He's going to give a lecture today suggesting the yes/no indy question was bound to polarise support and that a federalised UK could form a useful middle ground. Hold on though, no bugger knows who Murdo Fraser is do they?
This is him:
Murdo Fraser is Conservative MSP for the mid-Scotland and Fife region since 2001. In his time he's been deputy leader of the Scottish Tories and currently holds the position of convener of the Economy, Energy, and Tourism Committee. He also contested the last leadership election and probably would have won had Ruth Davidson not been parachuted in by David Cameron. Davidson only entered Holyrood in 2011, Fraser on the other hand had been in harness for ten years but had been making noises about further devolution during his leadership campaign, some time later, Ruth made public her 'line in the sand' promise - make of that what you will.
Now though, its all change. Unionist parties are tripping over themselves to make noises about maybe offering more powers possibly at some point not specified in a future which may or may not transpire on this plane of existence.
And that is what Murdo will be talking about during his lecture at Glasgow University.
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| The relevance of this image will become clear soon enough, unfortunately. |
The SNP offered the opportunity for a third question but made it clear they'd be campaigning only for a yes. Unionist parties accused - I know, can you believe it? - Salmond of wanting a safety net for when is heinous plans for full autonomy went awry and said they would only campaign for a no vote and the status quo.
To clarify, nobody wanted to campaign for any sort of further devo option -so it didn't go on the ballot.
Now though, with the Yes campaign gaining ground and - please excuse this analogy - unionist sphincters twitching like rabbit's noses: devo-something is firmly back in the picture. We need to remember - if it had been on the ballot and we voted for it - Westminster would have been compelled to deliver it. Now though, all unionist parties need do is offer some ill-defined ill-thought out options then distract voters so they don't look too closely and realise its all unworkable flim flam.
I'm going to say something boring now, but its important. With that in mind, as a reward I'm placing a cute picture after two very short paragraphs.
Its about the Barnett Formula and further tax raising powers for Holyrood. Holyrood has had tax raising powers since its inception but never used them - why? Put simply, because the Barnett Formula - which is used to calculate the Scottish Parliament's block grant...
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| The block grant pays for all of the above. (This isn't the picture by the way.) |
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| Awww |
There now, that wasn't so bad was it? And, you'd have to agree - important too?
At first glance, you might think these devo-options aren't that bad - I mean - its more power isn't it? Well no, in terms of the income tax varying part for example - it means more responsibility & bureaucracy with no gain. In other areas, its not anything like enough. Its all just a sop to make you vote no.
These devo-options seem fine if you don't think too hard about it. But - a wee bit like having a new puppy in the house - its only when you start finding dog shit behind the settee you begin to equate the aspiration with the reality.
While you can train that out of a puppy, you can't train the mendacity out of a Scottish unionist politician with a strong vested interest in the status quo.
If you doubt that, you could do an internet search with the words 'Westminster gravy train' or 'Scottish Referendum 1979' or 'McCrone report' or 'Gordon Campbell Secretary of state for Scotland 1970 to 1974' or 'MOD job losses in Scotland under the union' or 'Shipbuilding job losses under the union' or 'Westminster expenses scan-
Well, the list goes on and will continue to grow until we vote yes.
Thoroughly enjo9yed and agreed with every word, pictures were good also. Federalism is off the books for the UK if you consider Mr Cameron's problems with a certain Mr Juncker, so of course they are going to entertain the idea of this here in Britain, as they say here AYE RIGHT.
ReplyDeleteHowever, if Scotland uses any of these tax varying responsibilities - in order for it to benefit - Barnett would have to be replaced because it only looks at spending in England - not tax receipts in Scotland.
ReplyDeleteNot quite true. The way Barnett will work if the Tory/Lib-Dem/Labour version of Devo-abitmorebutnotverymuch comes into being is this:
If Scotland keeps the same tax rates as England then Westminster will top up what Scotland collects in tax with a new block grant that brings the total available via tax and block grant to the Barnett Formula level as before.
If Scotland puts taxes down below English levels and therefore collects less in tax then the top up block grant doesn't change in amount so the overall total falls. In effect tax cuts are paid for out of public service cuts.
If Scotland puts taxes up above English levels then the top up block grant doesn't change in amount so the overall total increases. Scotland can keep the extra tax revenue.
In other words it's exactly the same system as the Scotland Act 1998. The amount of money that Scotland gets doesn't change at all. All that happens is that the current monolithic block grant is split into locally collected and Westminster delivered portions.
All that Devo-abitmorebutnotverymuch does is change the range and rates of taxes the Scottish Government gets to play with compared to the 1998 Act before it gets topped up to the Barnett formula level.
This is why I seldom write about Barnett, I think I understand it but actually don't.
ReplyDeleteSo what you're saying is: Scotland collects £40 (for example) in tax and Westminster 'tops it up' (our money folks, our money) by £60 to £100 (Barnett levels.)
If it lowers taxes and only collects £35 then WM adds its usual £60 on and we get £95?
Going the other way, we raise taxes and collect £50, WM 'tops up' its usual amount (£60) and we have £110?
And the penny drops on your second last paragraph (only took 20 minutes.) Important sentence there is:
"All that happens is that the current monolithic block grant is split into *locally collected* and Westminster delivered portions."
I think I'm correct in saying (and I'm grasping at straws here) I remember reading about Westminster/HMRC never putting in place the ability to work out tax income if the SP varied the rate of tax, did they not try to charge the Scottish Parliament £6m for making the change to their - sorry - our IT systems?
I'm still sort of right...
Maybe... ;-)
The main point, as Helena said above (Hi Helena) is that federalism is off the books - it'll never happen. This is just another vegetable being thrown into a very bland & murky devo stew.
Doug
ReplyDeleteI think you might find that if Scotland puts up taxes Barnett actually comes down so that Scotland remains the same, that was the point with nursery places. If Scotland generates additional revenue through taxation the additional revenue basically goes to the treasury via a cut to the block grant so effectively Scotland always stays the same but the treasury gets richer. I think Lamont explained that in her North of England sppech when she noted that under no circumstances can Scotland have more money within the additional powers. We will however lose hundreds of thousands on additional admin costs so we lose again with no actual additional powers.
Pa
Federalism is something that I think a lot of people would accept inscotland being a non member of a party Liberal I would probably accept that, we would only have common ground on foriegn affairs and policy.
However, like additonal meaningful devolution it will not happen and not one MSP or non government MP can make it happen. Any future devolution will purely lie at the feet of english MPs, as always England will decide for us and there lies the problem and why it has to be a YES. There is no desire to see Scotland achieve greater autonomy , esp within Westminster, it does not serve their purpose or that of the Liebour Party. You could probably get the Liberals around the table to discuss devo max or federalism but not the rest so not an option and Murdo is talking crap, again.
Bruce
Bruce:
ReplyDelete"I think you might find that if Scotland puts up taxes Barnett actually comes down..."
No,you're wrong there Bruce. I've read every Devo proposal produced very closely and they are all essentially the same. If that was the case then there would be no point to any tax powers for Holyrood.
The additional economic activity from mothers released to work by the provision of childcare would benefit the economy but the increased tax take from say income tax and VAT would go straight to the Treasury bypassing the Scottish Government so it would see no economic balancing from its outlay on childcare.
That is not connected to the taxes which have been assigned or devolved to Holyrood.
pa_broon74:
ReplyDeleteYou've got it right. The easiest way to think about it is an an ice-cream floater.
With lemonade (tax) and ice-cream (the top up block grant) it comes to the top of the glass. (Barnett)
If you reduce the amount of lemonade the ice-cream floats down. (Reduced tax rates and less tax take)
If you increase the amount of lemonade the ice-cream sticks over the glass. (Increased tax rates and increased tax takes)
The top up block grant they use is always calculated assuming taxes are the same in Scotland and England.
How Scotland raises or lowers its permitted tax rates (lemonade) after that is of no concern to Westminster because Scotland is not getting anymore (or any less) public money as any funding increases are coming directly out of Scottish taxpayers pockets.
Doug
DeleteThanks for the info.
Bruce
Hi Bruce.
ReplyDeleteYou're quite right, as you say, the only way is a yes, it goes back to the basic problem - democratic representation or lack there-of.
The very thing we seek to change is the very thing that stops change form happening.
So it has to be a yes.
Doug.
I get it now with these devo proposals, I'm leaving the blog as is, folk can get the correction in your comments.
I think we can agree though, its a needlessly complicated mess that still enriches Westminster and makes the people of Scotland poor.
Thanks all for commenting.
PS: The Rabbit's nose is also still very much germane. ;-)
pa_broon74:
ReplyDeleteThe one thing to remember with all the devolution smoke and mirrors is that in the face of an independence referendum all that the Westminster parties can come up with is extending the current 3p in the pound in the original Scotland Act 1998 to something mad like 10p and extending the range of taxes beyond income tax to other minor taxes such as landfill tax.
We're already at Devo-Max because they simply cannot go beyond the concept of a block grant and minor tax varying powers. Revenue raising powers which would give Scotland an advantage over other regions of the UK would not be permitted by non-Scottish based MP's.
Federalism would require a written constitution to be created and implemented in Westminster which would be no small amount of work but there is one other thing about any federalism proposal.
Federalism in itself promises nothing. All it does is to protect a regional parliament in a country's constitution.
If the Welsh Assembly was constitutionally protected it would be a federal parliament but it would still have a lot less power than the current devolved Scottish parliament.
Just as with devolution, without spelling out what powers a federal Scottish parliament would have it's just a meaningless buzz-word.
Devolution smoke & mirrors and meaningless buzz words?
ReplyDeleteFrom the Tories?
I refuse to believe it.
Ahem...
"if it had been on the ballot and we voted for it - Westminster would have been compelled to deliver it"
ReplyDeleteNot quite. Westminster would have been pressured into going through the motions of delivering it, but it would have been still-born. Legislation would have had to pass in the Commons and the Lords, and the necessary constitutional changes would almost certainly have had to be submitted to a a referendum in England or the whole of the UK. The probability of Devo-max, federalism, or whatever one might call it, surviving all of this would be virtually zero. The Westminster government would not lean on their own back-benchers to try to force it through, but would be happy to say "We tried, but we can't do it", much as they did with reform of the Lords.
As for the Barnett formula, I suspect that DougtheDug is right in theory, in saying that the block grant should be unaffected by variations in the Scottish income tax rate, but that in practice an increase in the rate would be used as an excuse to cut the block grant. In theory, all government expenditure on projects in England should trigger Barnett consequentials for Scotland; in practice, projects such as upgrading London sewers and building a railway line which will not come within a hundred miles of Scotland are simply designated as being for the benefit of the UK as a whole. The Barnett formula is a convention, not a law, and so Westminster can, and does, take liberties with it without any risk of a legal challenge.
Hi Les.
ReplyDeleteAgreed. The difference between being compelled to do something and actually doing it is vast when it comes to Westminster.
Equally, London does take liberties with Barnett - we know it does. In not passing them on or in designating projects in England as of UK wide benefit forcing Scottish tax payers to subsidise infrastructure we'll seldom, if ever use.
Its a stacked deck and we need to get out of the game.
Thanks all for reading (errors and all.)
Les:
ReplyDeleteThe Barnett formula is as it says on the tin, just a formula.
If English spending falls then the amount calculated by the Barnett formula for Scotland also falls and as you point out it is only spending which falls within the definition of the Barnett formula that gets used to calculate Scotland's share.
They won't need tax increases in Scotland as an excuse to reduce the Barnett Formula because the austerity cuts are going to do that anyway.
There has also been quite a lot of interest in changing the Barnett Formula entirely to some other method of calculating Scotland's share of UK spending especially from the Welsh who think they have been given a raw deal under Barnett. This new method would reduce Scotland's share compared to the current Barnett Formula.
In terms of the three GB party devo plans the continuation of Barnett can be summarised as follows. (This is taken from each party's devo offering.)
Labour: We'll keep Barnett.
Lib-Dem: We'll keep it but we want to change it.
Tory: Don't mention Barnett.
The chances of Barnett continuing to be the method of calculating Scotland's public finances in the case of a second Lib-Dem/Tory coalition are about nil. I wouldn't bet the farm on Labour keeping it either once the threat of independence has gone.
Its been said often often but a no vote is not a vote for no change, and anyone complaining about a lack of 'certainty' in the Yes campaign's argument is talking out of their rabbit's nose - there is little to no certainty coming from the No campaign either.
ReplyDeleteInteresting discussion; I learned a lot from it.
ReplyDeleteI still think that unless you can balance putting up income tax by reducing VAT, or some other massive earned (ie NOT land infill tax) then there is no point. You can't use really use them in a united kingdom without causing huge imbalance. At very least it's a crude tool.
No government wants to put up income tax. For some reason it's a no no. (Yet they put up NI, which is the same thing and they put up VAT which is much less progressive).
Labour and the Liberals never used the power; the SNP never used the power. Would the Tories? OK; hypothetical question.
It sounds good but it's as much use as offering your average Dundonian tokens for a free lunch for two in (value £15) in Mcdonalds in Montevideo.
Tris:
ReplyDeleteBecause the income tax part of the devolved taxes in a future devolved Scotland are such a large proportion of the take only by raising income tax can any future Scottish Government significantly increase revenue.
It's actually a trap.
As the austerity cuts and/or change to the Barnett formula occur the only way to preserve public services in Scotland will be to raise income tax. No other country will have such a direct linkage between personal income tax and public services.
So any future devolved Scottish government will be between a rock and a hard place.
They either appear as an agent of the Westminster government by cutting public services and not raising taxes or are accused of hurting taxpayers by increasing taxation just to maintain the current level of public services.
If it's a no vote then Labour will breathe a sigh of relief if they don't regain Holyrood because the SNP will then be the fall guys for the Tory cuts coming down the line.
Yes, I can see that Doug.
ReplyDeleteThere is absolutely no alternative to independence.