Readers of this column will be aware that I've been complaining about by gob being smacked on a regular basis by the twists and turns of unionist policy. Each week a new destiny is revealed for Scotland: independence light, devolution max, devolution plus, skinny devolution lite with a shot of max... You could be forgiven for thinking that the politicians are few clauses short of a full constitution. But bear with me because there could just be a happy ending here.
This week senior figures in all three unionist parties in Scotland, Conservatives, Liberal Democrats and Labour, came together behind a new constitutional settlement called devolution plus. This is essentially the formula devised by the Reform Scotland think tank, which seeks to ensure that the Scottish parliament raises the vast bulk of the money it spends. In other words, that it pays its way. In a sense this is Calman reloaded, an extension of the plan devised in 2009 by the commission set up by the unionist parties after the SNP victory in the 2007 election campaign.
Calman was widely criticised for his plan to split income tax between London and Edinburgh. This was a difficult proposal to explain, let alone to implement, and many economists believe it would be deflationary. But the worst thing about Calman, and the Scotland bill that implements it, was that it failed to live up the principles set out so cogently in the main body of the report - that a parliament should be responsible for raising its revenue in a way that it is accountable, equitable and transparent. Devolution plus puts the Calman principles into practice in a way that is fair and that people can understand.
Under devolution plus, Scotland gets income tax, corporation tax, various other taxes and a geographical share of oil revenue. The UK keeps national insurance and VAT – reasonable because these taxes need to be more or less consistent across a monetary and customs union, which is what the new Scotland would be. This may not be “full fiscal freedom”, as the SNP have described it, or even devolution max, where Scotland raises all tax and sends a contribution south for common services like defence. But it's very close to it. If this scheme were implemented, Holyrood would have the vast majority of the powers it requires to pursue an independent economic policy, to the extent that this is possible within a monetary union where a UK central bank sets interest rates.
