Smith Agreement allows freedom to reconstruct the welfare system

HE evening of the Smith Agreement found me sitting in a BBC studio with four of my fellow commissioners.

The presenter introduced us by misquoting a Rolling Stones song. “You can’t always get what you need,” she said. Actually, the lyric is: “You can’t always get what you want.”

It goes on “But if you try sometimes you just might find, you get what you need.”

That is not a bad summary of Smith.

Labour needed a package which entrenched the Scottish Parliament, protected the Barnett formula and delivered extensive new powers over tax and welfare, in other words fulfilled the referendum campaign “vow”. Smith does that and more.

We had to try hard, listen to others, shift significantly from our starting point, but we did exactly that.

Meanwhile, Scotland needed a powerhouse parliament, with fiscal responsibility to match the high level of legislative power Holyrood has had since its inception. That is what the Smith Agreement delivers.

This is a transformational package, because it will see Holyrood responsible for around 60 per cent of the funds it spends, £20 billion more in tax, including all personal income tax on earned income, and it devolves full responsibility for around £2.5 billion worth of benefits for the elderly and disabled.

With the Smith Agreement we can, if we choose, reintroduce a 50p tax rate for top earners, and a 10p rate to help lower earners.

We can redesign the work programme to get people into work more effectively, redeploy hundreds of millions of pounds worth of disability benefits to re-inject dignity and respect into the system.

We can attack child poverty by supplementing child benefit for families under stress, reform carers allowance to give carers the rights they deserve, and finally, match attendance allowance and DLA to our own Scottish system of care of the elderly.

In fact, Smith will enable us to create new benefits of our own, something currently disallowed by the Scotland Act.

Thus we can construct a whole new Scottish welfare system of benefits, built on the guarantee of UK-wide provision of pensions, social security and child benefit. Yet Smith provides more, beyond tax and welfare.

Coastal communities can be given the income derived from their own shore and seabed, we can use extended borrowing powers to build the houses we need, decide for ourselves about fracking, gender balance on the boards of public bodies, bring ScotRail back into the public sector and give 16 and 17 year olds the vote.

Federalism was never promised, but a report by the Parliament’s independent research library showed Smith will make Holyrood more powerful than the devolved legislatures of federal Germany or Australia.

Of course, “you can’t always get what you want”. Labour would like to have seen full devolution of housing benefit, a further £1.7 billion, which we think we could deploy more effectively to increase housing stock.

Some submissions to Smith argued for devolution of parts of the welfare system which we decided against, on advice they are highly cyclical, and devolution would increase the risk of cuts to benefits.

Some academics warned of additional fiscal risk from income tax devolution, but commissioners felt more power inevitably means risk.

A post-Smith Scottish Parliament will be a grown up legislature indeed.

If only we could say the same of all Scotland’s politicians.

The SNP participated fully in Smith. Yet before it even came off the presses our new First Minister was hard at work, denouncing it on Twitter.

At the launch, John Swinney chose to list powers not included and dismissed those contained in the agreement on which the ink of his signature was not even dry.

Within the week, SNP councillors were ceremonially burning the document.

What a dismal and depressing response to a dramatic step forward for Scotland.

Nicola Sturgeon may not have got what she wanted, but if she tries she just might find she has got what she needs to make Scotland better. She should get on with it. Iain Gray MSP was one of Labour’s two commissioners on the Smith Commission.