Jim Murphy MP, contender for the leadership of the Scottish Labour Party, today announced his support for devolving income tax to the Scottish Parliament, and for increasing the top rate of tax in Scotland to 50p if he is elected First Minister.
Welcome to the Mitchell Library and to the magnificent Burns room. I appreciate you all being here today.
I won’t overburden you with poetry in this speech but I will talk more than a little about Robert Burns’ other occupation.
For of course Robert Burns was a taxman by profession. And if tax is too often a dirty word we have to remember that it is the prose that underpins the poetry of our campaigning.
The great moral commitments of our NHS, our welfare system, our foreign aid are paid for by tax. It is our shared bond with society, how we pay our dues for the opportunities afforded us by our neighbours and friends.
And we know we have lacked a little poetry in Scottish Labour of late. Lacked the passion that we feel but have too seldom shown.
When I launched my campaign to be leader of the Scottish Labour Party I did so with an apology to Scotland. Labour hadn’t listened to the Scottish people. In 2007 they tapped us on the shoulder and told us we weren’t good enough.
In 2011 they whacked us over the head with a hammer. Their message was clear – we hadn’t listened enough, and we weren’t ambitious enough about Scotland’s potential.
But saying sorry isn’t enough. People understand that an apology is only sincere if it is followed by change. So today I want to begin to show the change that Scotland wants to see.
This is an important week for Scotland and for Labour. The delivery of the Smith Commission’s conclusions will set the framework for our future constitutional relationship within the United Kingdom. Scottish Labour agreed to work through the Smith Commission. We approach the Smith Commission with a genuine enthusiasm and genuine commitment to getting a new, radical devolution settlement.
I hope that all other parties which have sat round the table with us will meet their own vow – to make devolution work, rather than play politics. All parties must respect the ambitions and wishes of the two million that said Scotland should remain part of the UK. All parties must understand the frustration and anger felt by many Yes voters.
Sometimes we have to remind ourselves that Scottish Labour has always been the party of devolution. A commitment to devolution alongside a Living Wage, full employment and better housing were Keir Hardie’s founding promises.
There have, of course, been vows in the past:
- Scottish Labour vowed to create a Scottish Parliament and along with the people of Scotland, we did;
- Scottish Labour vowed to go further, through the Calman Commission which I helped oversee when I was Secretary of State for Scotland – and we did.
- Scottish Labour vowed to co-operate with others through the Smith Commission – and we have done.
Why then, with such a strong history of delivering on devolution has the original party of devolution given the impression, so often, to be reluctant devolutionists?
The real difference between Scottish Labour and other parties when it comes to constitutional reform is that we have never seen it as an end in itself but as a means to an end. We want the best constitutional settlement for Scotland because we want the best deal for Scotland – it’s never been any deal but the best deal.
However, our determination to ensure that Scotland got the best deal has looked from outside like caution or, worse, self-interest. Sometimes in the past it has seemed like Scottish Labour were more interested in Labour than Scotland.
That is why it is important that this week we make it clear that we are enthusiastic supporters of a new devolution package that not only meets our Vow but goes further.
I believe that the Smith framework we will be working within will offer huge new opportunities for Scotland. All parties should be invested wholeheartedly in the success of these new powers.
Even before the Smith Commission reports, we should agree to the full devolution of income tax to Scotland, if that is what emerges.
This is a significant moment for Scottish Labour. It is as important a change for the Scottish Labour Party as the rewriting of Clause Four was for the UK Labour Party.
We will not only meet our promise on more powers for Scotland, we will exceed it.
It is a clear signal to Scotland that we have changed, that we get it, that we will stand up for Scotland and that the Scottish Labour Party that I lead will always put Scotland first.
On this central issue, we have listened to the people of Scotland. When I toured the country the call for change, from Yes and No, was overwhelming. I know how welcome delivering on more powers will be.
This is also a big moment in the history of the Scottish Parliament. It will create the clear connection between the raising of taxes and the spending of revenues which is in many ways missing at present. This will result in there being no hiding place for those parties who want to talk about radical politics but then fail to deliver them. It will go a long way towards eliminating the blame game which has been a feature of Scottish politics for so long. There will be nobody else to blame.
If a Scottish Government wants to spend more, it will have to raise more. No Scottish government of any party will have anyone to blame but itself. The buck will stop in Scotland.
I want to say something unusual.
I know its conventional wisdom that a party that promises to put up taxes doesn’t win elections in Britain (and Alex Salmond’s Penny for Scotland campaign in 1999 contributed to his defeat). But I have faith in a Scottish sense of justice and fairness and I want our instincts and solidarity to be reflected in our tax system. I am a democratic socialist standing to lead a democratic socialist party.
We believe that those who can afford it should pay a little more while those who have least should not see the little they have, in money and services, taken away from them.
The policies we pursue need to help those who need politicians to offer real help rather than warm words.
So when a party says that it is going to attack poverty, increase educational opportunity and properly fund our National Health Service, it also has to be clear about where the money is going to come from.
The long days of the blame are now gone.
Famously in America the cry was of ‘no taxation without representation’. Well in Scotland the reverse is now also true.
Without responsibility to the electorate for how these monies are spent governments can claim the credit and shirk the blame. That does not make for good government. It makes for bad decisions and the value of rhetoric before the hard truths of reality.
The days of assertion without any evidence must also come to an end. The Americans have a modern day saying for this: post-truth politics. When just saying it loud enough and often enough will make it true. When the academics and journalists who reveal inconvenient facts or maybe just ask questions are discredited, accused of bias and dismissed.
I will not shirk from the task of holding any government to their word. If others tell us they are progressives, social democrats or democratic socialists I will look first to the evidence rather than to the press releases.
To quote Robert Burns:
“It’s hardly in a body’s power,
To keep at times from being sour,
To see how things are shared.”
There has always been a Scottish anger at inequality. The question is: what are those of us who feel this anger going to do about it?
Today I want to announce that a Scottish Labour Party, under my leadership, will introduce a 50p top rate of tax for the wealthiest earners in Scotland – those earning over £150,000.
Labour has created the opportunity to have a more progressive tax system in Scotland than in the rest of the United Kingdom. What is the point of having that power if we do not use it in order to fund Scotland’s priorities which we see in our communities and in the statistics of deprivation?
We will set out in more detail in the coming months exactly how we will use the revenues this will generate but I want to prioritise creating a more prosperous Scotland by supporting small businesses at the same time as fighting poverty.
I will never talk about social justice without willing the means to tackle it in a sustained and radical way. My patriotism and my sense of belief in my fellow Scots means that I want to ask you to help me build a fairer Scotland that benefits us all.
I hope Nicola Sturgeon joins me today in a commitment to use tax-raising powers to address the inequality and disadvantage which blights Scottish society.
I have made my policy clear. It’s time for the leaders of the other parties to do the same. Asking the wealthiest few to pay a little more, we will also address the issue that while services are being cut for the least well off, the wealthiest gain from universal benefits.
I want to be clear. I believe in universalism as a principle. I believe that if you have paid into the system all of your life, you are entitled to get something back out – and not just when you fall on hard times. But universalism can only be funded honestly and responsibly through a fairer tax system.
That is what a something for something society is about. And that is the balance that I aim to achieve.
We have also been very clear that the new devolution settlement should maintain the areas of expenditure where being part of something bigger makes Scotland stronger. There are clearly matters in which pooling and sharing is in Scotland’s interests.
A shared pensions system most definitely comes into that category and should be maintained. Our pensioners need and deserve the security and solidarity of the UK pensions system which they have paid into all their working lives. “Scotland’s population is ageing, and ageing somewhat more rapidly than the other UK countries” as the Scottish Government themselves acknowledge.
Total employment is due to fall by 1.5% compared to a 6% rise in the UK as a whole over the next generation. It is good for Scotland to be part of the bigger UK pensions system. But in other areas of social security we can strike a new balance.
Our grandparents’ generation created a post-war welfare consensus and did so by treating the nations and communities of the UK as one with a unitary need. However the post war consensus of one size fits all suits no-one today.
On welfare our challenge is keep the strengths of being part of a bigger system while giving our cities more power to tackle the worklessness that has been passed from generation to generation. If tax and welfare are how we ensure a fair distribution of resources between income divides, then the Barnett formula is how we ensure a fair distribution between the regions and nations of the UK.
The commitment to the Barnett formula, which I hope and expect the Smith Commission to endorse, is absolutely vital for Scotland and our public services.
The test of the Smith Commission is whether it makes Scotland better off. A commitment to maintain the Barnett Formula passes that test. It is good for Scotland.
I have no wish to refight the battles of the referendum, but let us not forget that the alternative to Barnett is the devolution of oil revenues to Scotland. Well, that is now a gamble that we can measure against reality. The Scottish Government White Paper planned the public finances of an independent Scotland on the basis of oil revenues of $113 a barrel. Today the price stands at $80 a barrel. Indeed the oil price has only been at the SNP’s predicted level for a total of four months, and that was 6 years ago. At no other time in history has it been that high.
We’ve all seen how the forecourt cost of petrol has fallen. The price cut that motorists are now enjoying at the pump would be matched by the misery of spending cuts to public services. That clearly wouldn’t be good for Scotland.
With genuine agreement on Smith’s proposals , these are arguments we can now leave to historians. After this week, with a new devolution consensus, we should no longer be asking one another if we are yes or no voters. Instead we should only ask what we can each do to make our great nation fairer.
It’s time to put the disagreements of the referendum debate behind us and to use the new powers for the common good. There are huge tasks ahead.
We should be saying where money will come from to fund the radical, transformational programmes to which we are committed. And anyone who fails to say so does not deserve to be believed. That is the ground on which Labour must campaign and which, under my leadership, we will campaign in every street, every town, every community where Scottish Labour’s values now need to be refreshed and reasserted.
A party that can say: not only have we kept our promises on powers, we have exceeded them. A party that doesn’t just talk about wanting a tax power, but which knows what it wants to do with it.
This week we will deliver on the promises we made to Scotland. Whether we now deliver on the promise of a better Scotland is down to our collective imagination and our political will.
Through the Smith Commission, Scotland will shortly have the powers and under my leadership the Labour Party will have the purpose to build a nation built on a fairer ambition.
It is in now our hands. Let’s together build that country.