More Powers, More Pain: Analyst

6 October 2014, 06:05

More powers could mean more pain for Scottish taxpayers as it will force Holyrood to make some "very awkward tax and spending decisions'', a political analyst has warned.

Politicians arguing for greater tax and spending powers for the Scottish Parliament should be careful what they wish for, according to Institute for Government director Peter Riddell.

He expects the overall governance of the UK and the relations of the nations and regions to remain "murky and unstable'' until after the general election.

Mr Riddell, a former Financial Times journalist and privy counsellor, will address the David Hume Institute in Edinburgh on Wednesday.

The seminar will be chaired by former top civil servant Sir Muir Russell, permanent secretary to the Scottish Executive during the first Labour administration.

Mr Riddell is expected to say: "Scotland will get a firm and detailed commitment to legislation immediately after the May 2015 UK general election to devolve considerably more tax powers to Holyrood and more limited control over welfare spending.

"However, far from meaning a larger net financial transfer from London to Edinburgh, the effect is likely to be some very awkward tax and spending decisions for the new Scottish government elected in May 2016. More powers could mean more pain, or be careful what you wish for.

"The outcome of the September 18 referendum is much clearer for Scotland than for the rest of the United Kingdom.

"While there are strong political and electoral incentives for all the unionist parties to honour the pledges made towards the end of the referendum campaign, there is no such common interest on other questions, notably those affecting England and the Westminster parliament.

"The debate on these matters in England is still in its infancy and is tied up with calculations of advantage ahead of a UK general election in little more than six months' time.

"Labour favours a transfer of money to city regions to handle a range of infrastructure projects but is wary of any move towards a more federal structure within the UK which might make it harder to govern at Westminster.

"The Conservatives face a demand for action on the 'English question' from many of their own backbench MPs concerned over allegedly favourable treatment for Scotland and is facing a challenge from a resurgent UK Independence Party.

"While Labour wants to play it long, talking of a constitutional convention in a year's time, the Conservatives want an early commitment on 'English votes for English laws'.

"There may also be early action to take forward the 'Silk' process of fiscal devolution in Wales and, less certainly, in Northern Ireland.

"The probability is that these arguments will not be resolved over the coming months but will get pulled into the general election campaign and the way forward will not be clear until after the general election.

"So, the overall governance of the UK and the relations of the nations and regions will probably remain both murky and unstable.''

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