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By Arthur Midwinter, adviser to Scottish Labour:

http://theconversation.com/scotland-will-not-be-offered-devo-max-after-a-no-vote-heres-why-31500

Scotland will not be offered devo max after a No vote – here’s why

In the current debate on independence, journalists and commentators regularly claim that “devo max” is the favoured option of a majority of the Scottish people, and some express an expectation that this will be the result of inter-party discussions between unionists that have been promised by Gordon Brownin the event of a No vote. In recent days, there has even beentalk of “devo supermax”. This is strange. Very few people actually know what devo max means.

It is in fact an independent model which was proposed by the Scottish National Party (SNP) as a fallback position for independence. None of the three main unionist parties supported devo max in their proposals over the past year for transferring more powers to Scotland if it stays in the union.

The Scottish government sees devo max as a means of acquiring fiscal powers to promote economic growth through a more competitive tax regime. It set this out in a 2009 paper, proposing a model which they call full fiscal autonomy. This would make the Scottish parliament responsible for raising, collecting and administering the vast majority of revenues in Scotland – and the vast majority of spending. The Scottish government would make a payment to the UK government for common services such as defence and foreign affairs. The 2009 report described this as “the maximum form of tax and policy devolution short of independence”.

Why devo max is unworkable

The problem is that this is an entirely theoretical model which is incompatible with the British system. This is why it was rejected by the Calman commission, the body set up to look at the options for extending devolution in Scotland. Any additional powers for the Scottish parliament need to be compatible with a fiscal framework that is based on a highly integrated economy with common economic and fiscal policies; a free market in goods and services, capital, labour and knowledge; and similar standards of welfare benefits and public services funded by pooled taxes.

The current UK treasury model is expenditure-based. Budget allocations are made to UK departments and devolved administrations to meet their objectives. This avoids wasteful tax competition, and funding is transferred automatically to assist areas that raise lower levels of taxes than the average.

By contrast, the notion of full fiscal autonomy is tax-based. It means there is no money redistributed from the centre to help boost areas in need. But in particular, the SNP’s obsession with corporation-tax cuts would clearly be unacceptable to the rest of the UK. Calman rejected it as disruptive to the UK economy and to the management of government finances. The same would obviously go for handing over control of VAT or North Sea revenues (which are counted separately from the rest of corporation tax revenues).

The scope for tax variation in the UK is limited. Nor is there any evidence to support the SNP view that this would provide growth. The Scottish government’s own assessment of the impact of its flagship policy of cutting corporation tax is based on economic modelling – an imprecise science. In fact this produces a growth of only 1.4% over 20 years, or 0.07% per annum. This is trivial. It is reckless to argue for this change.

Bye, bye, Barnett

Moving the UK to full fiscal autonomy would end the Barnett formula, the system for transferring spending from London to Scotland, Wales and Northern Ireland. It consistently delivers higher spending to all three devolved administrations. The devo max model would result in real deficits that each administration would have to fund.

What would be beneficial would be some form of Calman plus, with greater control over income tax for accountability purposes and for example through devolution of housing benefit which would permit more efficient housing policy (this would enable the UK to keep the Barnett formula). This is essentially what the three main unionist parties are offering. Scotland has a very high level of welfare spending, which will grow, and therefore benefits from the pooling of resources.

It’s not possible for the unionists to go much further than their existing positions on increased powers without undermining the whole expenditure-based system. What is possible is to reach a swift agreement on new Calman-plus powers that can be implemented shortly after Scotland decides to stay in the union.

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I see that today, three Westminster politicians have made a "vow".

I have some questions.

Mr Miliband, if these guaranteed new powers (whatever they are) are so important to Scotland, why didn't your party deliver them the last time they were in power at Westminster?

Mr Cameron, if these guaranteed new powers (whatever they are) are so important to Scotland, why did you specifically block the "more powers" option from our ballot paper AND if these guaranteed new powers (whatever they are) are so important to Scotland, why were they not included in your government's latest Queen's Speech?

Mr Clegg, how did your last pledge go? ‪#‎studentfees‬

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"New powers..." the opening words on BBC1 tv news. Interview with Douglas Alexander who says these powers will be delivered faster than the alternative. BBC reporter explains why - the January 2015 draft bill timetable is sooner than the independence 2016 timetable.

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I hated the three choice vote idea as it would have killed the chances of independence outright in my view. Watching these clowns try to get it back on the ballot by the back door by basically promising it in the event of a No pretty much proves the point. (If you offer 3 choices you will not get an outright majority for anything.)

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I see that today, three Westminster politicians have made a "vow".

I have some questions.

Mr Miliband, if these guaranteed new powers (whatever they are) are so important to Scotland, why didn't your party deliver them the last time they were in power at Westminster?

Mr Cameron, if these guaranteed new powers (whatever they are) are so important to Scotland, why did you specifically block the "more powers" option from our ballot paper AND if these guaranteed new powers (whatever they are) are so important to Scotland, why were they not included in your government's latest Queen's Speech?

Mr Clegg, how did your last pledge go? ‪#‎studentfees‬

That is good. I'm going to steal that. :ok:

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At least back in 1979 they had the decency to just tell us an outright lie "VOTE NO AND WE WILL GIVE YOU SOMETHING BETTER" they proclaimed.

This time, they are just giving us b ullshit. "Vote no, and we will think about giving you something extra. We don't know what and we don't know when but we are definitely going to think about it, sometime in the future. Some very influential folk in our parties are already saying that they wont allow it to happen, but we will worry about that later."

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Better together remind me of an abusive spouse.

One minute they are stroking your hair and whispering sweet promises in your ear and then in an instant they have grabbed it and are smashing your face off the table while screaming threats and obscenities... and then it is back to the stroking...

They are mental cases.

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Can I just check that I'm following this correctly:

A vote for "No" is a vote for further powers for Scotland...with a couple of notable exceptions in the shape of control of Energy (inc Oil) revenues and Defence Spending.

A Yes vote is a vote for further powers for Scotland inc a Geographical share of Energy revenues and the ability to not invade places like Iraq on the say so of Blair/Bush etc and the removal of Nuclear Weapons from the bottom end of the River Clyde.

?

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Can I just check that I'm following this correctly:

A vote for "No" is a vote for further powers for Scotland (maybe, if the voters of middle England/House of Lords allow it)...with a couple number of notable exceptions in the shape of control of Energy (inc Oil) revenues and Defence Spending.

A Yes vote is a vote for further powers for Scotland inc a Geographical share of Energy revenues and the ability to not invade places like Iraq on the say so of Blair/Bush etc and the removal of Nuclear Weapons from the bottom end of the River Clyde.

?

Close enough.

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The more I think about it, the more I get angry at this idea of 'Devo Maybe'.

Do you think the offers of extra (unknown) powers would be on the table if No were winning this comfortably ? Does anyone believe that these (unknown) powers are anything other than the tawdry bribes of men desperate to hold onto their bit of power ?

Aside from having no idea what these 'powers' will be, there's the small matter of pushing them through a Parliament stuffed with irate English backbench MP's who will have no intention of going back to their constituents and telling them that they took it up the arse from the Scots, just so the leaders could hold onto their jobs.

Who in their right mind would want to vote for 'a wee bit more power over your own life', when you could vote Yes and have it all ?

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