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Labour leader calls for more than three-quarters of a billion in tax rises

Peter MacMahon interview with Richard Leonard Photo: ITV Border

It was a word Tony Blair could not bring himself to use, or when he did he had to insert a hyphen.

The former Labour Prime Minister would describe himself as a social democrat or, when pushed, a 'social-ist', but never a socialist.

That's not a problem the newly elected leader of the Scottish Labour party has. Richard Leonard is a full-blooded, hyphen-free socialist, and proud of it.

As such he's far more in tune with, and at ease with, the party's UK leader Jeremy Corbyn than was his predecessor Kezia Dugdale.

The question now for Mr Leonard is what does his socialism mean in practical terms for the Labour party in Scotland, and it's role in the Scottish parliament?

How does Mr Leonard translate the slogan "for the many not the few", a phrase borrowed without any apparent irony from Mr Blair's diluting (he said modernising) of Labour's socialist constitution, into practical politics?

On the basis of my interview with Mr Leonard for last night's Representing Border, the new Scottish Labour leader plans to put his money - and other people's money - where his mouth is.

If tax is a key indicator of political intent, Mr Leonard is certainly planning to be radical.

I asked him about the forthcoming Holyrood budget where MSPs will for the first time have to set income tax rates and bands.

His defeated rival for the Labour leadership in Scotland, Anas Sarwar, proposed plans to raise some £700 million by taxing lower earners less, and middle and higher earners more.

Mr Leonard told me that "the problem" with that proposal was that the £700m had to be seen in the context of what he said was a £1.5 billion cut to local government finances.

I asked him if he would like to raise more than £700m. His answer: "Yes, yes, because the scale of the cuts that we are facing, the scale of the cuts that we faced already, and the acceleration of those cuts announced by Philip Hammond last week means that we've got to take, in my view, more radical action."

Could Labour propose raising perhaps £1 billion in extra taxes? Mr Leonard replied he was "not prepared to speculate on a precise number..." but suggested his call for a wealth tax would play an important part in Labour's plans.

Now this is a whole different taxation ballgame. The new leader says just 1% of Scots have more personal wealth than the poorest 50% and he proposes a "one-off, windfall tax" which he says will raise £4 billion to spend on public services.

I pressed Mr Leonard on what this would mean and how would it work? He told me that wealth would be assessed based on people's income, plus their pension and property assets.

He says Holyrood could introduce this tax with powers given to MSPs under the original 1998 Scotland Act using what is called an 'order in council', a rather technical legislative device giving ministers powers to act.

Mr Leonard explained: "I think there needs to be an honest discussion about whether we can start looking, not just at people's income, which is where the Scottish parliament's focus has largely been, but whether we can look at the accumulation of wealth which is going on out there in society.

"If there was political will in the Scottish parliament, cross-party support for it, then there is absolutely no question in my mind that there would be a real difficultly for any UK government to accede to that demand."

Such rhetoric will be music to the ears of the Green party, which has long called for a wealth tax. Other parties may not be so enthusiastic.

The SNP while moving towards putting up income tax has so far been more cautious than even Mr Sarwar was.

The Liberal Democrats are closer to the Sarwar plans, but may also be reluctant to go further.

Which leaves the Scottish Tories as the only party saying taxes in Scotland should not be any higher than in the rest of the UK, a position which Ruth Davidson's MSPs believe is to their political advantage.

Now in considering all of this, it is worth remembering that Labour is not in power. They are the third party in Holyrood.

If the SNP can get the support of, say, the Greens it can get its budget through without support from other parties.

It seems highly unlikely Mr Leonard's radical approach will be supported by enough MSPs for it to be translated into reality. There may even be some in his own party who have reservations.

What we don't know is what effect, if any, his stance will have on the longer-term on the political debate over taxation and spending in Scotland.

The big question Mr Leonard's election poses is whether Scottish voters are ready for undiluted, unhyphenated, socialism? The new Labour leader is intent on finding out.

Mr Leonard's plans got a mixed reception from other parties at Holyrood.

Tory finance spokesperson Murdo Fraser said:“Richard Leonard’s eye-watering tax plans make Jeremy Corbyn look like a Blairite. To put it simply - a £4 billion tax grab would wreck Scotland’s economy at the stroke of a pen.”

“There is a real danger that, under Mr Leonard, Scottish Labour will drag the SNP leftwards, at a huge cost to taxpayers and working families. It only serves to demonstrate why we need a strong pro-growth opposition in the Scottish parliament to haul the SNP government back to the centre-ground. The Scottish Conservatives are determined to provide it.”

Patrick Harvie, co-convenor and finance spokesperson for the Scottish Greens, said:“A major test on the horizon for Richard is the forthcoming budget negotiations.

"Labour failed miserably this time last year when they decided to turn their face to negotiations from day one, meaning the party did nothing to protect local services while the Greens reversed £160 million of cuts.

"I don’t think people would forgive Labour if they did that again this year, but if they take a more constructive approach there’s a real chance that progressive opposition parties can force major changes from the Scottish Government.”

SNP MSP Ivan McKee said: "Richard Leonard's short tenure as Scottish Labour leader has gone from muddle to guddle - calling for nationalisation of utilities already in public hands, and now demanding taxes that are beyond the powers of the Scottish Parliament. We know he's new to the job but he needs to get a grip.

"Of course, we're always willing to work with other parties across the political spectrum to call for more powers to come to Holyrood - tools that will help to grow Scotland's economy, create a fairer society with more investment in public services."

Scottish Liberal Democrat leader Willie Rennie said: “Richard Leonard’s plans are all a bit vague. He needs to spell out what taxes he proposes if he expects people to take his spending commitments seriously.

"Liberal Democrats have set out a modest income tax increase for the specific purpose investing in education to make it the best again.”

You an see my full interview with Richard Leonard here: http://www.itv.com/news/border/update/2017-11-27/watch-mondays-representing-border/