Scotland’s independent think tank
Scotland’s independent think tank

‘The plus factor must be taken into account’ – Scotsman

This article by Jeremy Purvis appeared in the Scotsman.

There is no question that the people of Scotland want their politicians to be focused on jobs, and on protecting the health and education services. However, there is also the debate about Scotland’s constitutional future. The two are linked. Voters also want to have a say in how money that is spent in their name is raised.

It is a well-established principle that the people of Scotland are sovereign, but at the moment the parliament is not properly answerable to the people for the money it spends. Devo-plus, an idea gaining much interest, addresses this.

While the choice ahead of the people of Scotland is a clear one: whether to continue to be part of the United Kingdom or to leave it, devo-plus will enrich the debate.

At its heart is the straightforward principle that each level of government should be responsible for raising as much as possible of what it spends. This is common in many nations.

With spending should come accountability. The people of Scotland cannot be sovereign if they cannot appropriately hold the Scottish and UK parliaments to account for the money that is spent.

The UK is one of the most fiscally centralised nations on Earth. It affords its constituent nations and its local authorities minimal finance raising powers and is predominantly a country based on financial transfers between levels of government and regions of the country.

Forms of equalisation can have merits, providing a solid and stable base for the welfare state for example. Some parts of Scotland receive more funding back from local business rates than they raise. It happens across the UK as a whole at a broader level. It’s about a fairness that we all gain in good times, but we all share the challenges in the bad.

However, the current system is ill-suited to the local decision-making which is crucial today. Continuing the dependency on grants from Westminster creates a moral hazard. In other words, if Holyrood is permanently not responsible for raising its funding there will never be any real incentive for it to improve the tax base in Scotland, as it will not gain from the improvement.

It means that for Scotland to have a successful future as part of the UK family, we need further reform. There has been comment about devo-max – and I apologise for the proliferation of terms now peppering these pages. Devo-max, where all taxes are raised in Scotland and Westminster is paid back for services, will not work. It does not exist in any other comparable country, would create conflict and friction from the outset and is wholly contrary to the Organisation for Economic Co-operation and Development (OECD) best examples of financial decentralisation. It would not, make either Holyrood or Westminster accountable for what they spend either.

Politicians across the political spectrum have promoted the concept of increased powers within the UK for many years.

In his Donald Dewar Lecture in 2003, the former presiding officer Sir David Steel, a Liberal Democrat, said: “Frankly, no self-respecting parliament should expect to exist permanently on 100 per cent handouts determined by another parliament, nor should it be responsible for massive public expenditure without any responsibility for raising revenue in a manner accountable to its electorate.”

In 2004, I was author of a paper arguing for fiscal federalism, a term to describe much greater tax varying powers under the devolution settlement with additional reforms to the way the UK operates. And the Calman Commission led to the Scotland Bill, which is being taken through Westminster by a Conservative-led coalition and will make a substantive shift towards more powers for the Scottish Parliament.

The Devo Plus Group, and our approach we launch today, is therefore building on the work of politicians of all parties and of non-party body Reform Scotland and its analysis and research, which itself has been shaped and considered in the light of earlier proposals for reform.

Over the past few weeks, there has been much debate as to when the referendum is, how many questions there should be, and who frames the question on the ballot paper. The Devo Plus Group is not about process so we can be clear: we are not a campaign for a second question on the referendum ballot paper. Indeed, my personal view is that a second question is certainly not necessary for devo-plus to be implemented.

The aim is a clear one for me. When I vote in the referendum – and I will vote “No” – I want that no vote to be a positive vote for change, for reform along devo-plus principles. Our hope, and our work, will be focused on building the coalition among the parties that disagree with independence. The coalition will be stronger if it is wider than simply political parties.

This is why we will be seeking to inform and enrich debate, among, between and outside political parties. Everyone has the chance to be involved, and at the heart of devo-plus is the start of what we fervently hope will be a wide movement for reform along the principle that the future of a strong Scotland within the UK rests with it having increased financial powers.

But more importantly, the people can hold it to account for the choices it makes. For jobs, health, education and decisions made for all the services our families rely on, better choices can be made under the devo-plus approach.

• Jeremy Purvis is a former Liberal Democrat MSP and leader of the Devo Plus Group.