Fresh doubts over more powers pledge as Lib Dems rule out different UK tax rates

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Monday, 11 August 2014 22:11

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  By Martin Kelly
 
A pledge by pro-Union parties that Scotland will receive new tax raising powers in the event of a No vote have been further called into question after it emerged the Lib Dems have ruled out variable tax rates across the UK.
 
In a letter to Plaid Cymru leader Leanne Wood, Chief Secretary to the Treasury Danny Alexander has confirmed that the policy of the UK Government was to prevent parts of the UK from setting independent tax rates in each band to prevent one part of the UK benefitting “at the expense of the UK as a whole”.

The emergence of the letter which rules out allowing parts of the UK being to set independent tax rates in each band, contradicts recent comments from Lib Dem leader Nick Clegg in which he said that he supports the full recommendations of the Silk Commission on devolution in Wales.

The SNP has insisted Mr Alexander’s communication is confirmation that the Lib Dems say one thing in campaign mode and another when they are in government.

The revelation follows on from comments from London Mayor Boris Johnson in which he said that there is “no need” for Scotland to have more powers in the event of a No vote.  Mr Johnson made the claim on the same day he signalled his intention to run for the leadership of the Conservative party.

Commenting on the apparent contradictions within the No campaign, SNP MSP Kenneth Gibson said:

“Yesterday we already saw Boris Johnson let the cat out of the bag saying that there is ‘no need’ for more powers – showing us what the Tories are really thinking.  This revelation shows that the Lib Dems are no better.

“The Lib Dems claim to be in favour of federalism – and have been talking about it for 100 years – but when they have the power to act, they simply toe the Westminster line.

“This only confirms that the No camp will say one thing during the campaign and do another thing in government – we simply can’t rely on them to deliver the powers we need to grow our economy.

“A Yes vote is our one opportunity to have Scotland’s future in Scotland’s hands – and to have all the powers we need to make Scotland’s wealth work for everyone who lives here.”

In his January letter, Danny Alexander stated: “We have been clear that tax devolution should not benefit one part of the UK at the expense of others, but should be a lever to generate additional growth. Requiring any change in the Welsh rate to be the same for all bands is consistent with this approach.”

Mr Alexander warned that if the rates paid by the upper bands were lowered there would be a “considerable incentive for high earners to move across the border, benefiting Wales at the expense of the UK as a whole.”

Responding, Plaid leader Leanne Wood said: “In the first instance I think it is time the Deputy Prime Minister came clean and actually spelt out where his party stands. As the letter I received from the Lib Dem Treasury Minister clearly shows, in Government the Lib Dems have no intention of contemplating tax devolution that might lead to Wales being equipped with the powers needed to kick-start the economy.”