Alexander says yes to fiscal autonomy

Pat Kane of Scottish Futures has a very interesting post over at OurKingdom on Wendy Alexander’s first press conference as Scottish Labour leader elect.

The old Labour slogan of “Scottish solutions for Scottish problems”
became “Scottish solutions for Scottish aspirations”, explicitly
recognising how the optimistic, democratic-nationalist agenda of the
SNP has tapped into a desire for positive politics, and how Labour
failed when it tried to portray independence as a potential
plagues-of-locusts disaster. More interestingly, in subsequent
discussions Alexander pronounced herself “relaxed” about the
repatriation of broadcasting and media to Scotland, an increase in
fiscal autonomy for the Parliament, and other increased powers picked
out by chapter two of the SNP Government’s  White Paper on Independence. Or at least, relaxed about the “national conversation” around these issues  taking place. (OurKingdom)

The Scotsman has a particularly intriguing account of Alexander’s position on the financial issue:

Ms Alexander said she wanted to "strengthen the financial accountability" of politicians, indicating she supported the transfer of new financial powers to the Scottish Parliament.

Asked directly whether she was prepared to consider fiscal autonomy for Holyrood, she replied: "Yes. We need to look at how politicians are more financially accountable. This has to be a dialogue within the UK."

Ms Alexander has backed increased "fiscal federalism" for Holyrood before.

In 2004, she supported the findings of a paper written by two leading economists for the Fraser of Allander Institute. The paper suggested the Scottish Parliament be given the power to vary tax by 7 per cent across a range of different taxes, replacing the blunt 3p-in-the-pound income tax power which it has at the moment.

The academics also called for the Scottish Parliament to be given control of stamp duty, as well as betting and gaming taxes and possibly corporation tax. (The Scotsman)

The Policy Director of the Fraser and Allander Institute is Alexander’s husband Brian Ashcroft. He is also on the board of the Economic Research Institute of Northern Ireland, which produced a study backing the case for allowing the North to set its own corporation tax rate.

Sir David Varney is currently conducting a review of Northern Ireland tax policy which is widely seen as Gordon Brown’s way of kicking this proposal into the long grass.

Yet the assumption in Scotland seems to be that Alexander has got the nod from Brown for her comments. I would question this. Fiscal autonomy is another threat to his West Lothian balancing act, but he does not have a lot of leverage over Alexander. Her priority has to be establish herself as a credible leader in her own right. The results of undermining Jack McConnell’s flirtation with further devolution were disastrous for Labour, and the lack of an obvious challenger to Alexander means she is surely less vulnerable to such attacks.

Perhaps the Stormont parties ought to consider putting Alexander’s comments to Varney, and indeed to the British government.

It’s beginning to look as if there is a consensus in Scotland in favour of more financial devolution. The Welsh Labour Party is also committed to looking at the issue as part of the One Wales agreement. Those debates won’t be easily sidelined by a Treasury review and Northern Ireland can’t afford to be left behind.

Update:  Pat Kane points us to another  Scottish Futures post which features a video clip of Brian Ashcroft discussing fiscal autonomy.



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