Monday, 1 December 2014

Devo Fudge

The scene: a modern office, Edinburgh. There is a large round table in the centre of the room. 11 people are seated around it.

Adam: ... So yes, yes we're OK about letting Holyrood run everything, election-wise.
Bob: Really? Everything?
Linda: 16 year-old voters? Numbers of MSPs? Constituencies?
Adam: Yeah
Linda: Political parties...
Adam: Yup
Linda:... And donations to the parties, Adam?
Adam: TAKES PHONE CALL IN HIS EAR BUD. Uh-hu. Da (or however you say 'yes' in Russian)
Adam: Well obviously not the donations, Linda.
Bob: So not everything, then Adam.
Adam: Yeah, like I said. Not everything. Obviously.

The same room, some time later...
Adam: George says it's OK for the Jocks to run their own income tax
Bob: [sotto voce] I wish you wouldn't keep saying 'Jocks' Adam. It's not helping us to build a consensus.
Linda: That's good news. We'd like to control income tax. You do mean it this time don't you, Adam? Income tax. The stuff workers pay?
Adam: Yeah, whatever.
Linda: So we'll be able to raise or lower rates? Great! We can finally tax the folk on high incomes!
Adam: Sure, go ahead...
Adam:... 'Course, depends what you mean by 'income'.
Bob:  It sounds like you are being verbally imprecise again, Adam. I've told you about this before.
Maggie: What's this about 'income', Adam?
Adam: Obviously we can't let you kilties define what you mean by income. Obviously.
Linda: So you mean we can raise the tax...
Jean: ...but if we do you'll just change the definition of 'income'...
Adam: Yeah, and stuff like allowances. Starbucks asked us specially. I spoke to their guy in Liechtenstein just now...
Linda: ... So we're not really in control of income tax.
Adam: You got it, Linda

Paragraph 95 is the killer app in the Smith Commission report. Labour and Conservatives must have been laughing up their sleeves when they slipped that one in. Because it says that increases or decreases in income for the Scottish Government will be reflected in adjustments in the block grant to Scotland, 'indexed appropriately.'

These are weasel words. Smith might mean that the block grant will be adjusted proportional to inflation, proportional to Westminster cuts, or inversely proportional to Scottish Government income.  At least two of these possible meanings are detrimental to Scotland. The last is the worst, because it means that if we raise more income (e.g. through a land tax) Westminster will simply knock it off our block (Barnett) grant. A zero sum game.

And the LibLabCons have, once again, shoved Scotland into the Naughty Corner. By focusing on income tax they've made what looks like a concession but is on fact a political A-bomb. Income tax is the one that gets the voters out of bed. They don't get excited about the Aggregates Tax or even Corporation Tax. But income tax is a vote winner or loser. Which is why Smith handed the hottest potato, income tax, to the Scottish Parliament and kept the real money-spinners including oil and gas revenues with Westminster.

As today's The National ( points out it's an attempt at a stitch-up.  Without control over all the levers of tax and benefits Scotland will be unable to manage its economy. There will be lots of political noise, people shouting at each other about taxation, but no real economic action.

At the May 2015 election we've got an opportunity to tell the LibLabCons that we're not having it. Vote in enough SNP MPs and we could push through Devo-Max, not the Devon-Fudge that my Lord Smith has offered us.

The strategy is simple to say and hard, hard work to deliver. All of us, everyone who supports independence for Scotland, will have to be out there chapping doors, listening to people and winning them over to our cause.

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