Let’s Talk about Tax if we don’t want to be Safety First Scotland
Sunday Mail, December 20th 2015
This was a significant week for the Scottish Government and Scottish politics.
John Swinney presented his first ever budget since Scotland had been given limited income tax powers which allowed variety up or down by up to 10p. That he choose not to do so is significant.
Swinney’s ninth budget came against the backdrop of a decade of real terms cuts by the Tories which we are only half way through. Against this backdrop and a Scottish election next year which the SNP look certain to win, Swinney didn’t want to do anything to frighten the Nationalists huge support.
There was as expected no change in the basic rate of income tax (now with the lovely anachronism SRIT), while there are small changes in second home taxes and business rates alongside commitments to childcare and educational attainment.
The council tax freeze, now in its eight year, was locked in, making local government a vague memory to most of us. Swinney didn’t do any major hits on the middle class, badly burned as he has been by the backlash from the stamp duty replacement, the Land and Buildings Transaction Tax.
The over-riding concern was reassurance and protection, or protection for the NHS and the police, while local government bears yet again a disproportionate share of the cuts.
The post-Budget debate was revealing, with Labour and the Tories only disagreeing with the SNP on small beer and mood music, neither wanting to put taxes up on anybody, or say anything distinctive.
This is a safety first social justice world – where all the main parties – SNP, Labour, Tories and Lib Dems – mouth compassion and solidarity, with even the Tories trying to distance themselves from their wicked cousins down south.
Sadly, no one wants to confront any of the big issues: such as laggard economic growth, structural divisions, and inter-generational and social mobility gridlock. These are just too difficult for anyone: with the SNP able to blame Westminster, and everyone else, Nationalist one party control.
This has become a bit of a pattern. This week the Commission on Local Tax Reform reported. After more than 40 detailed meetings and thousands of consultations, it avoided coming up with a single clear recommendation. Instead, it undertook in-depth research, offered a direction of travel, and weighed up options post-council tax.
There is a parallel with the UK Government and its dithering on Heathrow’s third runway: a debate running for the last twenty years. Heathrow is full and yet after the Howard Davies report published this summer, the Government has put off making the final decision until after next May’s London Mayoral elections. Business groups are going crazy with this procrastination; elected politicians are there to make such difficult decisions.
This bright, new hopeful Scotland is a land where successive administrations and parties have been unable to grapple with the basics of local government taxes. Scotland hasn’t had a property revaluation since 1991 – that’s two housing bubbles and one crash ago – because our politicians are scared. They are feart of making articulate middle class households losers. At the same time everybody talks of their concerns of ‘social justice’ and being ‘progressive’.
Scotland is in a strange place. The SNP have positioned themselves as the party of Scotland’s interests. Labour are lost, regrouping and confused. The Tories have a niche, but little more. The Lib Dems are headless and self-destructed years ago. The Greens are the only party challenging any of this, with a distinctive, coherent message, but firmly on the margins.
Despite the inflated rhetoric of much of Scotland, underneath it, taking independence out of the equation, all Scotland’s mainstream parties are fiscal conservatives and intellectual and political ones too.
They know voters like the idea of Scotland being distinctive. They know they like the warm words ‘social justice’, but won’t do anything to structurally aid it such as taking significant monies from wealthy and affluent voters. They are all in hock to middle class interests and professional groups, but with the exception of the Tories, pretend otherwise.
Funnily enough, this could be a description of the Labour Scotland of the 1980s, but it is the climate of today’s post-referendum SNP dominated politics. Life after ‘the Big Bang’ that was Scotland’s vibrant democratic explosion looks rather like it did before: business as usual, complacency and smugness, while people in SNP and Labour portray themselves as having long-term radical intentions.
For some this is enough and they are prepared to wait until after next year’s Scottish Parliament election and the hope of a referendum soonish, but in reality this is a phoney war.
Scotland has become a land of fiscal, intellectual and political conservatism, which begs the question: how deep is Nicola Sturgeon and indeed Kezia Dudgale’s social democratic commitment? We have until the next year’s manifestos and campaign to find out.