Scotland will force Westminster to deliver ‘Devo-Max’ promise

| 24/09/2014 | 34 Comments
A more powerful Scottish Parliament

A more powerful Scottish Parliament

The dividing lines have shifted, but not by much. The result of the referendum represents a blow to those who have campaigned tirelessly for decades. Yet the resilience and determination of those campaigning for a better Scotland has been impressive. Now the challenge is to get the best deal for Scotland. There will now be an even wider coalition who support this.

In a panicked response to the growth in support for independence, Cameron, Clegg and Miliband promised ‘Devolution Max’ by next February. The phrase ‘devolution max’ – which is from the Steel Report and ‘Your Scotland, Your Voice’ report – includes the devolution of all tax and social security powers. Opinion polling after the vote found that 25% of No voters did so for more powers.

Anything less than this will be viewed by the people of Scotland as a failure of Westminster to deliver on the economic powers Scotland’s economy needs. Membership of Yes supporting parties has more than doubled and membership of Business for Scotland also continues to grow.

The growing support for substantial devolution

It will be impossible for Westminster to ignore the growing support for substantial devolution of powers over offshore revenue, energy, industrial and research policy, social security and broadcasting. David Moxham, Deputy General Secretary of the Scottish Trades Union Congress, argues that Westminster needs to go further as it has before. Iain McWhirter argues that the promises made in the campaign can now be expanded to Scotland’s advantage.

There are difficult questions and much work to be done in the mean time. There are practical, economic and electoral considerations – from the prospect of how powers will be delivered to how best to strengthen Scotland’s economy and plans for the May 2015 General Election.

In any case, the pressure is now on Westminster to deliver maximum devolution for Scotland. If they fail, another referendum on independence is inevitable. In the short term, Scotland must unite to gain full control over tax, economic powers and social security required to improve the economy and protect public services.

Tax and borrowing

For Scotland to have financial responsibility a majority of tax income must be devolved.

The Liberal Democrats already recognise that income tax, capital gains, inheritance tax and other taxes should be devolved.

A Devolution Max proposal must include offshore revenue. The Liberal Democrat report by Lord Steel supported this position. Economic think-tank N56 supports moving regulation from London to Aberdeen.

The No Campaign argued that oil revenue was vital to Scotland’s economy. Therefore it makes sense to devolve revenues from the industry to Scotland.  Scotland, with access to this revenue, will ensure a strong financial position and to create a national investment fund for future generations.

Investment and economic powers

Control over economic powers is in many ways more important than control over income sources.

The ability to set industrial policy, research priorities, business innovation and labour market regulation are key components of driving forward a successful economy. The ability to invest revenue streams is crucial to improving Scotland’s financial position, so control over revenue can lead to more investment projects led by the Scottish Government.

The combination of revenue and economic powers can lead to greater support for Scotland’s key sectors – and with this Scotland can create more jobs. Anything short of this position would represent a failure of Westminster to deliver.

Social security

It’s clear that social security support will face major cuts from Westminster. George Osborne has promised £25 billion in spending cuts and Ed Balls has already outlined plans to cut child benefit, means test winter fuel allowance and raise the retirement age. Meanwhile the transition to ‘universal credit’ has plagued the system with turmoil and delays.

The only way to protect the vulnerable and create an effective social security system in Scotland is to devolve its operations.

This must include child and working tax credits, disability living allowance, attendance allowance, housing benefit, income support, incapacity benefit, job seekers allowance and statutory maternity pay.

Scotland runs enterprise policy, social housing and care for the elderly. Control over employment support, housing benefit and incapacity support compliments these operations.

International promotion & recognition

Scotland can expand its international exports through investing in Scotland Development International. Scotland should also receive guarantees of proper representation within the UK Trade and Investment network.

It was previously suggested that Scotland was represented at the European Union on devolved issues. This was proposed by Labour’s Robin Cook. This would allow Scotland to represent domestic interests in areas such as fishing, energy, agriculture and trade.

Broadcasting

It’s clear that Scotland has been consistently short-changed on issues of broadcasting output. The £320 million contribution from Scotland should be reflected in output investment – so that jobs are fairly distributed. The devolution of broadcasting will ensure proper representation of Scotland’s economy, politics and culture to OfCom and create more opportunities in Scotland. Over 21,000 people have already signed up in support of devolving broadcasting.

A military review

The renewal of weapons of mass destruction on the Clyde is now inevitable. Cuts to the conventional military will also continue. In these circumstances, there must be a review of Scotland’s contribution to military spending and what is received in return.

A new conversation

These are only some early suggestions on the progress towards ensuring the best possible deal for Scotland. Tell us what you think and let us know what powers you believe Scotland should have under “Devolution Max”. The new conversation on powers for Scotland has started.

Join Business for Scotland – Sign the business declaration

Tags:

Category: Uncategorized

About the Author ()

Michael is Head of Research with Business for Scotland. A graduate from the University of Glasgow, he has carried out a series of interviews with academics, politicians and the public in Denmark, Iceland and Ireland. Michael's on twitter @GrayInGlasgow.

Comments (34)

Trackback URL | Comments RSS Feed

  1. If they fail our oil fail Devo Max then the 25% will join alegance with the 45% and demand a referendum and this time we won’t be lied too this time we take back Scotland Devo Max or independence due to a breech of the Edinburgh agreement !

  2. Andrew says:

    Westminster needs to give Scotland back the 200 plus sq/miles of sea they illegally annexed returning the maritime boundary to its original location. As it has the Argyll oil fields within.

    • Ivan Bishop says:

      Well, that sea does belong to Scotland and the Scots.

      However, no-one will get to drill there if the Scottish parliament simply BANS all drilling/exploration on ‘environmental’ grounds. Just as California does to dissuade greedy oil prospecting.

  3. Alastair says:

    The irresistible message of the people, only 6% shy of independence, forcing the ‘vow’ to be made. I like to think of this a new era of constitutional enlightenment, which has been driven by Scotland. How will it pan out – well we hope for government to ‘do the right thing’ and devolve the substantial powers in the areas you describe, and satisfy the people. If not, should this fall short and the levers on offer be all but meaningless, and of course there are other major factors such as UK referendum on the EU – well we hope we will be taking independence question back to the 6% sooner rather than later.

    • Donald Hodgson says:

      I hope you do get independence but true independence with an SNP governed Scotland treated by the rUK as an unfriendly foreign country. No social union, a fully controlled border, no dual nationality and no shared currency. The seven to eight hundred thousand Scots could be treated as the aliens they become.
      The Financial Houses based in Scotland with most of their customers in the rUK would have to move their offices to the rUK or cease trading in the rUK. Access to rUK agencies or rUK funding would cease. There should be a exit and entry charge for crossing the border and Scottish motor vehicles should be charged for using rUK roads. The
      list of things the rUK could impose on an independent Scotland is long, and there is very little Scotland could do about it. Any trouble from an Independent Scotland over the maritime border etc then the rUK could just close the border on their side. This would be detrimental to both countries but more so to Scotland.
      The impression I get is no matter what the Smith commission comes up with,the SNP will say its not enough. They will try for independence via the back door.
      I see the result of any divorce is one island with two angry countries on it. The rUK will have a population very anti towards Scotland. If the rUK was so minded it could really give an independent a hard time.

      • Maureen says:

        It would appear that the threats and misinformation continues, based on your ignorance.
        It is clear now, and frankly has always been, that Westminster and the rest of the UK needs Scotland more than Scotland needs them. Or, should I say the revenues and resources of Scotland, as Scotland is merely a cash cow to the Westminster government.
        You really should be careful when you speak for the ‘rUK’ as you put it…as many in several different parts of the UK feel the same despair and resentment towards the UK government.

      • Ivan Bishop says:

        The rUK can build it’s little federation and rot without the protections afforded by the ECHR for all I care.

        They will also negotiate because they will HAVE to.

        Over defence(Faslane)

        Old North sea and Western Scotland oil and gas

        Perhaps water one day.

        Stop worrying, ‘man up’ and think freedom isn’t free.

        BUT subservience is far worse.

  4. Matt says:

    Included in the broadcasting powers should be the option of Scotland to allow application for new commercial & public service broadcasters. Traditional FM broadcasting is still the most accessible. affordable mass medium and multiple markets in Scotland are extremely underserved in terms of listener choice & content diversity. OFCOM’s refusal to license new FM services in Scotland has held back the development of and investment in Scotland centric and local media, and this deficiency should be addressed in devolution agreements.

  5. Andy Lippok says:

    I agree with many of the proposals contained in the previous posts.
    Having read Thomas Picketty’s book “Capital in the 21st Century” one other thing we should be doing is to lobby the EU and all the governments therein to introduce all the necessary mechanisms to enable a proper tax on capital ownership. Picketty outlines in his book a basic format of what this would look like. In this way Europe could begin to redress the iniquity of the increasing gap in wealth and provide much needed funds for a true universalism in social provision. If this is not addressed there is I fear an increasing risk of a backlash from some quarters in society.

  6. Mark W says:

    My comment echos that of Barry R – I was not aware that any of the Westminster parties had offered / promised devo max – the only offer i was aware of was the limited, vague promises & vow about some additional powers relating to tax and welfare. I’m not convinced we can hold them to account for failing to deliver devo max if they didn’t actually offer it.
    And I am concerend that we will have difficulty holding Westminster to account re the ‘additional’ powers that were promised, given that Westminster struggled to define them in any detail at the time. My concern is that they patch some pretty meaningless offer together and Scotland and the UK is then given the impression that Westminster has delivered on the vow. How can we hold them to account when no-one is clear on what they have supposedly vowed to deliver? Seems like Scotland might lose out again!

    • Gordon MacIntyre-Kemp says:

      There is a good article on it on Newsnet – on multiple occasions they said it was Devo Max or close to Federalism and we are pulling together a list of all in examples of that. >> ‘Let’s call it Devo Max’ http://www.newsnetscotland.scot/index.php/scottish-opinion/9787-lets-call-it-devo-max via @NewsnetScotland

      • Mark W says:

        Thanks Gordon, I saw some of these interviews and just assumed that the term ‘devo-max’ was being bandied around by Jackie Bird etc in an attept to overstate what was actually on offer. Having read the newsnet article I now realise what Brown etc actually committed to! During the campaign I was focussing on the potential powers that had actually been proposed by each party in the preceding months, rather than the rash promises made during the campaign. This really is a game changer. thanks!
        Surely this amounts to breaking the purdah?

        • David H says:

          Why has nobody (particularly the SNP) raised the issue of breaking purdah?

          The nice guy approach does not work in politics.

  7. Peter says:

    I’am not jumping for joy at this , I hope they say your getting
    nothing like your asking for. This will indeed open a real can of worms, if they dont deliver the goods then its back to the ballot box for round 2, 🙂 and surly the duped no voters will
    back us up. As they were lied to by the Westmonster mafia.

  8. Barry Rhymes says:

    The article above states:

    “In a panicked response to the growth in support for independence, Cameron, Clegg and Miliband promised ‘Devolution Max’ by next February.”

    Can someone please reference exactly where each of these politicians explicitly promised “Devolution Max” … nb, I do not meant promised in general terms more powers, but explicitly “Devolution Max” during the campaign.

    Thanks

    • Graham says:

      http://www.youtube.com/watch?feature=player_embedded&v=u-7-DHnQiCM

      Yesterday, in her formal speech where she publicly announced her candidacy for the soon to be vacated role of leader of the SNP, Nicola Sturgeon said:

      “Through Gordon Brown’s speaking we were told – with the authority of each of the parties in the Better Together campaign – The promise was clear and it was unmistakeable.

      I quote “This package would be ‘Home Rule’ and something near to federalism”

      “Well, let me say this to Westminster on behalf of Scotland – it had better be.

      “If the UK parties move forward in that spirit, they will have, in me, a willing partner for progress.

      “If not, they will pay a heavy political price – not because I say so but because the people of Scotland will make it so.”

  9. Mary Rice-Johnston says:

    Sorry but nothing short of full independence will work.

    Time to run our own country.

    • Charlie says:

      Here Here!

      • First the parliament at Holyrood must be made permanent,and the powers “given” to Holyrood also be assured as in perpetual.This devolved layer of government is not certain at anytime,for reasons we all know.The article does raise very good points,as do some of the comments.This is the first time we got a say on the union,and I think a lot of folk have had their vision of the union coloured by the media,a claim that it was democratic is not correct.For there to have been a democratic vote then all the information required for a reasoned voting decision,had to be available for all to see.Democracy also requires honesty from all competing sides for a vote to be democratic.I’m not certain enough honesty was displayed,and do any of us really want accomplished liars to be in charge of us?

      • Alan Nicholson says:

        I agree Mary that we need Independence.

        If we don’t get home rule soon then another referendum must happen and we will have an even stronger argument this time.

        If we do get Devo Max (and it better be substantive) we will have huge control over Scotland to improve our social problems and energise our business’s.
        Then imagine asking the electorate, in 15-20yrs time – who wants to go and get the last powers reserved at Westminster – not a big leap of faith by that point.

        For now I’m supporting Devo Max.

    • How could anyone be so happy to hand over all resources, take on London only debts Standing presently at £1.3 trillion. Better Together for whom
      NO THANKS, Turkeys voting for Christmas, More sheep than the clearances. Wee Malta 50 years of independence, has more guts than Scotland the feeble.
      They do not want London back!!

  10. Dr Michael White says:

    Holyrood also needs powers to manage the environment successfully. It is utterly wrong, and incredibly shortsighted, to introduce fracking to the Islands of Britain. Not only does it introduce toxicants into the environment, but it also makes severe demands on freshwater supplies; less of a problem in Scotland, but a disaster in England’s southeast. Nuclear reactors should also be shut down and the very long remediation process begun. This should go hand-in-hand with the development of renewable natural energy supplies.

    An oil wealth fund should be established immediately, with contributions from all those companies extracting hydrocarbon fuels. Whether Westminster follows suit is not our problem, but in a very short time Scotland can accrue a substantial fund for the common good.

    Holyrood and the Scottish people should have a veto on all wars undertaken by the Westminster government. Since the days of the Bush regime, and the criminal activities of that regime and allies, including Blair, the people of Britain have been wasting their tax monies supporting, often illegal, wars and military occupation of sovereign countries. Time for all that to change. It is far better to spend our tax revenues on providing free health care, education, and social justice at home, than to kill innocent folk in other parts of the world.

    All of the comments posted in this discussion should be enshrined in a written Constitution for Scotland, whether England does or not. Thank you.

  11. Jen says:

    I would support:
    1) Oil revenues being allocated to Scotland first for redistribution, and putting at least some of those revenues into an oil fund.
    2) We should also look at whether we tax based on where production activity takes place rather than where the company is domiciled – I believe many oil companies but also eg whisky companies have their headquarters in London, therefore the tax is paid to London rather than to the region where the resource is produced.
    3) We should keep all income and corporation tax raised here, having clear transparent accounts of all monies we “pay” to the UK for services such as defence. This would immediately remove the lie about Scotland being a subsidy junkie or in some way dependent on the largesse of England. A side effect would be that if we manage to not be in deficit, we should no longer be liable for the interest accruing to the WM debt- we should only be responsible for paying back our share of the capital.
    4) We should not only have control over health, but should also be able to conduct our own negotiations over TTIP so as to exclude the NHS from privatisation via the back door.
    5. We know that Trident is not going anywhere but I think it would be worth discussing charging some form of rent for the military use of the Faslane area and its accompanying security risk for the area. That might also make the decision about where it goes or if it needs to be retained easier – at the moment, WM has no downside from using Faslane for storing WMD.

    I think if we were to achieve these goals, we would not need to actually *raise* taxes, which seems to be the offer we have from WM. Being allowed to pay twice for our services is not devolution, it is just being treated as mugs. People who are already writing off any powers being devolved appear to have missed the point. Even if we don’t trust WM to deliver, and even if some of these things will never be granted to us, if we don’t ask, we definitely won’t get. It’s worth asking for everything we would like and being bargained down rather than only asking for what we think they will give us, and then being bargained down from there.

  12. Jackie Harris says:

    All of these powers should be available to Scotland. In addition, the UK should be advised on the enormous waste of resources that Trident represents. However, I would be very surprised if the current Westminster government or its replacement will agree to our terms.

  13. Liz g says:

    They must exempt Scotland’s NHS and Water from the transatlantic trade agreement.
    These are a huge part of the kind of Scotland we want to build and it would be much more difficult to protect or remove them once the have been included

  14. Dave says:

    Nothing less than full fiscal autonomy.

  15. Louise says:

    I really do believe that all VAT and corporation tax (along with the others mentioned in the article) raised in Scotland should stay in Scotland, including a profit based percentage of these taxes raised by larger national and international companies. We don’t neccessarily have to have the power to increase or decrease rates but all revenues from them should be devolved to the Scottish Parliament for budgetary use.

  16. Brian says:

    This fantastic businessforscotland is still right behind getting a better deal for Scotland onwards and upwards people

  17. Bill says:

    The replacement of Trident should not go ahead now that so many of the people of Scotland have made it clear that it is unwanted in our country. This should not be a negotiation, it is the will of the People of Scotland that weapons of mass destruction are not kept in our country, it is not to be used as a trade-off in ANY negotiations! If we are partners in this one sided union then many things have to change. We were never in this union as willing participants and we have been losing more and more of our powers to Westminster, until now, where we have hardly any say in our own country’s affairs and policies. It is an affront to democracy that a country as great as ours has to await hand-outs from Westminster when in fact, we are the largest contributor to these ‘United Kingdoms.’ There is nothing we need England for but they need us to keep exploiting our wealth and resources, which, if we had control over them instead of being looted at every turn, would see us grow very quickly into a major economic power and our wealth would not be squandered as it is at present on phoney wars, WMDs, extortionate salaries for Westminster politicians, the House of Lords, and grossly self indulgent projects across the South East.

    • Andrew says:

      Amen to that!

    • Donald Hodgson says:

      The statement (there is nothing we need England for) is not correct.90% of Scotlands financial industries customer base is in England. 70% of all Scotlands exports go to England. The majority of ships built in Scotland are for the Royal Navy. The largest number of tourist going to Scotland come from England. Remember the goodwill of your nearest neighbour is something not to be thrown away lightly. Also the fact that between 7 and 8 hundred thousand people born in Scotland live and earn a living in England.

Leave a Reply

Your email address will not be published. Required fields are marked *