Tom Griffin (London, The Green Ribbon): You wouldn't know it from the debate about the future of North Sea oil, but the Labour Party has moved a long way towards accepting greater powers for the Scottish Parliament recently. In her first press conference as Scottish Labour leader-elect, Wendy Alexander said she was prepared to consider fiscal autonomy for Holyrood. "We need to look at how politicians are more financially accountable," she told reporters. "This has to be a dialogue within the UK." Greater tax powers were also reportedly under discussion at a recent meeting between Labour, the Conservatives and the Lib Dems to discuss an alternative to the SNP's National Conversation.
Alexander's predecessor Jack McConnell might well have pursued further devolution, but he was never given a free hand by Westminster. Initially, it looked as if Alexander would face similar restrictions. Scottish Secretary Des Browne said last month that there would be no change to the current devolution settlement: "It is the right split of devolved and reserved powers." He firmly opposed fiscal devolution in particular, stating "I candidly don't see scope for differential rates of taxation." Not for the first time, the rhetoric of the Labour leadership at Holyrood was at odds with that coming from Westminster. Significantly, however, the contradiction appears to have been resolved in favour of Alexander.
In the wake of her press conference there was a clear change of tone from the Scottish Secretary. "The Scottish Parliament has increasingly obtained more powers in the context of the settlement," he said. "There are discussions that will go on over a long period and we are at the beginning of that process." This appears to have vindicated suggestions that Alexander would carry greater clout with Westminster than her predecessors. Many Scottish commentators are convinced that her stance has the backing of Gordon Brown.
Alexander has made the case for greater fiscal devolution in the past. In 2004, she backed a study by the Fraser of Allander Institute, which called for a system of ‘fiscal federalism' that would hand more tax powers to Holyrood but stop short of full autonomy. Her husband, Brian Ashcroft is the policy director of the Institute. This caused her some embarrassment recently after the Sunday Times picked up a Scottish Futures video in which Ashcroft argued that outright independence was a better option than full fiscal autonomy. He later made it clear that he favours limited fiscal federalism over either. Ashcroft is also on the board of the Economic Research Institute of Northern Ireland, which produced a key paper supporting the case for a corporation tax cut to match the Republic. A review established by Gordon Brown was reported to have "absolutely dismissed the idea" in May. However, if the Labour Party has now endorsed the principle of fiscal devolution for Scotland, it will not go unnoticed at Stormont, or in Cardiff, where the Labour/Plaid Cymru administration is committed to a review of tax powers as part of the One Wales Agreement.
