The Scottish Government’s familiar mantra that Scotland needs ‘the levers’ of financial power in it own hands appears to have found the ear of the UK Government.
Today’s, 22nd December, national media are reporting that the UK Government is prepared to devolve to Scotland total control of income tax and of housing benefit.
Senior Scottish politicians at Westminster, former Chancellor, Alistair Darlig and current Scottish Secretary, Alastair Carmichael, are quoted as supporting this development, with Darling saying that the existing devolution of housing policy will make full sense when it can be associated with control over housing benefit.
Carmichael has pointed out that giving Scotland total control of income tax – if that is what emerges from forthcoming discussions at the various party Spring conferences – would enable the Scottish Government independently to set its own income tax regimes, collect the revenues and control the spending of those revenues.
Simultaneously being given the power to abolish the Bedroom Tax in Scotland at a stroke, is an interesting development.
It seems a recognition that different values obtain in different cultures of the union and that Scotland, with its long socialist traditions, would appear to have a settled will to accept higher levels of income tax to pay for a more generous welfare regime.
This move has to be seen as a triumph for the SNP Government, successfully making the case for the logic of local control in such matters, of being able to tune the taxing and spending regimes to the value-set of a constituent nation of the UK.
It also resets the balance the current Scottish Government continues to claim is skewed against Scotland, saying that this country contributes more to the UK exchequer annually than it gets back, even through what is generally considered to be a generous Barnet formula.
With total power over income tax, Scotland will retain and use such revenues within its own borders.
And the star on the top of the tree?
Devolving these key financial and social levers within the UK means that Scotland will continue to be part of the crucial sterling zone of which we have been a member for so long.
This has to be something of a ‘win win’ for Scotland.
