Brown’s three stooges at Holyrood

Wendy Alexander may be under intense pressure to step down over the Labour donations row, but that didn’t stop the Tories and the Lib Dems falling in behind the Scottish Labour leader at Holyrood yesterday.

The three parties united to push through a proposal for a constitutional commission that would consider new powers for the Scottish Parliament, in a rival process to the Scottish Government’s National Conversation.

Two important flaws in the tripartite plan were pointed out by Green MSP Patrick Harvie:

Wendy Alexander says that the SNP should not push its own agenda,
but the remit of the proposed commission deliberately restricts its
work and binds its hands, while calling it independent. If it were to
be an independent commission, it would be given a free hand to consider
all the options. If it were genuinely to seek to generate the broadest
debate, it would be inherently inclusive. If it were genuinely to
attempt to find common ground, it would welcome into its discussions
every strand of political opinion.
            

There is another
problem with the motion—the lack of any mention of a referendum. There
is a well-established principle that major constitutional change should
be put to the people for a vote. Beyond that, we should take care when
we consider some of Wendy Alexander’s comments. She said that the
Parliament was a fitting tribute to the efforts of those who campaigned
for it and that many people in Scotland take pride in it, but we should
be careful not to overestimate the esteem in which the Parliament or,
indeed, our entire political culture is held by the public. It would be
wrong for Scotland’s constitutional future to be determined by
politicians alone or by commissions that we appoint. It should be
determined by the people in a vote, which should include all the
options. (Scottish Parliament)

It remains to be seen whether the three unionist parties can reconcile their different aspirations for devolution in practice.

Brian Taylor’s account of the settlement envisaged by Alexander and Des Browne suggests it could be a troubling prospect for Scottish voters:

On finance, she indicated that Holyrood should be less reliant on
the block grant. That would mean reverting to the original Convention
plan of assigned revenues – which was sidelined in the final version.

Under that system, cash raised in Scotland through particular taxes
is retained in Scotland – instead of being sent to the Treasury for
subsequent disbursement.

But there were limits. Ms Alexander was sceptical as to whether, under EU rules, Scotland could vary VAT or corporation tax.

They might be partially assigned – but Scotland could not alter their rate. (BBC News)

Assigning revenues without tax-varying powers is the worst of all possible worlds. Scottish finances would still be controlled from Westminster, just in a more arbitrary way. It would effectively mean abolish unionist fiscal solidarity, but retaining unionist fiscal authority.

The most absurd aspect of Alexander’s argument is that if the Scottish Government were financed through assigned revenues, the main objection to tax-varying powers under EU rules would be removed.

Further, she offered a vigorous nod in the direction of those in England who complain that Scotland is over-funded.

Naturally, she did this subtly, stressing the requirement to be
“fair to all parts of the UK.” But she was promising a needs
assessment, presumably instigated by the Treasury.

I have long argued that such a needs assessment, perpetually desired
by the Treasury and repeatedly resisted by Scottish Secretaries and
First Ministers, will happen eventually.

But we should not pretend that it would be anything other than a
challenge to Scotland. Unless a vigorous defence could be mounted,
Scotland would be likely to lose funding.

That might be right, it might be fair – but it would be a tough exercise.

Presumably any needs assessment would also have implications elsewhere. Wales might expect to be a net beneficiary, but I can’t see Northern Ireland coming out of any review better off.

Gordon Brown’s speech to the Newspaper Society this week suggests that tax-varying powers are off the agenda in the North as well:      

  Gordon Brown last night indicated he is unlikely to back down over a tax cut in Northern Ireland as he insisted a package of incentives could make the
  province as competitive as the Republic.   
   
   
   
      

  The Prime Minister said there was a number of ways to encourage investment
  in the province without cutting corporation bills to 12.5%.

  It came as the Treasury prepares to release the much-anticipated Sir David Varney review of taxation in Ulster, which leading businesses figures hope will mean exemption from standard UK rates.

  Mr Brown said: "I think we could make Northern Ireland as competitive as the south through incentives." (Belfast Telegraph)

Brown’s emerging strategy seems to be to concede the minimum of new powers to the devolved administrations while imposing a financial squeeze to buy off English discontent. Whatever else this is, it surely isn’t a recipe for killing nationalism stone dead.