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More powers for Holyrood? Don't believe the hype

IT'S not so much a Dutch auction as blind man's bluff.

The Scottish opposition parties seem all over the place on the question of "more powers" if Scotland votes No. Labour are split; the Tories can't make up their minds; and the LibDems have offered a form of federalism that is arguably more radical than the SNP's independence-lite. However, while all is confusion in the No camp, I wouldn't rule out the UK parties feeling their way toward a common position by the end of May.

Why do I say this, when all evidence is to the contrary? Well, look at the opinion polls. The support for Yes has risen during February. The latest Survation poll in the Daily Record suggested that there need only be a 5% swing for Yes to prevail. I don't believe it is as close as this, but there are worried brows in Whitehall. The Unionists threw everything at Fearful February, yet the polls did not move in the right direction.

It may seem surprising that so many Scots still support independence after being told, day after day, in the Scottish press that mortgages will rise, pensions fall apart, food prices rise, the banks will leave, the oil will run out and debt levels will soar as Scotland becomes a basket case thrown out of the European Union. Short of threatening to kill the first born, there's not much more stick that the UK can apply. So, the ­thinking is now moving to carrot.

The UK political establishment knows where its common interest lies and it can work together when it wants to. We saw this in February when George Osborne made his declaration of monetary exclusion and was supported by his Labour shadow, Ed Balls, and the LibDem Treasury Secretary, Danny Alexander. Are they not equally capable of coming up with a common agreement for more powers?

Gordon Brown last week put forward a kind of minimal-devo plan that could just possibly achieve common agreement. His package involved the devolution of a bit more income tax, some other minor measures. This constitutionalism betrayed the influence of Sir Menzies Campbell, who has long been close to Brown. Labour are split over giving the Scottish Parliament full powers over income tax, with MPs fiercely opposed while the Scottish party's devolution commission has taken the idea seriously. Brown's plan is an obvious compromise.

The missing link is the Tories, which may explain why Lord Strathclyde, who is in charge of their "more powers" commission, was conspicuous by his absence from the Tory conference this weekend. The Tories are deeply divided over devo max, with Lord Lang, the former Scottish Secretary, calling on them to avoid any talk of it until the referendum is good and won. And then presumably to forget all about it afterwards.

That may be overly cynical, but the opposition parties, and in particular the Tories, have a yawning credibility gap to traverse. After all, it was Lord Home who, in February 1979, called on Scots to vote No to Labour's proposed Scottish Assembly, because the Tories would bring in something better.

Of course, nothing of the kind happened, despite the resignation of Malcolm Rifkind. The Tory PM, Margaret Thatcher, kicked the issue into the long heather by saying that the various parties "could not reach a consensus" on any future devolution. It should be noted that, on Friday, David Cameron did not say that a No vote "will" lead to more powers, only that it "can", which somehow escaped the attention of the BBC reporters.

Scots actually voted Yes to that 1979 Assembly, by 52% to 48%, but even that didn't persuade the Westminster parties to honour the more powers pledge. Why? It was assumed that the Scottish question was over and the Scots had bottled it. For the next 20 years the oil flowed in abundance, solving the UK balance of payments crisis and bankrolling a new parasitical financial services economy based on the City of London. Scotland got the industrial clearances and the dole in return. It was the most remarkable act of misguided philanthropy since the native Americans sold ­Manhattan Island to the Dutch for $24. It will take more than solemn pledges for Scots to believe in any new promises to vote No and get something better. They saw what happened to the Liberal Democrats' pledge to oppose university tuition fees after 2010. Westminster, not Holyrood, would have to legislate for further devolution, and after a No vote from Scotland, all pressure would be off it. Tory MPs in England would insist that any changes were accompanied by a cut in the Barnett Formula and a reduction in Scottish representation in Westminster. Labour would oppose that as they need those MPs to form a majority in parliament. The LibDems, as usual, would be largely irrelevant.

Westminster would hold a Great Debate on Scotland, but any pre-referendum agreements would likely evaporate in the heat of the argument, and the UK parties would certainly conclude that it is best to wait until the provisions of the Scotland Act 2012 come into force before deciding on further devolution. Implemented from 2016, this Act devolves 10p in the pound of income tax.

It is just possible that a common commitment to minor tax-raising powers and the guaranteeing of the constitutional status of Holyrood might survive this process. As I say, the LibDems and Labour will probably commit to something along these lines in May, and it is possible the Tories could endorse it. After all, a few pence on income tax and a bill of rights hardly amounts to the break-up of Britain. But even if this made it to the legislative stage it would not amount to devolution max, and might actually be a step backwards.

Oil revenues would not be included, without which the fiscal numbers for Holyrood don't add up. Welfare would still be a UK responsibility. Business taxes would not be devolved, nuclear weapons would remain in the Clyde, UK immigration controls would still be imposed on Scotland.

Any new tax-raising powers proposed by the Conservatives will almost certainly form part of a plan to reform the Barnett Formula and will serve to cut public spending drastically in Scotland. This is because more is spent here than is raised in direct taxation. Scotland would need business taxes and crucially oil revenues to balance the books. But on this basis the Tories could put their signatures to a three-party pledge to devolve more tax.

This is why the decision that Scots will make in September is such a difficult one. Most are not nationalists and want to salvage something from the UK, which they helped to build. But the old UK isn't on offer, and after a No vote, there is a risk that Scotland will fall off the Westminster map, as it did after 1979. It's a tough call.

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