Ian Swanson: How much does Smith Agreement offer?

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DESPITE warnings about a tight timetable and the tricky task of getting rival politicians to agree on anything, Lord Smith of Kelvin managed to produce his cross-party deal on more powers for Holyrood a few days ahead of the St Andrew’s Day deadline.

The Smith Agreement has been hailed ­variously as making the Scottish ­Parliament one of the most powerful devolved legislatures in the world or denying Scotland control over crucial aspects of the economy and welfare.

Although he brokered the deal and insists it offers Scotland a lasting and stable future, Lord Smith has avoided being drawn into discussing specific details of the agreement.

But the political parties who signed up to it are already at loggerheads about the proposals. It does not bode well for a general public consensus on the way ahead for Scotland.

At least part of the problem may be in the way the “more powers” ­proposals were arrived at.

In contrast to the referendum process, where there was universal praise for the level of public engagement and the high turnout, the package the Westminster parties now say they will implement is the result of a deal between politicians, agreed in secret.

Lord Smith says he held ­meetings across Scotland and received 407 ­submissions from various ­organisations and more than 18,000 emails from the public.

But the fact remains, the deal was hammered out as a ­political ­accommodation by rival parties behind closed doors.

And since the agreement was ­published, accounts have emerged of plans by the ­commission to give ­Holyrood more extensive welfare powers, as well as control over abortion law, lotteries and health and safety at work, all of which were scrapped in the final days of negotiations.

Appearing before a committee of MSPs this week, Lord Smith declined to discuss proposals which were left out of the final report.

It is intriguing, however, to reflect on the idea that the commission came close to proposing a substantially ­different set of powers for Holyrood.

Doubts have also been cast on how viable some of the individual powers which are now on offer really are.

Control of income tax – minus setting the starting threshold – sounds the strongest tax power the Scottish Parliament could expect. But ­nowadays income tax only ever goes one way. The UK basic rate has ­gradually been reduced from 35p in 1976 to the current 20p. A new top rate of 50p was introduced in 2010 before being cut to 45p.

So even if MSPs have full power to raise income tax, are they any more likely to use it than the limited 3p-up-or-down power which they have had since the start of devolution?

Once the power has been won, there will inevitably be a feeling it should be used. But with only limited other taxes under Holyrood control, any move to cut income tax would risk a fall in much-needed revenue.

Raising the top rate might be an attractive policy for anyone wanting to promote social justice, but economists have pointed out Scotland has only 18,000 people paying the 45p top rate, so that an increase there will bring in relatively little extra cash and it would take only a few of them to move away for the benefit to be lost.

Whatever view one may take of all the Smith proposals, when it comes to next year’s election, there is little choice. The SNP will continue to put the case for independence, but for better or worse, all the Westminster ­parties are signed up to the same plan.