Ulster Unionist peer Lord Empey has given his reaction to the proposals of the Smith Commission on the future of Scottish devolution and in particular, the lessons that it contains for Northern Ireland.
Speaking from Westminster, Lord Empey said:
“In the heat of debate about Scottish independence, it is often forgotten that the Scottish Parliament has always had powers to alter rates of income tax, and its tax raising powers were enhanced by the latest Scotland Act 2014.
“It is telling that at no time since 1999 has the Scottish Parliament exercised its tax varying powers.
“Now, however, it is being given the power to set the rate and bands of income tax and keep all the proceeds. The only exception is the personal allowance which will remain a Westminster competence.
“There is also mention of some powers over VAT, but what probably is most noticeable is the power over Air Passenger Duty (APD). This could have an impact on Northern Ireland on both tourism and commerce, if the Scottish Parliament was to aggressively reduce APD.
“Corporation tax has not been mentioned yet, so we await with interest announcements next Wednesday when George Osborne will deliver his autumn statement.
“Powers are to be devolved over some benefits such as DLA, but not the full suite of responsibilities for the benefits system as a whole.
“While today's announcement was as a result of the panic announcement and so called 'vow' delivered by the three Party Leaders in the run up to the referendum, I fear that those campaigning for more power from London will have achieved a pyrrhic victory.
“I think the Treasury will be quite pleased with today's outcome, if this becomes law, as Scottish politicians will be faced with the responsibility for raising their own revenues from income tax and other measures. They will soon learn, and it will be clear for all to see, that revenue raised in Scotland will fall far short of that required to maintain public services. Any significant increase in taxes will result in flight of people to England, especially those in the financial sector which is very important to the Scottish economy.
“The tax increasing rhetoric of the Scottish nationalists will come face to face with the reality of maintaining a steady stream of income and maintaining job growth.
“I do not believe that Northern Ireland should be seeking powers over income tax. Look at the financial omnishambles we are in at the moment at Stormont. Who would want to put more tax raising powers into the Executive at the moment, when they can't agree how to exercise the powers that they have already?
“I fear that we are a long way away from the time that Stormont has the maturity to exercise such important powers with anything other than ideologically driven rhetoric that we hear from some politicians.
“Of further note is the proposal to introduce the principle of a weighted majority of 66% into decision making in Scotland. At present it is proposed that this should apply to electoral issues. Perhaps this is something that will raise its head again in the context of other policy areas, and I wonder could this have any application in Northern Ireland?”