Ian Swanson: Lamont bid to outflank nationalists

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LABOUR has staked out the ground on which it plans to fight the rest of the referendum campaign – and it boils down to socialism versus nationalism.

At its conference in Perth last weekend, the party repeatedly highlighted its pledge to raise the top rate of tax to 50p in the pound for people paid more than £150,000 a year – and contrasted that with the SNP’s plan to cut corporation tax for big business to three per cent below whatever rate the UK sets.

And in her speech to conference, leader Johann Lamont took a swipe at nationalism by arguing it was not common Scottish identity between landowners and crofters or factory bosses and workers that had led to land reform and workers’ rights, but the struggles of ordinary people.

Labour’s proposed package of 
further devolution, Powers with a Purpose, seems to have succeeded in defusing the anger of some of the party’s Westminster MPs who had reportedly threatened to boycott the conference if they were expected to endorse the transfer of full control of income tax to Holyrood.

But offering less in the final plan than was envisaged in the interim report inevitably looks like retreat.

And the compromise – responsibility for three-quarters of income tax – prompted some surprisingly strong criticism from the cross-party Devo Plus group, whose chairman Ben Thomson branded it “extremely disappointing”, “a lacklustre effort” and “nothing more than tinkering”.

Former First Minister Henry McLeish also described it as disappointing. But Labour’s promise to tax top earners attracted enough attention to overcome the grumbles about the watering down of the original proposals.

Higher taxes are not usually seen as a vote-winner. Labour’s “shadow budget” in 1992, which proposed increasing the top tax rate from 40p to 50p and removing the national insurance exemption from high earners, was blamed by some for the 
party’s failure to oust the Tories at that election.

And the SNP’s “Penny for Scotland” campaign at the 1999 Scottish Parliament elections – foregoing a recently announced 1p income tax cut to raise extra cash for public services – saw the party disappointed at the polls.

But Labour sources claim the banking crisis and the recession have changed the public mood. “There is more support for the rich paying more tax when times are hard,” says one.

However, Labour’s bid to reclaim the cause of social justice is hampered by the speech Ms Lamont made 18 months ago, calling into question all the free provision introduced since devolution – tuition fees, personal care, bus travel for the elderly and prescriptions.

Ms Lamont’s defenders argue that these universal benefits – some introduced by Labour – are subsidising middle-class people who can afford to pay. But universal provision, like the NHS, creates social solidarity, sets a standard of service from which everyone benefits and removes problems of stigma and low take-up.

It would send mixed messages, to say the least, if Labour were to promise higher taxes for the rich and at the same time threaten to take away free prescriptions, personal care and bus travel and make students pay for their university tuition.

Labour’s repositioning exercise represents a fightback following the SNP’s success in appearing to outflank Labour on the left. It is also a welcome step towards focusing on what kind of Scotland could be shaped in future and whether it requires independence to achieve it.