“Devolution is what Scottish Labour does” – my latest on Labour List (with thanks)

Herbert Morrison once said that “socialism is what the Labour Party does.” 

In other words, Labour is a party of pragmatism, and there are few of us who have been around longer than 20 years who does not remember tedious discussions with all sorts of ideological comrades being decried for that position. However, an emphasis on what works best, and not being beholden to any greater wisdom or theory has since then been shown to be the best way forward in national and local policy making. This is what we expect from Labour policy makers.

In contrast, when a Liberal Democrat grandee produces a document, we have other expectations. Inevitably, it will be praised for its elegance -either in its prose or the logic of its ideas – in the manner of Roy Jenkins’ proposals for electoral reform (“AVplus”) or indeed Sir Ming Campbell’s  Declaration of Federalism. The next expectation is that it will go un-noticed by the general public then be forgotten even by the politically involved.

So it is refreshing to see Morrison’s legacy enshrined in Scottish Labour’s proposal for further devolution Powers for a Purpose. Above all, this promises that extra powers for Holyrood will not be dictated by any contrived political high ground other than the utilitarian philosophy of “how can we make government work better for Scotland.”

So it sets out the areas which can be best exercised at Westminster on behalf of Scotland:   monetary policy, currency, regulation, debt management and employment law, without which a single economy (or indeed currency union) is not possible; foreign affairs (including international development) and defence; the core of the Welfare State – above all the universalist issue of pensions and most cash benefits; and the constitution.

The Barnett Formula would stay intact. There are also proposals for intergovernmental arrangements and entrenchment of the status of Holyrood.

It also sets out new areas of devolution to be exercised by Holyrood: above all, on a calculation that health and education as 60% of expenditure are best funded from UK resources  (including taxation of the metropolitan ultra-rich) the remaining 40% should be subject to Scottish control.

This means that Labour would raise the level of income tax set by Holyrood to 15p in the £, with 5p being set by Westminster. In addition, Labour would give the Scottish Government the power to vary the higher rate of Income Tax with the condition that it could only be reduced if the Standard Rate is also brought down.  

In terms of the use of that revenue, Labour would add to the devolved settlement  a number of Welfare Benefits: Housing Benefit, Attendance Allowance, as well as administration of fairness at work issues: Health and Safety, employment tribunals, equalities, and consumer protection.  It is also proposed that legislation be changed so that Scotland could choose to take its railways into a “Not For Profit” form of ownership. Holyrood would also have control over its own elections, in what looks like a tidying-up exercise.

Powers for a Purpose also lives up to its name by looking beyond Holyrood, and recommends “Double Devolution” of powers to local authorities. This is an explicitly political proposal, which seeks to seize some political initiative along the lines of “the SNP wants to give more power to Holyrood, Labour wants to give more power  to the people of Scotland.”

In between these “Westminster only” and “Holyrood only” proposals is a large grey area of powers and responsibilities which could be devolved, but which the Commission has decided should be retained: immigration; drugs, drug trafficking etc.; betting, gaming and lotteries; broadcasting; the civil service; and abortion and analogous issues. To this can be added taxation which might be possible to devolve, but which it is proposed should be retained: VAT, national insurance contributions, air passenger duty,  corporation tax, alcohol, tobacco and fuel duties, climate change levy, insurance premium tax, vehicle excise duty, inheritance tax, capital gains tax and tax on oil receipts should remain reserved (with a derogation to allow a lower rate of fuel duty to be charged in remote rural areas.)

It is these areas of “could but won’t” that most controversy is likely to occur, and it easier to see the immediate rationale in some examples than others. Two legislative examples are drugs policy and abortion. Drugs are major issue which affects devolved responsibilities such as health, law and order, and education – why not devolve the issue to Holyrood? Likewise, abortion: Holyrood already deals with end-of-life issues – so why not beginning-of-life issues too? Two taxation examples are air passenger duty and alcohol duties. To devolve air passenger duty would be a valuable tool for tourism and island communities. Holyrood control of alcohol duty could mean increased revenue from the minimum unit price of drink (rather than extra profits for retailers.)

It is easy to think that the Devolution Commission has left some of these powers in its locker for future use, if necessary. No doubt some of them have good technical reasons for retaining at Westminster, and there are obvious candidates where this is obvious, including not only VAT and NI, but also Corporation Tax (much coveted by the SNP as a pro-big business sop) and inheritance tax (to avoid cross-border avoidance.)

On the other hand, a realist might see that Holyrood control of some of the grey areas might be just too much trouble. It is likely that religious and other anti-choice groups would demand an annual abortion debate: and that drugs campaigners will seek to liberalise or get tougher according to whatever headlines prevail. Likewise, no level of APD would be low enough for Michael O’Leary or Sir Richard Branson, so there would be constant campaign for its abolition. Holyrood would find it difficult to balance the wishes of the Scotch Whisky Association with those of the health experts.

So what are we to make of Powers For Purpose?

It is not elegant, and it is not part of a greater commitment to any ideology; it has not been drawn up as a step towards independence or even federalism. These are not Labour’s policies, and it is therefore entirely mistaken to judge its proposals by the yardsticks of these other objectives.

Instead, it is a set of non-ideological  proposals, designed to improve the governance of Scotland by devolving a further set of responsibilities both to Holyrood and from Holyrood to local councils and communities. Its outcomes are is unlikely to be perfect but nothing is unimprovable, above all in public policy. However its proposals are based on pragmatic utilitarian principles, and if enacted, they will achieve its intended ends .

Herbert Morrison would probably approve  of  Powers for a Purpose, and indeed it may have coined a new watchword for the Scottish Labour Party: “Devolution is what Scottish Labour does.”


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