Scotland the Brave No More on Taxation

Gerry Hassan

Sunday Mail, April 10th 2016

One theme has dominated this week in Scotland and the UK – taxation.

From April 6th 2016 the Scottish Parliament gained powers over a Scottish rate of income tax representing half of all income tax raised – and from next year it will have complete power over all this revenue.

The leak of the Panama Papers lifted a veil on the activities of the super-rich including 12 existing or former national leaders. David Cameron’s late father’s offshore tax arrangements became public, forcing Cameron’s office to make five statements on his tax affairs.

A new debate started among Scotland’s parties as they attempt to micro-differentiate; to show if they aren’t the Tories that they can mitigate ‘austerity’, and mark out alternative public spending choices.

Much of this is problematic. It is about relatively small amounts of money: Labour claiming to raise up to £110 million from a 50p tax rate on those over £150k; Lib Dems of £475 million with a 1p rise in the basic rate.

Sometimes parties want to emphasise certainty: Labour saying no one earning £20,000 or under will pay more tax; the Greens that everyone under £26,500 will pay less. Others want to stress uncertainty and volatility: the SNP saying that a higher tax rate of 50p could cost the country £30 million as people leave, and the Tories similarly evoking the prospect of thousands fleeing a tartan tax.

There is an absence of honesty about the scale of the coming public spending cuts. These have been estimated at £2billion per annum by 2020 – and directly questioned about this on a BBC ‘Scotland 2016’ special on tax – every one of the six parties avoided this.

Labour’s Iain Gray talked of ‘education and health being protected’; John Swinney of his stewardship of nine years. UKIP’s David Coburn mentioned the £15 billion ‘black hole’, but that’s only relevant if Scotland becomes independent. Talking of the Edinburgh’s trams, he mused, ‘We could have put a Scotsman on Mars for that money.’

The Green Maggie Chapman only had a public sector definition of jobs, saying that ‘if someone upped sticks the job would still exist’ and using the example of the Principal of Aberdeen University.

My Auntie Betty watching this from Dundee was not persuaded by any of them, reflecting ‘none of the six impressed me, but the Green woman was particularly vague and seemed to have few facts.’

There were, when explicitly invited, no details from any of them on the difficult choices we have to make. All the parties talked of maintaining and even expanding services, and putting right the shortcomings of others.

All of this illustrated the insubstantial nature of party policy-making – Labour’s 1p tax policy having come unstuck the previous week, and none of the parties offering anything of any great imagination. It also revealed the thin nature of what it means to be ‘progressive’ – seemingly about small amounts of tax increases and trying to pretend everything will be alright in the future.

Scotland’s wariness is also exemplified in the debate about wider public benefits, with the mantra of everyone, Tories exempted, that universal benefits go further. This was the explicit case made a while ago by SNP candidate Jeanne Freeman, but it is an assertion that isn’t based on any facts – selective universalism on a few high-profile benefits is a choice and form of selection, which excludes other choices.

The SNP, Labour, Lib Dems and Greens don’t want to address this basic truth. Instead, the mantra of free tuition fees, free care for the elderly, the council tax freeze and no prescription charges is presented as progressive and aiding social justice. It doesn’t and never has because social justice is about helping those in most need and redistributing from the wealthy to those who are more disadvantaged. All of the big-ticket items such as tuition fees and care for the elderly actually aid those with more money and take it away from the poorest and those on average incomes.

Scotland is going to eventually have a debate about tax and benefits. It is just that none of the parties want to have it in front of the voters. A land of pretending everything is going to be fine, and that we can protect core public services in a world of cuts and uncertainty, is one which will inevitably lead to anger and disillusion with politics.

We now have taxation powers, but we still have to learn that tax policy isn’t just about raising monies, but about encouraging and discouraging certain behaviours, and sending signals about the kind of society you aspire to be. Cameron and Osborne understand this in their political and personal actions on tax.

Scotland’s political classes are showing an absence of leadership and honesty, because they don’t think voters want to hear bad news. This is going to make it even more difficult when the coming storm of cuts descends. Wouldn’t it be better for one of Scotland’s parties to start levelling with us now and be honest about the decisions that someone soon is going to have to make? Who knows – voters might even like it and find it a refreshing change.