The Scottish Referendum – Part 3 – November 2014 – Getting Down to Business -Westminster Backtracking Begins In Earnest

 

 

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10 November 2014: Ekklesia – Submissions to the Smith Commission – Expert Observations and Warnings to Scotland of The Trap

Ekklesia is a public policy think­tank, (one of the UK top 5) headquartered in Edinburgh and London, which examines the role of beliefs and values in shaping policy and politics for the furtherance of social and environmental justice. Christian in background and orientation, It works with people across and beyond the spectrum of religious and non ­religious conviction. It is supported by a charitable trust but is fully independent of both political parties and faith bodies.

 

 

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The Proper Discharge Of the Commission’s Terms Of Reference:

The Smith Commission is charged with securing recommendations to deliver more financial, welfare and taxation powers to strengthen the Scottish Parliament within the United Kingdom based on wide consultation with political parties, civic society, businesses and individuals across Scotland. It is recognized that this is an extremely challenging and complex task. Our submission will therefore focus on two areas. The need for civic participation and the principles which we believe should rest at Holyrood.

The Commission has advised against a mere ‘shopping list of powers’, and we concur with that. The issues involved in achieving a radically improved devolved settlement for Scotland require a more wholistic approach. We are not convinced that the top-down nature of the Commission’s structure, with two representatives each from the political parties who currently sit in Holyrood, but no solid framework for civic participation, is adequate to this challenge, and we will therefore suggest an addition and amplification.

 

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Adequate Time and Scope For Popular Participation:

The scale and complexity of the Commission’s remit relate directly to chronology. While we recognize the pressure to produce Heads of Agreement by 30 November 2014 on the path to a legislative process by January 2015, we are concerned that this timetable does not allow realistic time for adequate consultation with the people of Scotland. Lord Smith has responded to this concern by arguing that, effectively, consultation expands to fill the time available for it, and that discipline is no bad thing in this respect. While recognizing the weight of this observation we would argue that there is a balance between efficiency, quality, reach and coherent outcome to be achieved which cannot automatically be resolved on the side of brevity.

The 18 September referendum on Scottish independence and the two years of debate that preceded it were an unprecedented ‘democratic moment’in the history of this country and the islands of which it is part. What was particularly significant was the revival of ‘town hall politics’, the extraordinary level of local engagement, and the growth of political and constitutional literacy at a grassroots level in Scotland.

The energy for change and development came not from top-down institutions but from ordinary people and communities. To be consistent with this reality, the form of delivery of the Commission and the framing of its proposals needs to make time for genuine and extensive public discussion of the Heads of Agreement, so that it is the people of Scotland and not simply the representatives of political parties or other vested interests who are consulted and involved in the process of agreeing the instruments for devolving power within and across the nation.

 

 

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Key Practical Principles and Yardsticks To Be Observed:

Ekklesia is committed to social justice, equality, conflict transformation and non-violence, the localization of power, environmental sustainability and public dialogue as procedures (not just theories) capable of bringing people together from different belief backgrounds and experiences in the creation of common purpose. We would urge attention to  the following principles in determining the outcomes of the Commission.

Subsidiarity:

Derived from Christian (especially Catholic) social teaching, but applicable to the kind of mixed belief society that Scotland and the British isles are now becoming, the principle of subsidiarity is that central authority should have a subsidiary (that is, a supporting, rather than subordinate)function in political and constitutional organization, performing only those tasks which cannot be performed effectively at a more immediate regional or local level. In the case of the Smith Commission, therefore, we would wish for outcomes that demonstrably allow and encourage the possibility of further sharing of power from the Scottish Parliament to regions and communities.

 

 

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Recognition of Nationhood:

We would wish that the Commission recognize Scotland to be a nation (that is, a geographical unit capable of enabling a large group of people to be united in their diversity of language, culture, environment and economic life ) rather than simply a region of a larger state. We make that point not in any ‘essentialist’ way, since Ekklesia is and has been critical of overly determinist notions of nationhood or statehood, but because of the strong desire for self-determination expressed both by those who voted for independence in September 2014, and by many who voted to remain part of the United Kingdom while responding positively to the promises of “substantial powers” and “what would amount to home rule” or (so-­called) “devo-max” made by representatives of the largest Westminster parties during the run-up to the referendum. In other words, recognition that Scotland as a national entity provides, on practical grounds and in terms of scale, the genuine possibility of ensuring the kind of political,social, economic and ecological accountability that can make life better for people within its embrace especially those who are currently suffering from levels of poverty and deprivation which is wholly inconsistent with the natural and manufactured resources available to those who live in Scotland, whatever their background or nationality.

 

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A ‘Family Of Nations’:

Both during and after the referendum, Britain has been spoken of as a ‘family of nations’. This complements the point we made in 4.b, above. Our own view is that there are genuine practical, economic, political and legal difficulties to achieving straightforward federalism in a country marked by enormous differences of size (with England housing 85% of the population of the British isles) and financial power (with the City of London, in particular, operating as a virtual city state and therefore strongly shaping, intentionally and otherwise, the political disposition of the largest Westminster political parties). We therefore hope that the proposals emerging from the Smith Commission, while taking a generally federal shape, will remain open to other possibilities in the future, notably that of confederalism an association of states in which each member state retains substantial independent control over internal and external affairs, with sovereignty pooled and shared by agreement. This enables the combining of a high level of autonomy and self-determination with interdependence and conviviality pointed towards a post ­national way of thinking and acting in a globalized world.

 

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The Embedding Of Devolved Power:

As Canon Kenyon Wright (widely regarded as the father of the Constitutional Convention and the present devolution settlement in Scotland) has observed, devolution has two in­ principle limitations. First, it is incomplete. The recent debate about the impact of a UK-wide decision which could potentially see the withdrawal of Scotland from the European Union against the will of the majority of its people is illustrative of this. Second, and especially important for the work of the Smith Commission, it is conditional. In other words, devolution is power on loan; power ultimately retained rather than given. It can be withdrawn, as has been seen recently in Scotland’s case in relation to the 2013 Energy Act. This is crucial. For Westminster to retain the permanent power to grant, alter, or rescind powers devolved to the Scottish Parliament would leave Scotland insecure and the United Kingdom as a whole fundamentally unreformed. A core principle for the Commission should therefore be to ensure that devolved powers granted to Scotland are underwritten by a legal framework that ensures their durability and stability.

 

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The Capacity To Disavow the Threat Of Mass Destruction:

While we recognize that it is not within the remit of the Commission to recommend substantial devolution of powers in the area of foreign affairs and defence (security) policy, we regard it as axiomatic that the people of Scotland should not have to have weapons of mass destruction, namely the Trident nuclear submarines based at Faslane on the Clyde, imposed on their territory without, as a minimum, democratic consent of a kind not provided within the current United Kingdom settlement. This should be addressed. Ekklesia will, of its own volition, continue to argue that nuclear weapons and other weapons of mass destruction are not only immoral but illegal in international law.

An Equilibrium Between Powers Granted and the Capacity and Resources To Utilize Them For Public Benefit:

It is extremely important that political and constitutional powers granted to the Scottish Parliament and Government under a devolution settlement are matched by the tax-raising, financial and economic powers required to enable them to deliver measurable benefits to people and communities.

 

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The Right Of Civic Engagement, Consultation and Assembly:

We see the institutions of governance and policy invested in the capacity of people and communities to determine their own lives, rather than the other way round. This notion has been developed as a ‘claim of right’, an assertion given moral and theological weight from within our Christian tradition (in association with others in a plural environment) by the Rev Dr Ian Fraser, among others, in recent Scottish history. The principle of establishing processes that are open to shaping by citizen’s assemblies and popular participation is an important one for us, rooted in the notion of ‘radical democracy’ moving beyond merely liberative democracy to the capacity to embrace difference and antagonism in public life/policy in ways that enable dominant power relations to be challenged by those otherwise marginalized by lack of resources, education or status in society. We recognize that this principle is more relevant in terms of the outcomes of the deployment of specific powers (judging them morally and practically in terms of their impact on the poorest and weakest, recasting them to give such people a real stake in determining better outcomes, along lines suggested by Scotland’s Poverty Truth Commission). Nevertheless, it is important to bear it in mind in formulating the settlement of powers within national institutions.

 

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Specific Proposals For Devolved Powers and Their Grounding. The Following Would Be A Good Basis For Establishing the Kind Of Principles Enumerated Above:

* Power over all franchise and electoral law residing in Scotland: This would would allow 16-18 year-olds to vote in the 2016 Holyrood election, allow Scotland to develop and deploy a fairer electoral system, and create conditions for a proper power of public recall.

* Comprehensive economic powers: This would need to include borrowing as well as taxation. The aim would be the capacity to deliver social, environmental and financial security and measures of redistribution.

* Full control over employment law and employment rights, including industrial relations and health and safety legislation.

* The welfare system: This would enable Scotland to create a fabric of social security and comprehensive welfare suitable for a modern society, and appropriate to the needs of disabled and sick people and the most vulnerable.

* Energy powers: This would involve control over industrial emissions standards, the generation of community renewables, energy efficiency and the proper assertion of public purpose over power companies.

* Transport policy: To enable the creation of a community owned and oriented integrated and environmentally sustainable public transport system in Scotland.

* Full powers over human rights and equalities law: This would enable Scotland to retain the Human Rights Act if it was scrapped by the United Kingdom Parliament, and also full consonance with European and international instruments.

* The right to refuse participation in illegally and morally flawed international wars and conflicts, and to refuse the stationing of weapons of mass destruction on Scottish soil.

* The right, as part of family of nations, to retain membership of the European Union if the majority of those voting in a referendum on the topic in Scotland so determine.

Constitutional Consultation:

In view of the complexity of these issues and the need for public and civic participation, we would favour thoughtful proposals for a proper constitutional convention for Scotland, and for the other nations of the United Kingdom. http://www.ekklesia.co.uk/sites/ekklesia.co.uk/files/submission_to_the_smith_commission_0.pdf

 

 

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27 November 2014: Smith Unveils his devolution package – Events of the day as they unravelled

08.00 Good morning. At 08.30, Lord Smith of Kelvin will unveil a new devolution deal to Scotland that will grant Holyrood powers over income tax and welfare spending. The cross-party commission was set up after the unionist parties promised greater powers for Scotland in the event of a no vote in the independence referendum, in a pledge known as ‘The Vow’. The deal is being hailed as the biggest transfer of powers to Scotland since the Scottish Parliament was set up 15 years ago. It has been drawn up in little over two months. The deal includes:

Full control in Scotland over income tax rates and bands, but not the personal allowance threshold.

More control over welfare, including the rate of Disability Living Allowance ands its successor PIP, Attendance Allowance and Carer’s Allowance. Scottish ministers will have the power to top up Universal Credit to effectively abolish the “bedroom tax”.

Control over Scottish Parliament elections will be devolved, allowing SNP ministers to press ahead with plans to give 16 and 17 year olds the vote.

 

 

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08.10 The devolution of income tax goes beyond what Labour intended. Gordon Brown warned the devolution of income tax would be a “trap” because it would force Scottish MPs to surrender significant voting rights in Westminster over budgets – putting the Union itself at risk. Under the deal, however, we expect Scottish MPs to retain votes over budget votes.

Asked why the reversal in position, Jim Murphy, running to lead Scottish Labour, said this morning: “I’ve changed my mind.” “I listened to the people of Scotland in the referendum, who wanted real change but in the United Kingdom. We changed our mind, and reflected on the wishes of the people of Scotland. “I think this morning very many of those Yes voters who are not dyed-in-the-wool SNP people, they will be pretty satisfied with this deal. “But the second thing is that important parts of pooling and sharing of resources within the UK remain, the Barnett formula will remain, issues about the state pension will remain, and the ability to deal with a downturn in the economy will remain by Universal Credit and things like that remaining part of the UK. “So I think it’s a remarkable deal and a best of both worlds deal: really strong devolution but Scotland remaining part of the UK.”

 

 

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08.20 Gordon Brown issued a statement, saying:  “The Vow to deliver a stronger Scottish Parliament within the UK has been kept, as promised, and the timetable for draft laws to be published in January will now be honoured, as promised.” He said that the Smith Commission has ruled that income tax is a “shared UK tax” and that a reserve power to levy a UK-wide income tax has been retained. “The Commission has rightly REJECTED the Conservative proposal ? from the day after the referendum for excluding Scottish MPs from voting on Budget income tax decisions. It has rightly ? recommended that the whole of the House of Commons, including Scottish representatives, will ? always ? vote on?  every aspect of UK Budget tax decisions.”

 

 

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 08.30 Lord Forsyth, John Major’s Scottish Secretary, has attacked the reforms to income tax as “piecemeal” that will be easily avoided, as the wealthy can take their income as dividends. “This is why it’s mad to rely on income tax as your main source of revenue. If the proposals are that dividends in income should be not taxed, they can change to have most of their income in dividends and avoid the Scottish rate of tax. I think we could end up if people think more powers to the Scottish parliament means more money… this has not been thought through,” he told Newsnight last night. “The Labour party’s idea that we should have a constitutional convention for the whole of the United Kingdom, and not do this piecemeal reform as a panic measure to the rise of the nationalists and the result of the referendum.”

 

 

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08.40 Boris & Co: Now give powers for England. Local government leaders including Boris Johnson, the Mayor of London, have called for negotiation similar to that in Scotland to agree a comparable package for English local government. The letter, entitled What is good enough for Scotland, stated: “We leaders and supporters of local government in England of all parties and types of local government congratulate Scotland on the measure of devolution they have worked for and that is now proposed by the Smith Commission.

We call upon central Government and party leaders to recognise that local government should be the vehicle for devolution in England and to now negotiate with us using a similar non-party Commission to agree a comparable package of measures for local government in England which can appear in the Manifestos and be enacted after the General Election.”

 

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09.00 Lord Smith of Kelvin opened the press conference. He praised political leaders for coming together after the “bruising” referendum. The Scottish Parliament will be “stronger” with “more tools to pursue its tools and objectives”, he says, after the biggest transfer of powers since it was created. It will be “more accountable” because more spending will be funded from tax within Scotland. Specific mentions:

New borrowing powers alongside tax raising and the Barnett Formula block grant.

The Parliament will get the first ten per cent of VAT.

Receipt of Air Passenger Duty.

Control over how elections are run.

The number of msp’s to be elected to parliament and how they are to be disqualified.

Power to give 16 and 17 year olds a vote.

Scotland will get power over disability and care benefits.

Control of unemployment programmes, welfare subsidies, cold weather, winter fuel & funeral payments and the maternity grant.

Powers to create new benefits.

The Scottish Government will be given a bigger role in EU negotiations.

Urging the Scottish people to be “patient” for the delivery of the new powers. he said:  “Change of this magnitude cannot be rushed through.” He says inter-governmental working “needs to be improved”.

David Cameron and Nicola Sturgeon must meet to discuss outcomes soon after after 25 January 2015 and the Speakers of the Commons and the Scottish Parliament should meet to discuss how public understanding of the new settlement can be improved. Some believe the commission has gone too far, others not enough,” he said, “but my work is done – responsibility now passes to the Scottish Government.”

 

 

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 09.15  John Swinney, the Scottish finance minister and Deputy First Minister, said the proposals lacked job creation powers, welfare powers, control over personal allowance or national insurance that will allow Scotland to succeed. “I regret these powers have not been delivered.” He said they recognised the Smith Commission could not grant independence but they hoped it would allow Scotland to succeed economically.

They say this does not happen. “We welcome the new powers – as we support all progress for Scotland – and pledge to use them when they are in place in the best interests of the Scottish people. We also welcome the acknowledgement of the ‘sovereign right’ of the people of Scotland, and our ability to proceed to independence if we so choose. “But the proposals clearly do not reflect the full wishes of the people of Scotland, and also fall far short of the rhetoric from the No campaign during the referendum.

Then, Gordon Brown promised ‘nothing less than a modern form of Scottish Home Rule’ and ‘as close to a federal state’ as the UK can be. That was the context for the “extensive new powers” promised in the Vow. Regrettably, the Westminster parties were not prepared to deliver the powerhouse parliament the people of Scotland were promised – under these proposals, less than 30 per cent of our taxes will be set in Scotland and less than 20 per cent of welfare spending will be devolved to Scotland.

That isn’t Home Rule – it’s continued Westminster rule.” “Most significantly, the proposals do not include the job-creating powers that Scotland so badly needs to get more people into work and grow the economy, or welfare powers to tackle in-work poverty.” That claim is based on these two sentences in the report:

“Reflecting the sovereign right of the people of Scotland to determine the form of government best suited to their needs, as expressed in the referendum on 18 September 2014, and in the context of Scotland remaining within the UK, an enhanced devolution settlement for Scotland will be durable, responsive and democratic.”

“It is agreed that nothing in this report prevents Scotland becoming an independent country in the future should the people of Scotland so choose.”

 

 

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09.30 On Twitter, ‘betrayal’ is now trending in Glasgow, which voted yes. A sample reaction from Yes voters:

The SNP should NOT accept this deal. Barnett Formula IS being cut. That is NOT acceptable. It’s a betrayal. https://twitter.com/hashtag/BETRAYAL?src=hash

These banners are all over the east end of Glasgow. Telling labour that they won’t forget https://twitter.com/hashtag/indyref?src=hash

 

 

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09.40 John Redwood, the standard bearer for the Tory right, warns Scottish MPs voting on English income tax will be “unjust”. He wants a new settlement where the Speaker will declare which issues are English only. “I’m here to speak for England, and what we need is the ability to make a decision on behalf of England, just based on the votes of the English MPs at Westminster. Or in some cases we may be doing it with Wales and Northern Ireland if the issues are not devolved there, but not with Scotland, because the issues have been devolved to the Scottish Parliament. “Now that Scotland is going to get this mighty power to choose the tax rates and the bands for income tax, [it’s important] that Scottish MPs don’t come to Westminster and then impose an income tax rate or income tax band on England that we don’t want. It would be quite unjust if Scottish MPs were still able to vote on our income tax when they could not vote on their own income tax, and when Scotland had her right to choose her own income tax without us.”

 

 

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09.50 Nick Clegg says the parties have over-delivered on The Vow. “Call it Vow Max, Vow Plus Plus,” he tells his weekly radio show on LBC. “Because what you have got in the Smith Commission, which I think is truly remarkable, is the devolution over money so that Scotland now will be responsible for the majority of the money that it spends which is a good thing. “This is not asking more of English tax-payers. It is saying that if the Scottish people and the Scottish politicians they elect want to do more things, on welfare for instance, they have got the freedom to raise it for them themselves and they will have, basically, a new welfare system for them to manage themselves in Scotland.

They will have to fund it but they will be allowed to take responsibility for it. “That is basically Home Rule and that is something that Liberals down the ages have argued for over a long period of time. We also need Home Rule for Sheffield for Liverpool for Newcastle… we need devolution, decentralisation across the country.”

 

 

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10.00 A re-cap from the report – in full here – on what the deal proposes: https://www.smith-commission.scot/wp-content/uploads/2014/11/The_Smith_Commission_Report-1.pdf

– Scotland can set the rates and thresholds of income tax, but the personal allowance will remain set in Westminster. All the revenue will stay in Scotland. It will be administered by HMRC, with any extra costs footed in Scotland.

– Scotland will take the first 10 percentage points (i.e. half) of VAT receipts.

– Scotland will have have the power to borrow on the international markets, within a “prudential borrowing regime consistent with a sustainable overall UK framework.”

– Scotland will have control on air passenger duty from Scottish airports, and can scrap it.

– Power over the running of Scottish Parliament elections, including spending and the age of the franchise and the number of MSPs.

– Consultation with Scottish ministers on negotiations with the European Union, and allowing Scottish Government ministers to speak on behalf of all of the UK at the Council of Ministers in Europe.

– The Crown Estate i.e. Government land will transfer to the Scottish Parliament. This includes the seabed, rural estates, stretches of coast line and mineral and fishing rights.

But it will not cover “critical national infrastructure” covering defence, oil and gas.

– The Scottish Government will have a role in reviewing the BBC’s charter and the BBC – vilified in the referendum campaign by nationalists – will have to answer to the Scottish Parliament’s committees.

– Scotland will have a greater say over running the Maritime and Coastguard Agency, the Northern Lighthouse Board, Ofcom and Ofgem.

– the ability to top-up benefits payments to cancel out the so-called Bedroom Tax.

– Benefits for carers, the disabled and the ill; cold weather, funeral payments, maternity grants and winter fuel payments.

– The right to create new benefit payments.

– The running of back-to-work schemes for the unemployed.

– The report calls for “serious consideration” to devolving control over abortion and call for immediate consideration.

– It calls for a discussion around the devolution of medical rules on embryology, surrogates and medicines.

– Tribunals will transfer to Scotland, except the Special Immigration Appeals Commission and the Proscribed Organisations Appeals Commission.

– Transport will be devolved, including the power to set speed limits, and allowing the state to bid for rail franchises.

– The level of so-called Green Levies on fuel bills will remain in Westminster, but how they are raised will be devolved.

– Scotland will take control of onshore oil and gas licencing, but off-shore will remain a UK-wide issue.

– Scottish ministers can request competition authorities investigate issue in Scotland.

– Scotland takes control of consumer advocacy, and will have the power to prevent the spread of payday loan shops and fixed odds betting terminals.

Powers explicitly staying with Westminster are:

– The Barnett Formula, setting the block grant from Westminster, will remain.

– The state pension, including the pension age.

– National Insurance, Inheritance Tax, Capital Gains Tax, Corporation tax, fuel duty, oil and gas receipts remain controlled by Westminster.

– Universal Credit, the new DWP system for delivering working age benefits, including the rates and sanctions regime

– Housing benefit, maternity pay, statutory sick pay, bereavement allowance and child benefit.

– the National Minimum Wage.

– The Equality Act will remain UK wide, but Scotland will be able to set new rules such as gender quotas.

– The Treasury retains overall responsibility to manage risks and shocks to the economy, including a power to levy UK-wide taxes if required.

 

 

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10.50 David Cameron welcomed the Smith Commission, and says the case for English votes for English laws is now “unanswerable”. He will unveil proposals before Christmas. “I’m delighted with what’s been announced. We are keeping our promises and we’re keeping our United Kingdom together. I always said that a ‘no’ vote didn’t mean no change. Indeed, we made a vow of further devolution to Scotland. And today we show how we’re keeping that vow and we’ll continue to keep that promise.

“The Scottish Parliament is going to have much more responsibility in terms of spending money. But it will also have to be accountable for how it raises taxes to fund that spending. And I think that’s a good thing. “I think the report today also makes the case for English votes for English laws unanswerable and we’ll be taking action on that shortly. And I think, taken together, this extra devolution for Scotland and dealing with the all the issues in our United Kingdom will make our United Kingdom stronger. So it’s a good day for the UK.”

 

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10.58 On Twitter, the Smith Commission becomes #smithscommission;

This Charming Mandate For Radical Change #smithscommission — Robert Hutton (@RobDotHutton) https://twitter.com/hashtag/smithscommission?src=hash

heaven knows i’m miserable vow. #smithscommission euan mccolm (@euanmccolm) https://twitter.com/hashtag/smithscommission?src=hash

Please please please let me get greater fiscal autonomy #smithscommission — Steve Van Riel (@steve_vr) https://twitter.com/hashtag/smithscommission?src=hash

 

 

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11.04 Jim Murphy, the Labour leadership front runner, says the deal means the SNP will no longer be able to blame London for failing to deliver. “The Vow made during the referendum campaign has not only been delivered – it has been exceeded. “This huge package of new powers is a good deal for Scotland. More decisions about Scotland will be taken here in Scotland, without losing the financial security that comes with the Barnett formula. “The days of political parties in Scotland promising the earth but blaming someoneelse for their failure to deliver are well and truly over. There will be no hiding place for those parties which preach social justice but duck for cover when called to act.”

 

 

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 11.15 In the Commons, MPS discuss the Smith Commission;

Alistair Carmichael, the Scottish Secretary, says the measures “will be implemented without hesitation, without reservation and without equivocation”. He says “work starts today” to turn recommendations into draft legislation by Burns Night in January 2015. “For the first time over 50 percent of the money spent by the Scottish Government will be raised by the Scottish Government,” he said.

Alistair Darling, the former Chancellor, said devolution must do nothing “that undermines the integrity of the United Kingdom.”

Stewart Hosie, the SNP Deputy Leader, said the SNP “won’t stand in the way” of the package but says it has not turned the Scottish Parliament into a “powerhouse”, and says the Scottish voters have been let down.

Carmichael chided Stewart Hosie’s tone and said he had failed to welcome the deal. “He predictably and depressingly seeks to claim this is not the fulfilled.” He waved a copy of today’s Record, which declared: “The Vow Delivered”. He demanded the SNP respected the outcome of the referendum for a generation. He went on to say, “Britain needs federalism,” but held back from saying that’s what the report achieved.

Redwood demanded English MPs have control over English taxes. Carmichael dodged the question a little, and said that the Smith Commission ruled that income tax is a UK-wide tax. MPs shouted “Rubbish!”.

Carmichael is asked if the UK Treasury will have to undewrite Scotland’s extra borrowing. He responded; “Scotland will be liable for any debts it incurs under its new borrowing powers”. (How that works in theory and practice is not clear since the UK retains responsiblity for overall fiscal framework.)

Carmichael is asked whether Scottish control of income tax could trigger a low-tax race between England and Scotland. “That is indeed one of the possible consequences,” he responded.

Pete Wishart (SNP, Perth) said the package is disappointing.

Carmichael said Wishart just wanted independence. “He lost. It’s about time he and his party came to terms with that loss. For him and his party to try and get independence by the back door does not respect the views of the Scottish people as expressed in the referendum. He has a duty to speak for the 60.91 per cent of his own constituents who rejected independence.”

Philip Davies asks “how those people who wanted the status quo should have voted in the independence referendum.” Carmichael said it was clear that a “vote for no was not a vote for no change”.

Chi Onwurah, Labour MP for Newcastle, asked about air passenger duty and the competition from Scottish airports v northern English airports. Carmichael said it was for her and her city to propose the new powers they wanted.

Asked about English votes for English laws, he said: “I am confident that England will get what England wants, when England decides what it is it wants.”

 

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12.00 Update on borrowing: the PM was asked about this at the Liason Committee last week. He said borrowing would be capped at £2.2 billion and the UK is the lender of last resort. http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/liaison/evidence-from-the-prime-minister-2014-15/oral/15649.html

 

 

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12.20 Elsewhere in the world, the price of Brent Crude has fallen to the lowest level in four years as Opec meets. http://www.bbc.co.uk/news/business-30223721 The Yes campaign’s finances were built on assumptions of oil at $113 a barrel. It’s now $75.75. Under the Smith Commission, oil revenues will not be devolved – to SNP chagrin.

 

 

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12.40 A number of aspects outstanding will be clarified in time by Westminster:

What English votes for English laws really mean – and whether MPs from north of the border will be barred from voting on income tax bands and rates in the rest of the UK. Details are due to be set out by Mr Cameron before Christmas but the PM’s official spokesman said that the principle would be that the differentiation would apply to “all financial matters”. Some elements of income tax would remain UK-wide, he pointed out, such as the allowance thresholds and how income was defined – and there would “continue to be a UK Budget”.

Asked specifically if MPs from north of the border would be excluded from voting, for example, on a change to income tax bands or rates in the rest of the UK, he declined to give detail of specific plans. But he added: “Where you see significant areas of devolution, there is an important principle there in terms of English votes for English laws. The Prime Minister was pretty clear when he was in front of the select committee that he thinks he is going to bring forward proposals which are going to reflect that because that is the fair thing to do.”

Ed Miliband insisted the settlement meant Scottish MPs WILL vote on English budgets. “The system of tax reliefs remains at a UK level, other aspects of the income tax system remain at the UK level. “I think it’s part of the integrity of the UK that it continues to be the place that Scottish MPs vote on the budget. The Smith Commission itself recognises that in their report.

 

 

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13.30 Other matters arising;

Nicola Sturgeon ‘wants to impose stealth tartan tax’. http://www.telegraph.co.uk/news/uknews/scotland/11263852/Nicola-Sturgeon-wants-to-impose-stealth-tartan-tax.html

Nicola Sturgeon attacks Scotland powers deal agreed by SNP. http://www.telegraph.co.uk/news/politics/SNP/11259179/Nicola-Sturgeon-attacks-Scotland-powers-deal-agreed-by-SNP.html

Ed Miliband trys to win back Yes voters in Scotland. http://www.telegraph.co.uk/news/politics/ed-miliband/11260800/Ed-Miliband-attempts-to-win-back-Yes-voters-in-Scotland.html

 

 

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13.30 Labour are concerned about regional airports in the north of England, and tax competition from lower levels of air passenger duty in Scotland.Is a tax race brewing? Balls and Umunna wrote to their Tory counterparts. “All of our parties support the Smith Commission conclusions and its principle that implementation should not cause detriment to the UK as a whole nor to any of its constituent parts. And cause neither the UK Government nor the Scottish Government to gain or lose financially simply as a consequence of devolving a specific power.

It is important that, in implementing the Smith recommendations in relation to Air Passenger Duty, this principle is upheld. This means ensuring that English Regional Airports are not disadvantaged. English Regional airports cannot be faced with continuing uncertainty and risk through not knowing whether they will be significantly disadvantaged should a future Scottish Government introduce changes to Air Passenger Duty. It is therefore imperative that the UK Treasury leads work across Government – and working with the Scottish Government – on a mechanism to ensure that English airports, particularly in the North of England, are not disadvantaged.”

http://www.telegraph.co.uk/news/uknews/scotland/scottish-politics/11257164/Scottish-devolution-Smith-Commission-report-as-it-happened.html

 

Debate3876

 

27 November 2014: The last-minute pledge by Unionists in the independence referendum debate on more powers to be sent to the Scottish Parliament is broken.

The Record also claims, (breathless with excitement) that “Scotland will be allocated £5 billion of VAT receipts, 50 per cent of the VAT take in the country”. But the Smith report makes abundantly plain that this too will NOT result in any extra money for the Scottish Government’s budget. Quote: “The receipts raised in Scotland by the first 10 percentage points of the standard rate of Value Added Tax (VAT) will be assigned to the Scottish Government’s budget. These receipts should be calculated on a verified basis, to be agreed between the UK and Scottish Governments, with a corresponding adjustment to the block grant received from the UK Government in line with the principles set out in paragraph 95.”
Paragraph 95 is the section which explicitly says that any changes should not result in an increase or decrease to the Scottish Government budget.

What that means is that any “extra” money assigned in VAT will be immediately clawed back from the block grant – in other words, the amount of money in Holyrood’s budget will be exactly the same, but some of it will be labelled differently. Westminster, to all practical intents and purposes, will hand Scotland a tenner with one hand and take back two fivers with the other hand.

 

 

Debatea67899

 

Worrying facts about the Smith Commission causes concern. The following is what was said: “ Agreed plans to give Holyrood new powers over abortion law, lotteries and health and safety at work were dropped from the Smith Commission at the 11th hour leaked drafts have revealed. The documents show that a range of major powers were set to be devolved to Scotland as part of the Unionist “ vow” made during the independence referendum but were axed in the final days of negotiations. They include full devolution of abortion law and creation of a separate Scottish Health and Safety Executive. Both were downgraded to the status of “additional issues for consideration “and may or may not be devolved in the future.http://wingsoverscotland.com/and-now-for-the-truth/

 

 

Debateasdf

 

 

Plans to give the Scottish Government more control over the treatment of asylum seekers and a greater say in the governance of the BBC were removed at the instigation of the Unionist parties. A draft dated November 21st included proposals to devolve income tax personal allowance, employers’ National Insurance contributions, Inheritance Tax, and the power to create new taxes without Treasury approval. However these were never adopted into the agreed text.

http://www.heraldscotland.com/politics/scottish-politics/revealed-the-devolution-powers-shelved-at-the-last-minute-from-smith-comm.25999250

 

 

Debatebgty

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