Salmond backs off independence

We’ve been neglecting Scotland lately but the Economist has come to our rescue. Cutting through the thicket of Alex’s latest manoeuvres, the posh paper notes that the wily First Minister has put independence on the back burner- even though he’s still formally committed to holding a referendum on independence before next May’s elections – if only the Holyrood majority would let him, which they won’t. Instead, he’s playing a longer game.

Scotland, he argues, should be responsible for setting and collecting nearly all the taxes it pays (EU rules forbid geographical variations in VAT within a member state) and should then pay a chunk of them to Westminster in exchange for services such as defence. A similar system operates in the Basque country of Spain, and a rudimentary form of it operated in Northern Ireland when the Stormont Assembly was set up in 1921.

Well, we know  they mean the old Parliament that moved to Stormont in the 1930s. And through the Joint Exchequer Board, we got more back than we put in, to the frequent annoyance of the Treasury.

But today who in their right mind would want to exercise the Calman 10% tax varying powers the UK government are about to introduce? Before they bring forward the Calman Bill,  Holyrood will have to give consent, as Devolution Matters points out. Salmond’s proposal has its attractions – if only Whitehall would accept his calculations over “Scotland’s Oil” which they wont.  Still, an interesting poker game will ensue in Edinburgh.

Attention is already turning to next May’s elections, when a big question will be –will the Lib Dems become the surrogate for the Westminster coalition as a whole, thereby reducing Cameron’s chronic democratic deficit north of the border? Or will they keep their independence  or  line themselves up as Labour’s potential coalition partners once again? What an  interesting set of choices!  Either way, the gap between politics north and south of the British border seems set to widen – but within the Union.