THEY’RE AT IT AGAIN. As if they hadn’t done enough damage to Scotland, the Labour Party has commissioned a report from a group led by Gordon Brown that will recommend significant constitutional change. This will, apparently, include the further devolution of tax powers.
Why? In the light of the mess the SNP has made of the tax system, can someone please tell me why this would be a good idea? Perhaps Ian Murray MP, for whom I normally have great respect, can tell us why he supports the devolution of more economic powers, after the series of disasters already perpetrated by the SNP regime? When we look at what the SNP has done to Scotland, with its incompetence, false promises and poor choices, why would we want its leaders to have even more powers to create even more damage?
This has led me to ask: is this devolved Scotland really what we wanted or thought we would have when the vote took place in 1997?
We have always been told that devolution was a matter of democratic choice: Scots were clamoring for it, apparently, and so Scots must have it. Certainly, 74 per cent of those who did vote in 1997 voted for devolution, including my very reluctant self, but not my more sensible husband. That seems like massive endorsement. Yet the turnout in the referendum vote was 60 per cent. Two in five eligible Scots could not be bothered to vote in this allegedly vital and popular referendum. That means that a minority of those eligible to vote supported devolution, 44.7 per cent – a figure that bears a strange resonance. It is exactly the same as the number (on a very much higher turnout of 85 per cent) that voted to leave the UK in 2014.
The devolution settlement included giving Holyrood the power to vary the tax regime by plus or minus 3 per cent. A majority (not including me) of those who did vote voted for tax varying powers, although, taking the turnout into account, the percentage of those eligible to vote who supported this was 38.1 per cent. The issue of having a variable tax regime was one of the few details we were given when we voted for or against devolution in 1997.
Those supporting devolution in 1997 had no idea of what it would entail, any more than did those who didn’t support it. I doubt anyone imagined we would end up paying £414.4 million for the Holyrood building, when we had been led to expect the old Royal High School to be the Scottish assembly’s headquarters; in addition to that, there is £100 million a year for maintenance of the building; and also by now there is a bloated ministerial troop on fat salaries and pensions.
I imagine someone spent (highly paid) time and effort on devising a parliamentary system for Holyrood. Such a shame they ended up with an assembly no more fit for purpose than the SNP’s catastrophic attempt at holding a census this year. As Gillian Bowditch says (Sunday Times, 30 October 2022), Holyrood has “no revising chamber…, no obvious policymakers outside the very tight cabal of the first minister’s closest team, and a unicameral parliament whose rules prevent proper debate”.
Anyone who has watched proceedings at Holyrood can confirm that. Power at Holyrood is concentrated in the hands of an executive to which there is no effective challenge. To that we can add the deep secrecy that surrounds government activities. The Auditor-General, Stephen Boyle, has spoken of a lack of transparency and public scrutiny over the spending of Covid support monies, among other things.
Boyle has also been excoriating about the office of the Commissioner for Ethical Standards in Scotland which “has not been doing its job as it should…. It is neither open nor transparent, and it lacks scrutiny and challenge…. It is worrying to see so many failings in a single public body”. This judgment could stand for the entire apparatus of SNP governance.
Missing from Holyrood is a robust committee system, like the inquisitorial select committees system at Westminster. Who can forget Dame Margaret Hodge’s interrogations of ministers and others when she – as an opposition MP – was Chair of the Public Accounts Committee, 2010-15? It was pretty evident that, at her committee’s sessions, some of them endured what Sir Alex Ferguson called ‘squeaky bum time’. Ruling politicians, and civil servants, are not put under anything like the same pressure (if any) at Holyrood, as the farce of the Salmond Inquiry painfully demonstrated.
In 1997, the expectation appeared simply to be that a devolved regime would be ‘better’. Scots who prided themselves on being more ‘social democratic’ than others in the UK imagined some kind of egalitarian nirvana. Did anyone expect that, twenty years later, Scotland would be the drugs death capital of Europe, by a mile? That life expectancy in Scotland would actually decline? Or that a horribly impoverished district like Govanhill, in Ms Sturgeon’s own Glasgow constituency, would remain horribly impoverished? Or that the attainment gap in education would, in the 2020s, remain a stain on Scotland and a barrier to equality of opportunity for those from poor homes?
Did we expect A&E waiting times to be out of control, a two-year wait (at best) for knee and hip surgery, a shortage of doctors and nurses? Did we expect education standards to decline, as they have steadily done? Did we expect a census to be botched? Now, insofar as the attainment gap has narrowed, it has been because pupils from better off homes are achieving less, not because those from poorer homes are achieving more.
Did we expect to have a crisis in the ferry service that is a lifeline for those in the western isles of Scotland? Now, it seems the long delayed new ferries – including the Glen Sannox, which was actually ‘launched’ by Nicola Sturgeon in 2017 but is not yet in service – will not be able to use the harbours of some of the islands, while it has just been admitted the new ferries will not be ‘green’ in terms of the fuel they use, as was promised. They will at least at first – when they actually come into service, at some unknown point – be using diesel. What a come down – especially with Ms Sturgeon rushing off to bask in glory of being at Cop27 in Cairo.
The tax issue is, however, a major thorn in the side of devolved Scotland. For many years, no Scottish government attempted to diverge from the UK’s personal tax regime. But, in the wake of the 2014 referendum, the winning side incomprehensibly felt the need to make concessions to the losers, with the 2016 Scotland Act giving Holyrood the power to vary income tax rates and bands on earned income. The SNP administration introduced a complicated system of new rates and bands and froze the threshold for the upper rate of tax. This meant those on the very lowest incomes who were liable to pay income tax saved a few pounds a year while in 2020-21 anyone on £27,243 or more paid more income tax than their counterparts elsewhere in the UK.
Recently, Professor John McLaren has demonstrated (Scotsman, 22 September 2022) what a disaster it has been for Scotland to have a different tax regime from that in the rest of the UK. As McLaren says, in future, “taxes – mainly on households – will be much higher than elsewhere in the UK, but with next to nothing to show for it”. This means that by 2026, Scotland’s revenues will be £1.5 billion lower than if the Scottish administration had retained the same levels of taxation as had originally applied before 2016.
How can it be that raising taxes brings in less money? One answer, according to McLaren, is Scotland’s sluggish economic growth, worse than the UK’s as a whole. In addition, revenues from higher band taxpayers have not met expectations. Further, Scotland’s ageing population has meant the size of the workforce has declined. We now already know that the devolution of some tax powers from 2017-18 has worked out to Scotland’s disadvantage, bringing in less tax revenue than expected. If the SNP administration intends to spend at its current rate, it will have to raise taxes even further, which will probably mean an even worse return. There is nowhere else for the money to come from.
I hope that Gordon Brown and his merry men who want to devolve more financial and economic powers to Scotland are aware of this and learn from it that it would be foolish to devolve more financial powers to Holyrood. But I am not optimistic.
Already, Scotland receives from HM Treasury every year an extra £12-15 billion over and above what Scots themselves raise. In the two Covid years, the amount was in the region of £30 billion, to account for furloughing and other support measures. That £12-15 billion would, of course, be lost to Scotland if Scots ever voted to leave the UK. The result would be catastrophic for those dependent on government monies. Ms Sturgeon has claimed, in her new economic ‘plan’ (that, so absent of detail, isn’t really a plan) she aims, in her separate Scotland to use oil and gas revenues and some borrowing to create in the first decade of independence a £20 billion New Scotland Fund, on the model of Norway’s wealth fund.
Yet the economist Tony Mackay, whose brainchild the Norwegian wealth fund was, tells us (Sunday Times, 30 October 2022) that it is “extremely doubtful” that future oil and gas revenues would provide such a bonus since they would be “very small in the first decade of independence”. He added: “How a New Scotland Fund would be financed is very unclear”. Beyond that, we have to ask who would lend to a new regime either using another country’s currency without a functioning central bank or a lender of last resort, or else starting a new currency from scratch, with the same deficiencies.
The question that seems to hang in the air without an answer is this: Is Scotland a better place for having a separate political regime? What advantages has it brought us? Some would say that it was a good thing that the Scottish National Party was afforded a more accessible stage on which to play out its grievance agenda. Already before that, there had been SNP party political broadcasts in which Alex Salmond and Jim Sillars, among others, had claimed that Scots sent their hard-earned revenues to Westminster in return for ‘pocket money’. Nationalists are still making the same false complaints.
But the $64,000 question remains: what benefit has devolution brought to Scotland? Has it made us wealthier, fairer and happier? The answer has to be no. We are not generating enough wealth to pay for our needs and ambitions. We need the Treasury’s annual support of billions of pounds to keep us solvent and in the style to which we have accustomed ourselves. Are we fairer? The major changes made in the last fifteen years, in terms of universal benefits, have redistributed wealth in favour of the middle classes. This is especially true of the much-vaunted ‘free’ university tuition. That would not meet anyone’s definition of ‘fairer’.
Would more powers help with any of that? Professor James Mitchell, of the University of Edinburgh, says of the Scottish parliament:
“Frankly, they’ve got ample powers to be getting on with the job and they’re not really using them. They’re not really addressing poverty with the kind of focus that the language, the rhetoric would suggest. So I don’t think they can get away with the rhetoric all the time that it’s somebody else’s fault… This has been a middle-class parliament for a middle-class population and electorate…”
As for ‘happier’, the Scotland I remember from ten and more years ago had its divisions, between the classes, to some extent – but not universally – between those of different religions and between different football clubs. Now, however, we have deep and bitter divisions between those in favour of remaining in the UK and those determined to leave it, based on a highly dishonest SNP narrative and packs of lies, supported by nationalist Greens. Scotland is an unhappy and divided place. As Stephen Daisley says (Daily Mail, 21 March 2022), “Scottish politics has ceased to be about right and left or even right and wrong and has become about who has a right to speak and who doesn’t and who is a true Scot and who isn’t.”
Is this what devolution was for?
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Photo of Green nationalist Ross Greer MSP courtesy of the BBC
