Scottish Labour to consider devolution of income tax

Scottish Labour’s annual conference will this weekend consider calls for Holyrood to gain powers over all income tax in Scotland.

Scottish Labour’s annual conference will this weekend consider calls for Holyrood to gain powers over all income tax in Scotland.

As the party faithful prepares to meet in Inverness, the recommendations come in an interim report compiled by the Devolution Commission established by the party last year.

Coming as part of plans to give Holyrood responsibility for raising roughly half of the £30 billion it spends annually, reports today quote the Commission as saying unequivocally “In our view, a strong case exists for devolving income tax in full, and we are minded to do so.”

The Commission however adds:

“We would not want to devolve income tax in a way which would increase the administrative burden on employers, and individuals.”

It continues:

“it is important to consider the stability of funding for public services. This is an issue to which the proponents of other models of fiscal devolution have given insufficient consideration. We have no wish or desire to make Scotland’s public services poorer.”

The Commission opposes the devolution of powers over corporation tax, National Insurance and North Sea Oil revenues which it said would expose the Scottish Government to a “fiscal cliff” as income would fluctuate widely from year to year.

In opposing any changes to the current Barnett Formula used to allocate UK funds to Scotland the Commission goes on to argue that whilst it remained opposed to the UK’s welfare reforms, it did not believe it right that the Scottish Parliament gain powers over such spending. The Commission notes:

“We oppose the Conservative-led government’s welfare agenda, but this does not lead us to the conclusion that the solution is to tear up the welfare state that has served us well.”

The recommendations are likely to prove controversial, however, with reports that a number of Scottish Labour MPs will stay away from the conference in protest at plans to devolve income tax which they feel both go too far and which they do not believe they have been sufficiently consulted on.

A spokesperson for the party is quoted as saying “it is the start of a debate, not the end of it”.

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One Response to “Scottish Labour to consider devolution of income tax”

  1. viv richards

    I’d like to see tax and spending decisions devolved to county level. I’d also like to see multiple currencies in use in the UK. perhaps scotland in the Euro, a north and south pound (which would be better for both of us). I’d also like to see a competing currency that is backed by something rather than the paper money that the government inflates away to reduce its debts.

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