Posts Tagged tax

A Nationalist Government?

I understand the SNP’s decision not to look at revenue options and simply to hand on Westminster’s cuts, though I disagree with it. But today UK Ministers have told us that someone in the Scottish Government let the powers lapse in 2007 when the SNP took office. Even the Labour/Lib Dem 1999-2007 coalition had the good sense to retain the power itself, though they didn’t use it (and during those budgetary boom years I think that was the right decision).

Michael Moore’s letter says it will now take two years to get the relevant HMRC systems up and running again, and then another ten months to bring any change in. It’s extraordinary. If some ultra-Unionist party had handed back a Scottish tax power the Scottish people explicitly and overwhelmingly endorsed in 1997, the SNP would be calling for Ministerial heads to roll. You simply cannot bang on about hypothetical future powers as an excuse for not using the existing ones, let alone when you’re returning them to Westminster.

Through SNP incompetence or deliberate intention, the voters now have their choice limited, and it will be much harder to find ways to raise revenue and step away from these Tory cuts. Someone should consider their position.

Does it remind anyone else of this epic speech? A nationalist Government, a nationalist Government, scurrying about in limos handing powers back to London.

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Just choose your cuts?

Caroline Lucas and Patrick Harvie at Conference 2010 Less than a month ago, Jeff wondered whether any of the parties would be brave enough to consider using the tax-varying powers of the Scottish Parliament. I held off commenting because I hoped the Scottish Greens would vote at Conference to back revenue-raising to block the worst of the cuts, and indeed we did this weekend, overwhelmingly so.

The UK Government, has, we believe, made the wrong decisions with their deficit plans and spending cuts. They are enthusiastically regressive in the detail – a return to the work-house? – and economically illiterate in their overall effect.

Greens don’t want to see massive deficits pile up and have taxpayers’ money wasted on interest payments, but neither do we believe the payback should be made by the poor.

A massive clampdown on tax avoidance, a Robin Hood tax, a one-off wealth tax on the richest, these are the ways in which a progressive UK Government would act. But we do not have such a thing, any more than we had one prior to May.

UK Ministers have three dimensions to consider. Revenue, expenditure and borrowing. Scottish Ministers have only the first two (which is probably a good thing given the perverse desire of the other four parties here to blow billions on the Alex Salmond Additional Forth Bridge).

Without significant borrowing powers for the Scottish Government, John Swinney can only look at revenue and expenditure. Yet the SNP have themselves ruled out revenue changes. The tax varying power is “impractical”, despite having campaigned for it to be used not so long ago as the old Penny For Scotland. Council Tax will be frozen too, despite the regressive nature of the freeze as well as the tax itself.

The Labour leader has done the same, telling the Today Programme two weeks ago that:

“the debate in Scotland is about managing the reduction in the finances that we’ll have available”.

Both the SNP and Labour are terrified of frightening the rightwing press who have cheered on the coalition, and neither party feels they can afford the other slamming them for some “tax bombshell” or similar. In Jeff’s post he said he thought the Nats would be the most likely to be brave, but I never believed that. Their political proximity to the Tories has been striking, as has their growing terror at being evicted from office having achieved not much.

Neither the Conservatives nor the Lib Dems could credibly take a position which criticised their London colleagues’ cuts, either. Again, Jeff had the Libs down as second most likely to take a progressive position: that struck me as impossible too.

Contrary to the Scotsman headline, Scottish Green Party conference didn’t pass a call for a 3p increase in income tax. We voted for a manifesto which would find progressive ways to raise revenue, within the limits on Holyrood to do so, including Land Value Tax and the Scottish Variable Rate. The detailed proposals will go through the party’s Council, but I’ll eat my hat if they recommend the full 3p.

Every other party in Holyrood is now apparently committed to passing on the Westminster cuts in their entirety. The only debates for them are about where they fall. Should they hit health or housing harder? Should capital budgets be cut for roads or schools? (not a hard one, that)

So here’s the dividing line. The election will be about the cuts above all, and the Scottish Greens will be the only party in the next election offering an alternative to them.

Here’s how Patrick had it yesterday.

“Labour and the SNP are just bickering about how to implement the Coalition’s cuts. This vote today means the Scottish Greens will provide the people of Scotland with a pragmatic alternative, the only alternative to those cuts. When the Scottish public voted in 1999, they voted not just for a Parliament but also for that Parliament to have tax-varying powers. The options are limited, but they are there. If they remain unused during the gravest threat to public services in the post-war era, when will they be used?

“In May, the public will have a choice. They can vote for one of the four parties who either relish the cuts or are too afraid to challenge them. But they will also have an alternative – to vote Green, to boost the green economy, and to protect the public services we all rely upon.”

I’m proud of our position, and I’m looking forward to fighting an election on this basis – who’s with me?

Incidentally, the March 2010 UK Budget said what the powers would bring in: around £400m a year in 2011-12 (pdf, see A9) for a 1p increase.

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