any more powers to the Scottish Parliament."

He urged home rule supporters who had been waiting for Labour's offering to vote Yes to guarantee more powers for Scotland.

"Everybody now agrees that change is needed but it is now clearer than ever that the kind of change we really need can be achieved only by voting Yes and putting Scotland's future in Scotland's hands," he said.

SNP MSP Bruce Crawford said: "Labour's proposals are inadequate, but there is now a consensus that is good to have tax and welfare powers in Scotland and the only way to get them all is to vote Yes."

Scottish Green co-convener Patrick Harvie said: "This effort by Labour is a massive failure to seize the opportunity the referendum presents. Whatever side you're on it's a chance to think big and redefine Scottish self-government. Instead Johann Lamont and her colleagues have chosen to tinker at the edges of a broken system."

One account. All of STV.

This field is required. That doesn't look like a valid e-mail format, please check. That e-mail's already in our system. Please try again.
ShowHide
Forgot password?
This field is required. This must be at least 6 characters long. Did you enter your details correctly?
If you've forgotten your details then use the 'Forgot password?' link.
Need to reset your password?

We'll send a link to reset your password to

We've sent you details on how to reset your password

Please check your email and follow the instructions.

Forgotten your email address?

Have you forgotten the email address that you previously joined with? Don't worry, by emailing enquiries@stv.tv we can help.

One account. All of STV.

This field is required. Please enter at least 2 characters
This field is required. Please enter at least 2 characters
This must be at least 6 characters long.
ShowHide
This field is required. This must be at least 6 characters long.
You must be over 16 to join STV.
This field is required. This doesn't appear to be a valid date
We need this to check that you live in an STV region.
This field is required. This doesn't appear to be a valid postcode
Would you like us to email you about our great shows and services from time to time?
We'll only send emails we think you'll like (see example) based on information you have supplied and shows you have watched on STV Player. For details on emails and advertising, see our STV & You page.
Would you like to receive emails from the Scottish Children's Lottery about draws, instant games and competitions?
We support the Scottish Children's Lottery (SCL), which is managed by our colleagues at STV ELM Ltd. You can find out more about the SCL on its website, including its Privacy Policy.

By continuing you agree to our Terms of Use, and understand our Privacy and Cookie Policies.

Upload Profile Picture

Please make sure your image is under 2mb in size and a valid JPG, PNG or GIF.

Are you sure?

Unfortunately, you'll be unable to access our premium content. We’ll be sorry to see you go, but if you change your mind you can rejoin us at any time.

Please verify your STV account

Please verify your STV account using the email we sent you. If you have lost the email, we can send you another one, just click the button below.

Thanks

We've sent you a new verification email.
Please check your email and follow the instructions to verify your account.

Welcome to STV
Thanks for joining us.

Oops!

Sorry, you must be at least 12 years old to place a vote for your Real Hero.

Please review our Voting Terms of Use for more information.

Oops!

Sorry! It seems that you are using a browser that is incompatible with our voting service.

To register your vote please copy the below URL in to your regular mobile browser. We recommend Google Chrome, or Safari.

http://shows.stv.tv/real-heroes/voting

Oops!

Sorry, you seem to have already voted in this category.

Thanks for voting

Now share your vote with friends on your social network

Share on twitter Share on facebook

Cast your vote

Please register or sign in to continue.

Cast your vote

This field is required. This doesn't appear to be a valid date

Cast your vote

Please fill out this form to cast your vote. As you are under 16 years old you will not create an STV account. Why do we need these details?

This field is required. Please enter at least 2 characters
This field is required. Please enter at least 2 characters
This field is required. That doesn't look like a valid e-mail format, please check.
Location This field is required.
Parental Consent This field is required.

That's you. All that's left is to click the 'Submit Vote' button below. By doing so, you confirm that you and your parent or guardian have read and accept our Voting Terms of Use, Privacy Policy and Cookie policy, and that the details you have entered are correct. We'll look after them as carefully as if they were our own.