As was pointed out in a letter to the Metro yesterday, the Scottish Government recently refused to increase the fuel duty rebate to Scottish bus operators as England and Wales have done in the face of rising fuel prices. This means the bus companies pass the high fuel prices onto the consumer, raising bus fares in Scotland when they have stayed stagnant in England and Wales.
Not content with that, our Government has also scrapped universal free installation of central heating for pensioners.
Complaining about a lack of money from Westminster is one way to handle criticism like this. Freeing up money by scrapping dubious SNP initiatives such as this, this and this is an alternative way, although this would, of course, entail the Scottish Government taking responsibility for its own actions.
Tuesday 3 June 2008
Saturday 31 May 2008
Show Me the Money
Facing the contradictions and deep structural flaws of their Local Income Tax plan, and now the growing public scrutiny of this proposal, the SNP have decided on a new media management tactic. The Scottish Government is now attempting to generate headlines that evoke a sense of economic competence, while ensuring these stories don’t touch on LIT itself – the bedrock of SNP economic policy.
So first we have:
“Swinney calls for oil revenue talks” – May 19
Here, Swinney writes a letter to Alistair Darling with the boilerplate SNP demand that “Scotland’s” oil profits be given to Scotland. This misses the reality that as the oil sits in British waters, it belongs to Britain as a political entity. However, even while based upon this premise, the first parts of the letter seem reasonable enough:
“...it is vital Scotland has access to and benefits from our own resources. It cannot be right that we have fuel poverty and soaring road fuel prices amid this energy plenty.
That is why I have written seeking talks on greater financial independence for Scotland, including a transfer of oil and gas resources to the Scottish Parliament, so that we can invest in Scotland's long-term economic interests.”
But then he gives the game away. If he is serious about securing these talks, why conclude the letter with this snippy and frankly inappropriate comment?
“Such a change would mean that we could invest these revenues in the future success of Scotland after decades of unfortunate decisions by the UK Government that have seen oil revenues directed towards filling the black hole in Britain's finances rather than being invested in the sensible manner adopted elsewhere.”
Because he needs a headline to divert media attention from LIT, which he calculates the media will begin to scrutinise if he doesn’t supply them with simple fodder like this. It worked for that day in both the Herald and Scotsman.
Next, we have:
"Salmond accused of stoking fuel row"
Salmond elaborates on Swinney’s argument here, linking the growing cost of UK domestic fuel to the financial windfall that Scotland could have if it acquired sole access to British oil revenues. The status quo is a “massive national outrage”, with this escalation of rhetoric seemingly indicating the pressures entailed in identifying new economic problems in order to disguise the ones Swinney is creating.
No mention here of the possibility of LIT alleviating some financial problems facing Scots due to the rising fuel prices – why not?
And now, yesterday, Darling responds to this nonsense.
“Holyrood and Westminster at war over oil and taxes”
Darling refocuses media attention on LIT, which, judging by the behaviour of the SNP, they would really rather not talk about. He tells us that, oddly, Swinney hasn’t approached the Treasury to discuss the Scottish Government’s hope that HMRC will conduct tax collection for LIT.
"To be blunt about it, the Nationalists are refusing to talk to us about it. If they thought this (policy] was a goer, you would have thought they would open up with us and say, 'Can we use the HMRC computer systems' but they have not done it."
Swinney seems to prefer asking Darling for oil revenues to be added to the Scottish Governments’ budget while insulting him in the same letter, to making progress on the economic policy that will make or break his name in politics. What’s going on?
Ultimately, the SNP are trying to prevent headlines emerging like this one on their proposed Scottish Futures Trust:
“Swinney admits SNP funding reform relies on PFI financing”
A few more headlines like this, but regarding LIT, will do much to encourage a public debate on its merits and shortcomings. To stop this happening, the SNP generate alternative economic talking points for the media, as shown above. If they have confidence in LIT themselves (or the Scottish Futures Trust for that matter), why do they feel the need to do this?
So first we have:
“Swinney calls for oil revenue talks” – May 19
Here, Swinney writes a letter to Alistair Darling with the boilerplate SNP demand that “Scotland’s” oil profits be given to Scotland. This misses the reality that as the oil sits in British waters, it belongs to Britain as a political entity. However, even while based upon this premise, the first parts of the letter seem reasonable enough:
“...it is vital Scotland has access to and benefits from our own resources. It cannot be right that we have fuel poverty and soaring road fuel prices amid this energy plenty.
That is why I have written seeking talks on greater financial independence for Scotland, including a transfer of oil and gas resources to the Scottish Parliament, so that we can invest in Scotland's long-term economic interests.”
But then he gives the game away. If he is serious about securing these talks, why conclude the letter with this snippy and frankly inappropriate comment?
“Such a change would mean that we could invest these revenues in the future success of Scotland after decades of unfortunate decisions by the UK Government that have seen oil revenues directed towards filling the black hole in Britain's finances rather than being invested in the sensible manner adopted elsewhere.”
Because he needs a headline to divert media attention from LIT, which he calculates the media will begin to scrutinise if he doesn’t supply them with simple fodder like this. It worked for that day in both the Herald and Scotsman.
Next, we have:
"Salmond accused of stoking fuel row"
Salmond elaborates on Swinney’s argument here, linking the growing cost of UK domestic fuel to the financial windfall that Scotland could have if it acquired sole access to British oil revenues. The status quo is a “massive national outrage”, with this escalation of rhetoric seemingly indicating the pressures entailed in identifying new economic problems in order to disguise the ones Swinney is creating.
No mention here of the possibility of LIT alleviating some financial problems facing Scots due to the rising fuel prices – why not?
And now, yesterday, Darling responds to this nonsense.
“Holyrood and Westminster at war over oil and taxes”
Darling refocuses media attention on LIT, which, judging by the behaviour of the SNP, they would really rather not talk about. He tells us that, oddly, Swinney hasn’t approached the Treasury to discuss the Scottish Government’s hope that HMRC will conduct tax collection for LIT.
"To be blunt about it, the Nationalists are refusing to talk to us about it. If they thought this (policy] was a goer, you would have thought they would open up with us and say, 'Can we use the HMRC computer systems' but they have not done it."
Swinney seems to prefer asking Darling for oil revenues to be added to the Scottish Governments’ budget while insulting him in the same letter, to making progress on the economic policy that will make or break his name in politics. What’s going on?
Ultimately, the SNP are trying to prevent headlines emerging like this one on their proposed Scottish Futures Trust:
“Swinney admits SNP funding reform relies on PFI financing”
A few more headlines like this, but regarding LIT, will do much to encourage a public debate on its merits and shortcomings. To stop this happening, the SNP generate alternative economic talking points for the media, as shown above. If they have confidence in LIT themselves (or the Scottish Futures Trust for that matter), why do they feel the need to do this?
Tuesday 13 May 2008
New Prisms
Some interesting readings I’ve come across in the last few days:
Obama’s foreign policy outlook, in which he explicitly identifies himself with the spirit of JFK (although how this translates into policy commitments is unclear)
The interest of the New York Times in Cameron’s ascendancy, and the lessons it could have for rethinking Republican ideology
OurKingdoms’s analysis of the intellectual construction and seemingly impending deconstruction of New Labour
Obama’s foreign policy outlook, in which he explicitly identifies himself with the spirit of JFK (although how this translates into policy commitments is unclear)
The interest of the New York Times in Cameron’s ascendancy, and the lessons it could have for rethinking Republican ideology
OurKingdoms’s analysis of the intellectual construction and seemingly impending deconstruction of New Labour
Hold out, Wendy
Maybe it was too good to be true. Seizing the initiative, capturing the headlines, putting the SNP on the defensive – Wendy gave us all this last week. The greatest shock of this proposal was the fact that it issued from a political party widely viewed in the media as exhausted and subservient to Brown’s half-interested wishes. The SNP didn’t know how to respond to it: they paradoxically refused Wendy’s olive branch of support for a referendum and instead noted the disparities between her position and that of Brown . This was going to be the start of the fightback. This was going to shoot the SNP fox. So what happened?
Not only has Brown publicly withheld his support for Labour participation in a referendum on Scottish independence before 2010, but there are now rumblings among Labour MSPs that the Scottish party should revert to a refusal of support for a referendum, and focus on the SNP’s failure to meet bread-and-butter manifesto proposals. But there’s no going back now, unless we want to guarantee ourselves no seats at all in the next elections for the Scottish and UK Parliaments.
Wendy intended to bring Labour support for a referendum, on the well-founded premise that the SNP would lose it. As Peter Preston argues, this was an excellent step forward, in offering to democratically demonstrate the strength of the Union, ridicule the SNP, and establish a new reputation for Wendy as a farsighted risk-taker. As Ideas of Civilisation points out, the fact that it was unlikely that a Labour referendum would proceed very far down the legislative process is beside the point. The key images to regain from the SNP were those of developing devolution and the democratic process; empowering citizens; and demonstrating assertive and innovative leadership.
Until we see some solid commitment of the MSPs and Brown (although this seems less likely in the case of the latter now), this unique moment and opportunity will be lost, and Wendy may have to resign. The Union is not threatened by this referendum, which the SNP will lose; it is threatened more by Labour continuing to be cast as the party that seeks to restrict debate on this increasingly salient issue, ceding to the SNP more opportunities to shape the Scottish political discourse.
Not only has Brown publicly withheld his support for Labour participation in a referendum on Scottish independence before 2010, but there are now rumblings among Labour MSPs that the Scottish party should revert to a refusal of support for a referendum, and focus on the SNP’s failure to meet bread-and-butter manifesto proposals. But there’s no going back now, unless we want to guarantee ourselves no seats at all in the next elections for the Scottish and UK Parliaments.
Wendy intended to bring Labour support for a referendum, on the well-founded premise that the SNP would lose it. As Peter Preston argues, this was an excellent step forward, in offering to democratically demonstrate the strength of the Union, ridicule the SNP, and establish a new reputation for Wendy as a farsighted risk-taker. As Ideas of Civilisation points out, the fact that it was unlikely that a Labour referendum would proceed very far down the legislative process is beside the point. The key images to regain from the SNP were those of developing devolution and the democratic process; empowering citizens; and demonstrating assertive and innovative leadership.
Until we see some solid commitment of the MSPs and Brown (although this seems less likely in the case of the latter now), this unique moment and opportunity will be lost, and Wendy may have to resign. The Union is not threatened by this referendum, which the SNP will lose; it is threatened more by Labour continuing to be cast as the party that seeks to restrict debate on this increasingly salient issue, ceding to the SNP more opportunities to shape the Scottish political discourse.
Wednesday 7 May 2008
Calculated Risk
The headlines today scream “betrayal” in the wake of Wendy Alexander’s decision yesterday to back a Scottish referendum on independence, apparently without consulting Downing St first. Scottish Labour, it seems, will not only support the SNP’s planned referendum bill but will pressure for it to be moved forward from its scheduled introduction in 2010. This marks a tectonic shift in UK politics since this time last year.
The mock outrage emanating from sources close to Downing St regarding Alexander’s new thinking seems rather artificial. This becomes more clear when viewed in the context of the Prime Minister’s initial response yesterday, which offered implicit backing to Alexander’s position. It has been no secret that support for a referendum has attracted widespread debate within Scottish Labour since May 2007. I first argued the case for Labour support for a referendum to Richard Simpson MSP seven months ago. Nevertheless, the combination of the search for a good story and buying the Downing St narrative has led to the media fundamentally misreading the situation. The Guardian’s headline is subtitled "support for Scottish independence", when what we are supporting is a referendum on Scottish independence on the premise that the SNP will lose.
Winning the referendum will attack the soul of the SNP, illustrate the gulf between party and Scottish support for independence, and answer the independence question for a generation. Salmond conceded to Andrew Marr that “about a quarter” of the Scottish population supported independence, and outlier polls range from 19% to 44% support. There is nothing to fear.
This shows Scottish Labour taking the initiative in Scottish politics, for the first time since last May. I’ve been astounded by the lack of initiative from the opposition. There is no reason why we can’t be legislating as much as the SNP, a point Alexander realised when she argued there was nothing stopping Scottish Labour bringing forward its own referendum bill.
Urging the SNP to hold the referendum sooner puts the Scottish Government in an awkward position – if Scottish independence is as important as the Government keeps telling us, why are we waiting until 2010?
How does this work with the Calman Commission? When the Commission reports back, the unionist parties can propose a referendum bill with the options that the Commission suggests including independence, at a time of their own choosing, which the SNP will be forced to support. Simple as that.
We need to see more of this from Scottish Labour, and also UK Labour – taking risks, and taking the initiative.
The mock outrage emanating from sources close to Downing St regarding Alexander’s new thinking seems rather artificial. This becomes more clear when viewed in the context of the Prime Minister’s initial response yesterday, which offered implicit backing to Alexander’s position. It has been no secret that support for a referendum has attracted widespread debate within Scottish Labour since May 2007. I first argued the case for Labour support for a referendum to Richard Simpson MSP seven months ago. Nevertheless, the combination of the search for a good story and buying the Downing St narrative has led to the media fundamentally misreading the situation. The Guardian’s headline is subtitled "support for Scottish independence", when what we are supporting is a referendum on Scottish independence on the premise that the SNP will lose.
Winning the referendum will attack the soul of the SNP, illustrate the gulf between party and Scottish support for independence, and answer the independence question for a generation. Salmond conceded to Andrew Marr that “about a quarter” of the Scottish population supported independence, and outlier polls range from 19% to 44% support. There is nothing to fear.
This shows Scottish Labour taking the initiative in Scottish politics, for the first time since last May. I’ve been astounded by the lack of initiative from the opposition. There is no reason why we can’t be legislating as much as the SNP, a point Alexander realised when she argued there was nothing stopping Scottish Labour bringing forward its own referendum bill.
Urging the SNP to hold the referendum sooner puts the Scottish Government in an awkward position – if Scottish independence is as important as the Government keeps telling us, why are we waiting until 2010?
How does this work with the Calman Commission? When the Commission reports back, the unionist parties can propose a referendum bill with the options that the Commission suggests including independence, at a time of their own choosing, which the SNP will be forced to support. Simple as that.
We need to see more of this from Scottish Labour, and also UK Labour – taking risks, and taking the initiative.
Thursday 13 March 2008
Taxing Questions/More Abstract Numbers
Swinney has failed to win public confidence for Local Income Tax, and generally seems ambivalent over whether he actually wants it to succeed or not. Perhaps he is waiting for the UK Government to confirm its pre-May refusal to extend Council Tax Benefit if Council Tax is abolished. The resultant funding gap (£381m) could be used as a figleaf for the SNP to scrap the plan, blaming Westminster for forcing the Scottish Government to retain Council Tax. Whatever excuse they use, it has been clear this plan has been unworkable from the start.
I’m all in favour of progressive taxation – however the cause of progressive taxation is better served by a well-thought out tax plan, which certainly isn’t what we have here.
AM2, writing on the Scotsman yesterday, offered an excellent breakdown of just how unworkable LIT is:
"1. Council tax raised £2.131bn in Scotland last year. The SNP’s 3% local income tax plan would only raise around £1.3bn.
2. Council tax benefit, paid by the Treasury as part of a reserved function, pays £381m of the total. If council tax was scrapped the related benefit would also stop. The SNP refuses to accept this.
3. The SNP admits the remaining £450m shortfall, but fails to properly explain how “efficiencies” can close the gap.
4. The total “black hole” is therefore £381m + £450m = £831m. That’s £320 for each of Scotland’s 2.6m taxpayers, effectively killing the idea that the plan could cut taxes.
5. The SNP reportedly claimed that the Institute of Fiscal Studies endorsed its plan. But the IFS report says that if council tax benefit ceased, the total gap “would be around £840 million”.
6. In announcing the plan, the SNP made no mention of water or sewerage charges. Many people assumed that the 3% would include those. In fact they’d need to be paid on top. The SNP website also fails to clarify this.
7. HM Revenue & Customs’ operations aren’t devolved. Holyrood can’t instruct HMRC to assess/collect a local income tax either by direct assessment or PAYE. Would such an expansion of HMRC’s function in Scotland be sanctioned?
8. Neither are there powers to force employers to collect local Scottish taxes through PAYE.
9. The SNP claims that the council tax collection cost is £65m. But that’s including the valuation boards, so water charges would have to be calculated some other way.
10. The SNP claims a £25m collection cost for local income tax. But that wouldn’t include water and sewerage charges or business rates for multiple property owners. Those would have to be collected separately though some alternative system.
11. The SNP claims that its plans have nothing to do with Holyrood's existing power to vary basic rate income tax by up to 3%. But there's no provision in the Scotland Act to alter the rates on other bands as well.
12. The Tories say “nobody believes that it would only be 3%”. The Burt Commission estimated 6.5% or 7.9%, depending on if only the basic rate band could be altered. Following the 2007 budget, the IFS said that a 5% local income tax would be needed to raise the same revenues as the current system.
13. The SNP says: “we will move towards allowing local authorities greater flexibility in setting the local income tax rate.” But are councils allowed to set rates for taxes to be deducted at source from salaries?
14. Iain McMillan, Director of CBI Scotland says: “it is patently obvious that the break-even point at which taxpayers start to pay more in local income tax than they currently pay in council tax is substantially lower than that claimed by the local income tax's proponents.”
I’m all in favour of progressive taxation – however the cause of progressive taxation is better served by a well-thought out tax plan, which certainly isn’t what we have here.
AM2, writing on the Scotsman yesterday, offered an excellent breakdown of just how unworkable LIT is:
"1. Council tax raised £2.131bn in Scotland last year. The SNP’s 3% local income tax plan would only raise around £1.3bn.
2. Council tax benefit, paid by the Treasury as part of a reserved function, pays £381m of the total. If council tax was scrapped the related benefit would also stop. The SNP refuses to accept this.
3. The SNP admits the remaining £450m shortfall, but fails to properly explain how “efficiencies” can close the gap.
4. The total “black hole” is therefore £381m + £450m = £831m. That’s £320 for each of Scotland’s 2.6m taxpayers, effectively killing the idea that the plan could cut taxes.
5. The SNP reportedly claimed that the Institute of Fiscal Studies endorsed its plan. But the IFS report says that if council tax benefit ceased, the total gap “would be around £840 million”.
6. In announcing the plan, the SNP made no mention of water or sewerage charges. Many people assumed that the 3% would include those. In fact they’d need to be paid on top. The SNP website also fails to clarify this.
7. HM Revenue & Customs’ operations aren’t devolved. Holyrood can’t instruct HMRC to assess/collect a local income tax either by direct assessment or PAYE. Would such an expansion of HMRC’s function in Scotland be sanctioned?
8. Neither are there powers to force employers to collect local Scottish taxes through PAYE.
9. The SNP claims that the council tax collection cost is £65m. But that’s including the valuation boards, so water charges would have to be calculated some other way.
10. The SNP claims a £25m collection cost for local income tax. But that wouldn’t include water and sewerage charges or business rates for multiple property owners. Those would have to be collected separately though some alternative system.
11. The SNP claims that its plans have nothing to do with Holyrood's existing power to vary basic rate income tax by up to 3%. But there's no provision in the Scotland Act to alter the rates on other bands as well.
12. The Tories say “nobody believes that it would only be 3%”. The Burt Commission estimated 6.5% or 7.9%, depending on if only the basic rate band could be altered. Following the 2007 budget, the IFS said that a 5% local income tax would be needed to raise the same revenues as the current system.
13. The SNP says: “we will move towards allowing local authorities greater flexibility in setting the local income tax rate.” But are councils allowed to set rates for taxes to be deducted at source from salaries?
14. Iain McMillan, Director of CBI Scotland says: “it is patently obvious that the break-even point at which taxpayers start to pay more in local income tax than they currently pay in council tax is substantially lower than that claimed by the local income tax's proponents.”
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