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Better Nation

A Scottish Corporation Tax

Dec 20

Posted by Jeff in Economy | 27 Comments

I am thoroughly enjoying the ongoing debate over what powers a devolved Scotland should and should not have, particularly the discussion surrounding Corporation Tax given how crucial and fragile the economy is at the moment, north and south of the border. Former BOS Chief Executive Sir Peter Burt is the latest to lend his opinion on the matter and it is pleasing to see that he is backing Scotland to set its own rates.

Opponents to the suggestion that Scotland should set its own corporation taxes tend to immediately point to Ireland and the supposed result of the low 12.5% that was, and still is, applied to companies over in the Republic. It is classic ‘post hoc ergo propter hoc’ philosophy to suggest that just because Ireland had a low Corporation Tax before it sunk into a deep recession, then that said tax was a significant driver for the current malaise. It was, of course, the banks’ misreading of risk and heavily-impaired real estate assets that were the main problems.

There is of course a risk that a race to the bottom takes place of Scotland is allowed to set lower rates. Ireland had a 12.5% tax rate to kick-start the Celtic Tiger, Scotland then brings in 12.5% to drive its economy ahead of the rest of the UK and then England, Wales and Northern Ireland feel they have to follow suit and suddenly it’s a Sterling vs Euro issue that tears the continent in two. A scorched earth tax policy with all players too cautious and too poor to move back to a correct level.

Nonetheless, I say Scotland’s needs and opportunities make it worth going for and the beautiful diversity of these shared isles can once again be harnessed to maximise the Laffer Curve for the UK’s benefit. If George Osborne’s preferred 24% is closer to the correct figure for tax rates then it will quickly become clear when Scotland has an anaemic 12.5% and few new jobs to show for it. We already have a drive towards nuclear power down South and a drive towards renewables up North, we have a drive towards high fees down South and a continued drive towards state-funded education up North so we can continue this devolution adventure and experimental settlement by maintaining tax rates as they stand in England and Wales but reduce rates in Scotland to ascertain what that flexibility will do for the UK and then, if necessary, act accordingly, either through rUK following suit or Scotland lifting rates higher again with the strategy deemed unsuccessful.

As things stand, why would a large company base itself in Scotland when it can be snugly located outside London with the vast travel options that Heathrow, Gatwick and Stansted provide? RBS has long been expected to pack up and head South, it is even sneered at in the City for having its base up in ‘Jockland’. Such attitudes don’t shift easily and will regrettably deter emerging entities from basing themselves in Scotland. Furthermore, the destinations that Glasgow and Edinburgh from its airports offer pale in comparison to the capital cities of small-medium sized capital cities across Europe. Scotland is uniquely disadvantaged by its position within Europe and its situation as a state within a country and some sort of flexible solution is required within the devolution settlement. The Scottish Government cannot be expected to grow the economy, and blamed for not doing so, when it doesn’t have the necessary tools and does not have oil revenues to use to its competitive advantage.

Of course, were the eminently sensible policy of fiscal autonomy to be granted through this coming Scotland Bill then devolving Corporation Taxes would come with it but it looks increasingly unlikely that the federal Liberal Democrats will leverage its position within the coalition. A solution to the current constitutional imbalance and problems with the Barnett Formula will continue it seems.

It is difficult to have a low tax nation with a large public sector and a relatively high minimum wage but that is a balancing act that Scotland can learn, and achieve, in time. There is more to gain from a distinctly Scottish business market setting distinctly Scottish rates of corporation tax than there is to lose.

Scotland can reap similar benefits as Ireland while being wise to any potential pitfalls. Lower taxes, higher growth, more jobs and a prising away of the Scottish nation from the distant cash cow of the City of London. Even former RBS chiefs agree it is a good idea. We just need a way to Make It Happen.

Prejudice and the Daily Mail

Dec 19

Posted by James in Media | 11 Comments

Dear reader, would you have guessed which UK paper included these lines in its editorial yesterday if it wasn’t for the title above?

We’re all in this together – or so the politicians never tire of telling us. If only it were true. In reality, the Britain now fighting to overcome the economic crisis is divided into two very different nations.

In one lives the great majority who bear the full crushing burden of the disaster that reckless bankers and a spendthrift Labour government brought upon us.

This is the Britain in which hard-working families are struggling to make ends meet, as taxes and prices rise and real incomes fall. It’s the nation in which tens of thousands of public employees face the misery of losing their jobs, like so many private sector workers during the recession.

But then there’s another Britain, populated by bankers who go on paying themselves ever more generous bonuses and an increasing number of companies that avoid paying UK taxes – taxes that should be helping to reduce this country’s terrifying debts.

Let’s examine the bankers – the men and women whose avarice and incompetence brought on the crisis in the first place.

The politicians should be under no misapprehension about how angry people are about these inequities. If bankers won’t behave decently of their own free will – curbing their bonuses, lending to small businesses and offering fair rates to savers – then the Coalition must force them to.

But the City is not alone in this other Britain that puts self-interest first and treats patriotic duty with contempt.

Increasingly British firms are using every legal trick in the book to avoid the UK taxes needed to pay off our debt.

Boots, Vodafone, Cadbury’s, WPP, Wolseley, Brit Insurance, Matalan, Shire pharmaceuticals, Experian, the British arm of Starbucks.. these and countless others are avoiding paying their taxes to the country where they have made their profits.

We’re all in this together? Let the bankers and tax-avoiders try explaining that to the millions of Britons who pay their taxes – and in return expect fairness to be applied to everyone.

The Daily Mail? Backing UKuncut? It’s got some residual unsatisfactory bits about accepting the Tories’ economic premise, but it’s otherwise basically there. The movement has noticed, and it’s not a one-off, either. On Friday they ran a piece called “The Great Tax Heist“, which included the following line:

“But there is a widespread feeling that while most hard-working taxpayers have a considerable portion of their income removed by PAYE, there is something immoral about businesses that can employ expensive accountants to find increasingly complicated ways of paying less tax.”

Today they followed up with pictures of Philip Green sunning himself in Barbados, and revealed that he’s staying at a recession-ignoring £16,000 a night hotel. Two weeks ago, they gave Kraft/Cadburys both barrels over their tax exile status.

I'm the one the Daily Mail warned you aboutThe left hates the Mail, in particular for its homophobic and racist pieces, for the association between benefits and cheating they thrive on, and for the bizarre obsession it has with the weight of women in the public eye (every last one is too thin or too fat).

The list goes on: health scares, drug paranoia, PC gawn mad, etc. Being criticised by them, for instance as the voice of the “irresponsible left-led anti-family anti-christian gay whales against the bomb coalition“, is rightly a badge of honour.

And so we loved Mark Thomas’s campaign to force them to print “The Paper That Supported Hitler” under the masthead. “Hurrah for the Blackshirts” is an editorial rightly hard to live down.

When I buy the paper for work I still find myself at the till explaining that I’m not a “Daily Mail reader”, while it’s hard not to be fond of Tom Royal‘s “Tea and Kittens” Firefox plugin that replaces the Mail site with two of my favourite things.

But that’s stopping us seeing the whole picture, literally in the last case. It’s not just UK Uncut. There are a series of campaign issues on which the Daily Mail is simply the best paper going, and my list has been growing over the last ten years.

I first noticed the Mail challenging my prejudices in 1998 over the GM crop campaign, the issue first got into direct action over. Most of the papers stuck entirely to the pro-GM line, simultaneously accusing us of relying on emotional arguments and then telling us that GM crops would feed starving African babies. Even the papers that took a more sceptical line glossed over the real reasons behind the campaign. The Mail, in contrast, ran a full-page piece which set out the scientific concerns about the technology, showing how retroviruses were used to insert DNA snippets into unpredictable parts of the chromosome, looking at the risks of genome instability, covering the way herbicide and insecticide tolerance would grow and spread, and they even looked at the economic issues around enhanced corporate control over the food chain.

Take another issue: civil liberties and the surveillance society. This 2007 piece on the spread of CCTV doesn’t even do the “on the one hand, on the other hand” we expect from journalism – it’s out-and-out critique.

Two other big campaigns for the Greens have been against the Trump eviction/gated community project in the North-east, and in favour of repairing the Forth Road Bridge rather than building a new one for £2.3bn. On both these issues they’ve been the closest paper to our position. I don’t have a scan of the best piece they did on Trump, but it was a double-page spread by Jonathan Brocklebank giving the families’ perspective in great detail, and giving the magnificently quotable Michael Forbes (“I wouldn’t negotiate with him even if he was dead, buried and teeing off in hell”) plenty of space.

And then last week, this excellent piece appeared on the additional Forth Bridge. Elsewhere in the media, the comfortable view appeared to be that if all the other parties were in favour of it, it must be right. No investigation of the alternatives, no critique. Even the Scotsman, where Bill Jamieson has sounded increasingly sceptical, got sucked into the SNP’s spin.

Even on gay rights, the coverage isn’t always what you’d expect. In October, for example, they reported polling we’d done on equal marriage. Sure, they quoted the Catholic Church, but they quoted Patrick Harvie first and at greater length. That’s not because I pitched the story to them, either (which would have been an odd decision). Even the headline isn’t even slightly provocative: those are just quotes, not scare quotes (if they’d just put the single word “wed” in quotes the tone would have been very different).

They really aren’t The Tablet writ large on other issues either. Yesterday’s Mail also jumped onto Cardinal Keith O’Brien for “suggesting that the economic misery being endured by thousands of families across the country could be a blessing in disguise” (Mail’s words), even pointing out he lives in the lap of luxury, a story which the Herald took in the totally opposite direction.

So, are the Mail more radical than we think? On many issues, they clearly are, and we need to work with them. The other way to look at this, though, is that we’re less radical than we think.

I want to live in a world where we aren’t monitored as a potential threat by dozens of cameras on a short walk to work, where little old ladies get to know their own homes are their castles even if grasping American billionaires want their land, where as many as possible have access to healthy food, where public money is used prudently instead of building monuments to politicians’ egos (the polling we did on the Bridge showed, incidentally, that Tory were even more in favour of repair than Green voters), and where the rich pay their fair share of taxation.

And these are some of the Daily Mail’s values too, it seems, in amongst the stuff I still abhor. Perhaps it’s time to stop hiding it inside Private Eye when I come out of the newsagent.

image from red molotov

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Is UK Transport Minister on a slippery slope?

Dec 19

Posted by Jeff in Transport | 40 Comments

I don’t have a car, I have a wardrobe full of wintry garb and I still hold onto a childlike wonder when the ground is suddenly covered in a white blanket. Consequently, it’s been a good weekend for me but it would of course be a different story if I was camping out in an airport without a pillow or a blanket (white or otherwise) to keep me comfortable throughout the night, as many have been doing overnight from Gatwick up to Aberdeen.

The lack of information coming from the airports is making the headlines but problems exist at a lower level up and down the country across buses, undergrounds, motorways and town streets. Could more have been done? Is there a Government strategy for this entirely foreseeable scenario or is ‘do nothing and bear it’ as good as it gets?

It is difficult to avoid drawing comparisons with the events that let up to the Scottish Government’s Transport Secretary having to resign last week – a short, sharp wintry burst and transport suddenly slipping into meltdown (if you can forgive the double pun). Now, there are potential differences between what is happening in the UK this week and what happened in Scotland last week, ignored reports and looked over weather forecasts for example. However, it is perfectly reasonable to point the finger at Stewart Stevenson’s equivalent in the coalition Government, Lib Dem Minister Norman Baker, and ask what it is that he is doing. A quick Google search has shown that his name isn’t in any of the main news articles on this snowy Sunday. Is Norman going for that ‘do nothing and bear it’ laissez-faire strategy that contributed to Stewart Stevenson’s undoing? Hopefully he is just too busy for his office to send out a press release.

Remarkably, the BBC are questioning Scottish correspondents on whether the new Transport Secretary is doing any better in Scotland without even mentioning what the UK Minister is doing for the rest of the UK. Media pressure is, of course, a significant contributing factor in any Ministerial resignation.

I personally believe that the coldest, the snowiest and the iciest December we have seen for many years will inevitably come with travel problems and it is for individuals, not Governments, to take decisions for themselves and then deal with the consequences that follow. There are many reasons to resign from a Government but a fallout from the fickle Mother Nature shouldn’t really be one of them.

That said, Norman Baker threatened to resign over tuition fees, he could have arguably resigned over implementing rail fare rises after campaigning on reducing them and now, if Scotland is anything to go by, he may have to show some true grit to plough his way through this current situation.

Anyway, wellies and mittens on for me and I’m off to build a snowman, or just steal one again…

Fees high? Ho hum. I smell the blood of an Englishman

Dec 16

Posted by Jeff in Holyrood | 28 Comments

I caught a snippet of a news article late last night, I think on the BBC, saying that English, Welsh and Northern Irish students would pay fees in Scotland but Scottish students would continue to not have to. I had believed this was already the case and that students from other member states of the EU don’t pay fees due to rules set down from Brussels. (Upon a second look, I note that the news item was that fees would go up from ~£1,900 to £6,000)

It does, on the face of it, appear a nakedly opportunistic way of doing business, smash and grab cash injections with more than a hint of independence-trailing to it from the SNP decision-makers. Of course, the plan may not even raise further revenue as if 67% of English students decide to stay away from Scotland then we won’t make any more money and, indeed, the Scottish students that take those freed up places will cost Scots more. Consequently, I hope a cut in the number of students attending higher education is also in the Green Paper and access becomes more competitive.

However, as opportunistic as this all seems, the Scottish Government has been backed into a corner as it believes in free education but has been handed a spending allocation that does not allow for it without deep cuts elsewhere. There is no reason why Scotland should accept the Browne Review if the proposals are so at odds with what the SNP, Greens and Holyrood Lib Dems (typically) argue for. This, of course, is the harsh reality of devolution, one must take the rough with the smooth, but, equally, those in the rest of the UK cannot complain if Scotland’s MSPs aggressively defend Scotland’s students and their future education.

The four nations of the UK jacking up fees for their three nearest neighbours seems counter-productive and mean-spirited but Osborne cutting so fast and so deep leaves little choice but for administrations light in power to plug the revenue gaps.

So much for we’re all in this together.

Anyway, today sees the Scottish Government announce its plans on how further education courses will be funded going forward. Politically, there is only one announcement that Mike Russell will realistically be able to make and that is to keep university free. A May election, student protests, the Lib Dem u-turn and pushing Labour onto the backfoot will mean that it will be business as usual for now. If you’re Scottish that is, of course.

Perhaps it’s time for an actual National Union of Those Studying

Dec 15

Posted by James in Education, Westminster | 10 Comments

Newsnight screen grabA motion of no confidence in Aaron Porter will be brought at NUS conference, and the frustration in the ranks is understandable. When the exceptionally well-attended main protests were being organised around the Westminster votes, NUS held separate events that few attended. He’s even had to admit he’s been “dithering“.

There have been exceptionally determined student occupations, showing a real commitment to challenging the Tory government, but as Paul Mason’s outstanding report on Newsnight last week showed, the leadership has in many cases come from the secondary school pupils “from the slums of London”. These are the kids who will pay the fees (or more likely be deterred by them), and these are the kids whose EMA is being taken away. No wonder they’re at the front of the marches.

Yet they’re not NUS members: the direct membership of NUS consists of students’ unions, not individual students, and this feels like a contributory reason for the avowed dithering. The leadership of NUS has always been too close to Labour, although this was even more obvious when Labour were introducing fees without their opposition.

It’s time for something new, a genuine national union for those in education, including at school. Perhaps NUS could become it, or perhaps it should be something entirely new. I’m pretty sure either way it would be a bit more radical.