The Tax Raising Powers of the Scotland Act 2012 and the Independence Debate

Scotland Act

Every day, it seems that our news bulletins, or our morning radio shows, have someone or other (a new face each time) from Westminster saying one thing, followed by the irrepressible Nicola Sturgeon giving a contrary point of view. The arguments often seem to consist of opposing untestable assertions about what might happen if there is a ‘yes’ vote (e.g. how the negotiations with the EU might go, whether the USA would play hardball with us on entry to Nato, whether a new Scottish Government would spend more money on childcare or whether the present one could or should do so now).

“This is what will happen / No it isn’t / Yes it is / No it isn’t…..”  

The thought of this carrying on from now till November is enough to make even a hardened follower of politics like me give up!   

Confused and disheartened by much of this speculative tosh on both sides, I decided to read the Scotland Act 2012, implemented on the basis of the Calman Commission’s recommendations for extending the powers of the devolved Scottish parliament.  The Calman Commission was set up in 2007 on a Labour Party motion, against the wishes of the minority SNP government, with a brief  to investigate and report how the arrangements for devolution could be strengthened in the light of the experience of the first decade of the Scottish Parliament.  It reported in 2009 and recommended some evolutionary changes to the devolution settlement:

  • that the Scottish Parliament should have substantially greater control over the raising of the revenues that make up the Scottish budget, primarily through sharing with the UK Parliament responsibility for setting income tax rates and through devolution of some smaller taxes (Air Passenger DutyLandfill Tax, the Aggregates Levy and Stamp Duty Land Tax)
  • that the Scottish Government should have new borrowing powers to cover capital projects for capital investment (around £5bn initially)
  • greater involvement of Scottish Ministers in key decisions and appointments relating to UK bodies such as the BBC, the Crown Estate and the Health and Safety Executive
  • some further suggestions for improving communication, legislative overlap and joint work between Westminster and Holyrood.

The Scotland Act 2012 has put many of these recommendations into law and civil servants and Ministers in Scotland and the Treasury have since been working together on how to make the system work.  If there is a ‘no’ vote in the referendum, it will come into effect shortly thereafter and (as I understand it – happy to be corrected) will give the Scottish Parliament the power to increase the rate of income tax by as much as they wish and to decrease it by up to 10p down the way (not much chance of that!) – as well as new borrowing powers etc. The new powers on Land Tax and Landfill Tax could be interesting in the light of our commitment to sustainability, recycling and Land Reform.  

The reason for mentioning it here, is that, in the context of the often-asked question “what might or might not happen if Scotland votes ‘no’ “, on thing that will definitely happen is that the current Scottish Government, and any political parties standing for election in the 2016 Scottish government elections, could ask the electorate to vote for higher taxes to achieve Scotland’s social goals.  The social policies offered in the Independence White Paper, for example, might equally be obtained through greater fiscal power for the devolved parliament.  Am I the only semi-informed person who didn’t know this important piece of information?  Maybe I’m less informed than I thought I was. Why is nobody talking about this?  It seems that the choice is not between the status quo and Independence but a substantial reform which has already been enacted (not quite DevoMax but well beyond Devo #1) and Independence.  Instead of arguing about things we cannot predict one way or the other, we could also be arguing about what a new government should do with the new powers conferred by the Scotland Act. We know that these will definitely come into play if there is ‘no’ vote.

I would therefore like to see our parties laying out their vision of the best way forward, whether ‘yes’ or ‘no’  –  all parties addressing how they would handle a ‘no’ vote as well a ‘yes’ vote.  I would also like to see such a discussion carried out in a different way.  I abhor the Westminster style of partisan points-scoring, calls to tribal allegiance and adversarial style that has taken over our Holyrood politics. It is a style in which it is considered a weakness to acknowledge the insights of your political opponents and recognise that they too have a share of the truth, that no one party has a mastery of the best ideas.  The original vision for the devolved parliament was of a consensus building place, a place of collaborative discussion, where no one party would dominate and where the people’s representatives would seek together a best way forward, ‘seek the best collectively’.   I am ashamed and disheartened by the politics of simplistic slogans which alienates so many of us outside the charmed circle.  

I know it’s not going to happen, so I guess I am as much a victim of ‘if only.. pie in the sky.. ‘ as anyone else.   

But I can always hope.





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