Saturday, 15 November 2014

Alex Salmond: Scotland can't go on as a country blessed with full pockets and cursed with deep poverty

SCOTLAND is a hugely wealthy country – but for far too many people living here it doesn’t feel that way.

That was one key message of the Yes campaign during the referendum campaign.

And although we didn’t win the vote, that message remains just as relevant.

How is it that a country blessed with such huge resources still has deep pockets of poverty?

In recent decades the UK has become one of the most unequal societies in the developed world. And the Tory-Lib Dem austerity agenda is doing nothing to reverse that trend – quite the opposite, in fact.

While Labour may try to talk a good game on social justice, their record in office shows they are just as culpable for that widening gap between rich and poor.

The good news is there is a way out of the austerity trap, the cuts agenda and the obscenity of child poverty and food banks. Because although the referendum didn’t deliver independence, it has ensured serious and substantial new powers are coming Holyrood’s way.

The Vow signed up to by the Westminster leaders in this newspaper means there is now no alternative to delivering powers which give the Scottish Parliament real financial clout.

The powers have been described as “devo max”, “home rule” and, by Gordon Brown, as “close to federalism”. To live up to that billing, the powers must deliver full financial freedom for Holyrood.

Giving the Parliament full financial powers will tackle inequality and promote competitiveness, allowing businesses to thrive.

The experts who have advised me on economic issues met this week – and made clear that Scotland needs substantial devolution of control of taxation, not just responsibility for a small basket of taxes.

Being in control of a broad tax base will ensure that Holyrood is not over-reliant on one or two particular taxes for income.

And the Council of Economic Advisers made clear that having full power to vary the bands and rates of taxes is much preferable to being handed the revenues from particular taxes – which would create the illusion of more autonomy.

Take just one example – air passenger duty (APD). Giving Holyrood control of APD is backed by Scotland’s major airports and by big players in the aviation industry.

The UK has one of the highest rates of air passenger tax, strangling growth and preventing airlines from bringing flights to Scotland. With control of APD, we could attract more international flights, creating more jobs and opening up more of our economy to the rest of the world, while also cutting fares.

Holyrood should also get control of the welfare budget, a powerful tool to support jobs and reduce inequality.

It is vital the new powers being discussed by the commission deliver the financial tools we need to make the most of our economic potential.

I will be standing down as First Minister – but I will still be around to keep an eye on things and to make sure the Westminster parties deliver on their Vow.

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