It’s hard to believe that this issue is being seriously discussed outwith political circles. The fact that the power to vary the income tax rate has never been used is a major reason for this. Indeed given that it’s often wrongly described as solely a tax-raising power, the public may be glad to be rid of it.
That being said, the lack of public discussion of this issue does not mean that it is unimportant. In a strange (and still relatively minor way) it’s one of the most significant events since devolution.
The establishment of the Scottish Parliament was obviously a monumental event in Scotland’s history. It was seen as vital that any such decision had to be made by public consent, meaning the use of a referendum.
This was accepted without much challenge. However the (soon to be) Labour government’s decision to have a second referendum question on tax-varying powers caused fury, even leading to frontbench resignations.
So this is the background to tax-varying powers being included in the Scotland Act; it was a specific decision of people in Scotland to have them as part of devolution, presumably to enhance the parliament’s accountability.
For those who believe this current situation is nothing more than a political storm in a teacup, it’s worth imagining the following scenario:
It’s the middle of the 2007 Scottish election campaign. First Minister Jack McConnell is on the ropes after it emerged his government had secretly abandoned the parliament’s power to vary taxes. SNP leader Alex Salmond has pulverised his opponent over this decision and called on him to consider not even standing again for election.This is surely what would have occurred had the decision been taken by the previous Labour-Liberal Executive. And it would have been hard to defend them against such a move.
What’s most difficult to understand is that surely there was in fact the opportunity for the SNP to turn this to their advantage. Had John Swinney went to the Scottish Parliament and said the UK government was attempting to remove the tax-varying power, it would surely have been a big win for them.
This is where the whole affair becomes truly bizarre. Given the tax-varying power’s central place in the referendum that sets up the parliament it is not clear how the Scottish Government thought they could simply not tell anyone they didn’t have it any longer.
It does also through a huge spanner into the SNP’s election campaign. Given that the thrust of this will be that Scotland should be independent but at least it should have more financial powers, the decision to get rid of those they already have somewhat undermines this.
The one thing that is clear is that whatever happens the tax-varying power has now gone until 2013. What's less certain is what, if anything, happens next or if John Swinney’s statement and apology yesterday and Alex Salmond's contrition today will draw the events to a close.
Whilst Swinney’s resignation was mooted by some opponents yesterday the muted nature of these calls suggests there was little genuine feeling or expectation behind them.
John Swinney – in spite of the current furore over budgets and cuts – is generally believed to have done well in the finance post. Any attempt to remove him so close to an election would surely be rebuffed, and have little traction amongst the media.
Giving two apologies surely quells this issue and will see it disappear soon enough. The opposition parties can be satisfied with the hit they’ve certainly scored on the government but have to be careful not to seem like they actually want to use this power to raise taxes.
The SNP will be a little tamed too, and it will surely mean they will talk a bit less about fiscal autonomy or powers during the election campaign. After all you can see their opponents’ immediate comeback any time this is raised during a debate.
The public will just keep on going. Not really sure why it makes that much of a difference. Certainly bemused at how politicians can get into such a state over matters they don’t care about.
And, of course, glad that they’re sheltered from a tax rise for at least the next few years.
8 comments:
Good piece, but I wonder whether those who're pleased not to be paying a little more tax will be outweighed and outvoted by those either having their pay squeezed or services they rely on slashed, or even their jobs cut.
James,
There's a peculiar thing about tax rises; everyone thinks that someone else should pay them!
It seems hard to believe that any major party would have proposed using this power next year, meaning it is something of a symbolic power more than anything else.
There will be those that would have proposed using it - and more still that would like to stop the cuts - but how many of them would be happy to vote for a flat rate increase that would likely affect them as anyone else?
IoC
I think you'll find, once all the paperwork is public, that the last labour/libdem government allowed these powers to go dormant. When the SNP took over John Swinney noticed this and tried to remedy it only to find the exorbitant cost to the public purse.
Yes he made an error not capitalising on this at the time but that's not the man's style.
The reason the rumblings and mumblings for his resignation are all too obvious. The last government started the ball rolling and they know they've been found out publicly.
It'll all come out in the wash but there will be a few more red faces than just the SNP.
"It’s the middle of the 2007 Scottish election campaign. First Minister Jack McConnell is on the ropes after it emerged his government had secretly abandoned the parliament’s power to vary taxes. SNP leader Alex Salmond has pulverised his opponent over this decision and called on him to consider not even standing again for election.This is surely what would have occurred had the decision been taken by the previous Labour-Liberal Executive."
Nope. 1 The power was not abandoned 2. The SNP had already committed itself to not raising income tax. They would not have been so daft as to rant and rave about how dreadful it was that the Scottish Executive had not paid over millions and millions of pounds for the privilege of being able to raise income tax because the voters would quite logically conclude that this was an indication that they wanted to raise income tax.
"Had John Swinney went to the Scottish Parliament and said the UK government was attempting to remove the tax-varying power, it would surely have been a big win for them."
It would also have been a lie, which is why he didn't do it.
"Given the tax-varying power’s central place in the referendum that sets up the parliament it is not clear how the Scottish Government thought they could simply not tell anyone they didn’t have it any longer."
Because that too would be a lie. Neither John Swinney nor Alex Salmond has the power to unilaterally change the terms of the Scotland Act. The Scottish Parliament still has the power to vary tax.
"The SNP will be a little tamed too, and it will surely mean they will talk a bit less about fiscal autonomy or powers during the election campaign."
I think you will find the opposite is true. The tax varying power which the opposition parties appear so attached to - let's call it Labour's Tartan Tax for the sake of argument - only applies to basic rate taxpayers. That means that any increase will have a disproportionate effect on low and middle earners. Does that sound like a fair or popular measure to you - does making the poor pay more than the rich sound like a vote-winner?
I don't think so, which is why none of the major parties have said they would use it. But by their faux fury with the SNP the opposition parties may have made a rod for their own backs because, as I said earlier, screaming and shouting about how dreadful it is that the Scottish Government has not paid over millions and millions of pounds for the privilege of being able to raise income tax may lead voters to conclude that the reason for all this sound and fury is because said parties want to raise income tax.
Why else would they be so exercised about the subject?
I'll vote to pay more tax not because I like paying tax, but because I understand the price we pay for low taxes, especially given the economic circumstances.
I know not all the 55% who said they would do so in that poll really would do it, but might half of them? A fifth of them?
Also, Indy, you know that "major party" shtick is as annoying and as dishonest as the old two- and then three-party consensus line? Do give it a break.
Indy,
I think that's this blog's first 'fisking'!
Some of the general points you make are fair enough but the point of the article weas to examine the general perceptions involved in this.
There is no question that if Labour had been in power and this had happened the scenario I describe would also have. This simply means that all political parties use whatever tools they can to attack their opponents.
It's surely not the case that the Opposition want to raise taxes next year, merely that this was a mistake they can easily beat the government with.
For proof of this you only have to look at the fact that both Swinney and Salmond quickly apologised, knowing that doing so shuts down a certain mistake fairly quickly.
Ultimately this remains an arcane subject which the public will be largely in the dark about. The downside the SNP is that it just looks like they've done something wrong; the upside is that no-one will much care about it, hence why the wanted to shut the story down so speedily.
James,
It's a fair point about some people being willing to pay more tax. From my own perspective I would likely be prepared to if I knew exactly what it was for.
That being said (as I've written before) the one thing these cuts should be an opportunity to do is for the government, councils and other groups to really examine every penny they spend and ask how crucial it is.
If they can hand on heart say there's not a single thing they can cut then there is a case for tax increases. If not then making these changes first should be the priority.
As much as anything else even if we still had tax rises after the process described above I'd want to be sure that extra money wasn't being wasted again.
But you are not voting just for you to pay more taxJames.
You are voting for every person on a living wage to pay more tax. Give with one hand, take away with the other, eh? You are voting for every retired couple on a modest occupational pension to pay more tax. You are voting for every family struggling to get by when their pay has been frozen or cut but their bills keep getting bigger to pay more tax.
If the Greens really were a major party and did regular doorstepping and telephone canvassing, as the SNP and Labour do, you would know how little appetite there is among ordinary people to pay more tax - indeed, you would know how deeply amgry ordinary people are at the idea that they should be made to pay the price for the incompetence and arrogance of bankers and out-of-touch politicians.
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