Sturgeon letter queries Labour’s forty per cent devo-budget figure

Sunday, 30 March 2014 09:51

10 Comments

  By Martin Kelly
 
Claims by the Scottish Labour party that its proposals for extra powers for Scotland in the event of a No vote, amount to forty per cent of the Scottish budget have today been challenged by Deputy First Minister Nicola Sturgeon.
 
In a letter to Scottish Labour leader Johann Lamont, Ms Sturgeon has outlined a number of questions she says require clarification before the proposals can be debated seriously.

In her letter, the SNP deputy writes: “Following the publication of Labour’s Devolution Commission report, there has been great confusion about the extent of your proposals and whether they can even be implemented at all.
 
“You will be aware that they have been described as a ‘watered-down compromise’ and ‘striking’ for their modesty, with the suggestion that this compromise is the result of the need to secure agreement from those in your party hostile to the Scottish Parliament receiving any more powers.”

The Deputy First Minister also highlights apparent irregularities in Scottish Labour figures, pointing out that using a methodology advised by Labour themselves, calculations by the Scottish Parliament Information Centre (SPICe) show that no more than 35% of expenditure would be devolved.

She adds: “In the document you say under these proposals the Scottish Parliament will raise about 40 per cent of its budget from its own resources.
 
Ms Sturgeon asks: “Can you point me to the page number in your document which supplies the workings to substantiate your figure of 40 per cent?”

The Deputy First Minister also draws attention to suggestions that Scottish Labour removed from the Devolution Commission final report, elements of Scottish spending that were included in the commission’s initial draft report.

She writes: “Is it correct that Labour on the methodology advised to SPICe has excluded capital expenditure from its calculation of the Scottish Parliament’s budget?
 
“Have you therefore removed important elements of the Scottish Parliament’s budget to even get close to your 40 per cent figure?
 
“Is it true that you included these budget elements in your commission’s interim report last year, when you were minded to devolve income tax in full, but removed them for the final report? In other words, is it correct Labour has changed its measure of devolved expenditure from that used in its Interim Report?”

In what is sure to create tensions between the two, Ms Sturgeon then appears to imply the Scottish Labour party has deliberately set out to mislead the electorate, adding:

“Was this an attempt to artificially inflate the extent of the tax powers, in percentage terms, that you are now proposing should be under the control of the Scottish Parliament?  If so, this would be seriously misleading and needs to be corrected immediately. Given the language in your recent conference speech in which you launched personal attacks on others, you will obviously want to clear this matter up as soon as possible.”

In it’s final report, Ms Lamont’s Devolution Commission said: “Labour will give the Scottish Parliament the power to raise around £2 billion more in revenues beyond the recent Scotland Act, so that it raises about 40 per cent of its budget from its own resources.”

However the claims have already been challenged by pro-devo group Reform Scotland.  According to the organisation, the Labour proposals amount to Holyrood controlling only 26% of devolved expenditure.

Despite repeated questions over her party’s calculations, the Scottish Labour leader has steadfastly refused to accept they are wrong.  In a BBC interview broadcast at her party conference last weekend, Lamont rejected suggestions that the forty per cent figure was inaccurate and said “experts” had backed Labour’s figures.

 
Below is the full text of a letter being sent from Deputy First Minister Nicola Sturgeon to Scottish Labour leader Johann Lamont.

Dear Johann,
 
Following the publication of Labour’s Devolution Commission report, there has been great confusion about the extent of your proposals and whether they can even be implemented at all.
 
You will be aware that they have been described as a “watered-down compromise” and “striking” for their modesty, with the suggestion that this compromise is the result of the need to secure agreement from those in your party hostile to the Scottish Parliament receiving any more powers.
 
In the interests of clarity in order that your proposals can be considered and debated seriously I would be grateful if you would provide answers to the following questions:
 
In the document you say under these proposals the Scottish Parliament will raise about 40 per cent of its budget from its own resources.
 
(1)  Can you point me to the page number in your document which supplies the workings to substantiate your figure of 40 per cent?
 
I understand that a calculation by SPICe showed that, even on a methodology advised by the Labour party, the proposals would amount to no more than 35% of devolved expenditure.
 
Reform Scotland, however, have calculated that the Labour proposals amount to 26% of devolved expenditure, using the baseline of devolved expenditure in the latest edition of GERS and including the Labour proposals to devolve housing benefit and attendance allowance.
 
As you will be aware, the devolved expenditure identified in GERS is a comprehensive measure of current and capital expenditure of both the Scottish Government and local authorities.  It is therefore the full and accurate measure of the devolved budget.
 
(2)  Is it correct that Labour on the methodology advised to SPICe has excluded capital expenditure from its calculation of the Scottish Parliament’s budget?
 
(3)  Have you therefore removed important elements of the Scottish Parliament’s budget to even get close to your 40 per cent figure?
 
(4)  Is it true that you included these budget elements in your commission’s interim report last year, when you were minded to devolve income tax in full, but removed them for the final report? In other words, is it correct Labour has changed its measure of devolved expenditure from that used in its Interim Report?
 
(5)  Was this an attempt to artificially inflate the extent of the tax powers, in percentage terms, that you are now proposing should be under the control of the Scottish Parliament?  If so, this would be seriously misleading and needs to be corrected immediately. Given the language in your recent conference speech in which you launched personal attacks on others, you will obviously want to clear this matter up as soon as possible.   
 
It should be noted of course that Reform Scotland has calculated that under your proposals  the Scottish Parliament will raise in tax only 20.07% of total tax raised in Scotland.
 
In an independent Scotland all taxes will be under the control of the Scottish Parliament enabling any future Scottish Government to introduce policies in line with the wishes of the people of Scotland. 
 
As this is a matter of public interest I have released this letter to the media.
 
Yours etc,
 
Nicola Sturgeon

[PLEASE DONATE TO OUR LATEST APPEAL WHICH IS SEEKING TO RAISE FUNDS FOR AN ACADEMIC STUDY INTO THE REFERENDUM OUTPUT BY BBC SCOTLAND.]