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Clobbering the rich is fine ... but why cap the poor?

SCOTTISH Labour's guiding principle, said Johann Lamont last week, is to make this "a fairer, more socially just society".

As veterans gathered in Perth for the party's spring conference would probably add, fine principles are not much use without the power to make them a reality. In Edinburgh as in London, Labour has no power.

There are reasons for that. In Scotland, the estrangement from once-loyal voters that began in 2007 became something like an annulment of ancient vows in 2011. By every measure, in every region, Labour was thrust aside by the SNP.

Roles had been reversed. In 1999, Donald Dewar's Labour came top with just over 908,000 constituency votes. In 2011, Alex Salmond's SNP defied every prediction by securing 903,000 votes from that part of the ballot, and by doing so on a greatly reduced turnout. Labour's core was hollowed out.

Party loyalists would like to believe it has been in recovery since. Don't all the polls attest that it is leading the No campaign to victory in September's independence referendum? Won't that puncture the SNP's bubble once and for all? Scottish opinion is not so easily led.

Take a Survation poll conducted earlier this month for the Daily Record. It showed that while the gap between Yes and No sides is closing, supporters of the Union retain an 8.3% lead (with 13% undecided). When the same survey asked the same voters how they would cast constituency votes in a Scottish election, the reversal of fortunes was stark: SNP 44.6%, Labour 34%.

The snapshot contained a simple picture. While traditional voters might not yet be ready for independence, they are in no mood for what Labour is selling. And what follows if that unforgiving opinion begins to have an impact on the referendum campaign?

Yes Scotland and Better Together both understand the essence of the contest. It will hinge, obviously enough, on those who have yet to make a choice. But it will also depend, first, on those who do not make a habit of voting; secondly, on those who were once loyal to Labour. The Scottish working class, if it can be persuaded of the arguments and persuaded to turn out, will decide whether the country becomes independent or not.

Hence a document published last Monday entitled Powers For A Purpose: Strengthening Accountability And Empowering People. This, in the jargon, is Labour's "offer" to those it might persuade to vote No in September, the long-awaited answer to the question of "more powers". But the paper, in barely 16 pages of text, has another aim: it is also supposed to persuade alienated former voters that Scottish Labour remains a radical - or "progressive" - force.

To that end, the incoherent mix of minimal tax and benefits policies nominated as ripe for devolution is neither here nor there. Lamont instead talked of the redistribution of wealth, of "reversing Tory tax cuts for the rich", of ensuring "that those with the broadest shoulders must bear the greatest burden". So rates of tax in the higher and additional bands could go up (but not down) and those living in expensive houses could expect to pay more.

In some quarters the reaction made it sound as though the red flag had once again been raised over George Square. The fact that Lamont seemed to be talking about the same 50p income tax rate as has been proposed by Ed Balls, the shadow chancellor, got overlooked. Equally, her version of a "mansion tax" would appear to differ little from schemes for £2 million homes being discussed at Westminster by Labour and the LibDems. It hardly mattered. These were symbolic gestures, gestures calculated to reassure voters who believe that Labour long ago lost whatever progressive instincts it possessed. The proposals were meant to carry the fight over social justice to the SNP and dispute (or refute) the claim that only independence can guarantee a fair society.

Conservative types will object that the "rich" are not as plentiful in Scotland as they are elsewhere. If big houses are the issue, for example, the Financial Times reported recently that more stamp duty is

raised from property sales in central London than in Scotland and Wales combined. Equally, additional rate taxpayers - those with incomes above £150,000 a year - account for just 0.55% of the 2,720,000 who pay income tax. In other words, there are, officially, fewer than 15,000 of them.

But what of it? That handful contributes 15% of Scotland's £10.865 billion in total income tax revenues. Lamont reckons they can pay more. Who among traditional Labour voters would doubt it? Equally, if Yes campaigners want a fairer Scotland in the Scandinavian style, surely they accept that taxes must reach Scandinavian levels? Lamont's 50p challenge is aimed squarely at Alex Salmond, who as yet accepts no such thing.

Denmark, with a population comparable to Scotland's, would offer a comparison. As these things are measured it is the happiest country in the world, with the highest per capita income, remarkable social mobility, enviable income equality, the highest minimum wage, high educational standards (without tuition fees) and a very high GDP. But taxes consume 46% of Denmark's GDP. The British figure is around 37%.

A Danish miracle isn't on Labour's prospectus. If Salmond has failed to square the circle, Lamont has yet to recognise the need for geometry. In the week in which she talked of redistribution, Balls was conceding that if he and Ed Miliband are elected they will accept George Osborne's brutal cap on social security spending. So how will that play in working-class Scotland?

Some people might yet be surprised, equally, by what Lamont means by fairness. Just before the paper from her Devolution Commission was launched she gave an interview. In it she described a need to hold a "robust conversation" with voters. Her intention, it seemed, was once again to question free prescriptions, the council tax freeze, and the absence of university tuition fees. The assault on the rich begins to look like a distraction. You could hold high earners to account, but you could start by remembering that while they pay 15% of income tax they get off lightly where National Insurance (NI) is concerned thanks to the upper earnings limit. Income tax accounts for 22.8% of revenues in Scotland, but NI, at 17.9%, is hardly insignificant. Yet Labour has ruled out devolving that tax and left Lamont the victim of her own logic. If you mean to pursue social justice, surely you need every power available?

The SNP are not exempt from logic. The longer they continue, the more regressive a council tax freeze becomes. The more the party talks about fairness, the greater the need to explain the taxes required and why they are worth paying. If the working-class vote is on the move it is because it is inspired by the belief that change is possible, not merely negotiable.

If Labour win the next Westminster election, cuts will come thick and fast. Miliband and Balls have promised as much. Lamont's gesture will not hold back that tide. But her Scottish party fears another sort of deluge from the voters it once called its own.

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