Lamont facing revolt over income tax devolution plans

Saturday, 08 March 2014 17:03

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  By a Newsnet reporter
 
Scottish Labour has been plunged further into crisis by deepening rifts over leader Johann Lamont’s devolved income tax plans, just a fortnight ahead of the party’s 2014 conference.
 
The plans to fully devolve income tax powers to the Scottish Parliament in the event of a No vote in the independence referendum were introduced in an interim report last spring by Scottish Labour’s devolution commission. The commission is chaired by Ms Lamont.

The recommendation prompted a backlash which has intensified ahead of the party conference this month.  Last month, Scottish Labour’s former finance spokesman Ken Macintosh urged his party colleagues to distance themselves from the plans, warning that they could backfire on the unionist party by devolving so many powers that the country would “effectively become independent by default”.

Days later, the situation deteriorated for Ms Lamont when it emerged that Scottish Labour MPs may be planning a boycott of the party conference over the situation.

In the most recent escalation, Friday’s Financial Times reported senior Labour sources indicating that the devolution commission would put forward a watered down “compromise” in a bid to avoid the embarrassment of a boycott, with one Labour MP told telling the title that further devolution powers would result in a “zero sum game”.

“There is this idea that somehow giving freedom over income tax is some kind of magic bullet,” one Labour MP told the FT, “It is a zero-sum game to try to out-nationalise the nationalists.”

According to the FT, one Labour MP dismissed his MSP coleagues. “It is a small gene pool up there, isn’t it?” he said. “They have always had a reputation for factions and infighting.”

Former Labour First Minister Henry McLeish warned that split could lead to major problems for Johann lamont. “I do fear that the party is in danger of getting itself into some real difficulties,”

In a blow for Ms Lamont’s leadership of the party, the FT reported that she was having “difficulty establishing herself as a strong leader”, while Linda Fabiani MSP, who sits on the Scottish Parliament’s Referendum Bill Committee, said the feud showed that Westminster was still “calling the shots” on the party’s decisions in Scotland.

“The news that Labour’s already weak proposals for more powers are to be watered down even further in a ‘compromise’ with MPs in Westminster is a serious blow to Johann Lamont and puts an end to the absurd pretence that the powers Scotland needs can be delivered after a No vote,” she said.
 
“Johann Lamont’s leadership has been hamstrung from the beginning by the splits between her party’s Westminster and Holyrood factions – Scottish Labour MPs are even threatening to boycott the party’s conference later this month.  Ms Lamont was supposed to be the leader of all of the Labour party in Scotland – but this spat over more powers shows that Westminster is still well and truly calling the shots.

“A Yes vote means we don’t need to rely on grubby deals and compromises between Labour’s warring factions – with independence, Scotland will have control of all the powers we need to grow our economy and create a fairer society.”

Pressure has been piling on Ms Lamont over the policy as the party conference approaches.  Last month, Glasgow MP Ian Davidson warned the income tax plan would “undoubtedly be to Scotland’s detriment” and result in the loss of the Barnett Formula.

While Scottish Labour sources have insisted there are no rifts within the party, the Financial Times reported the group’s “reputation for factions and infighting” and Mr Davidson said the party was split “from top to bottom” over the issue.

The worsening crisis has not been helped by developments at local government level this week after Labour councillors in Aberdeen attempted to ban government ministers – including First Minister Alex Salmond – from entering council buildings on official business following a row over budget.