Saturday, May 29, 2010

Queen's Speech: why Scotland's laughing.


 Ok, someone has to say it: last week's Queen’s Speech was really rather a good deal for Scotland.  Even the SNP have been struggling to find things to complain about.   And no - I’ve not become a spokesman for the ‘Condem’ coalition or been offered a gong in  Cameron’s next honours list.  We 're so suspicious of Westminster perfidy that we sometimes fail to see when it is playing straight.  The only cries of pain I have been hearing are from Tory MPs bending over backwards not to say anything offensive about the Scots. 
   Here's the bottom line: Scotland  gets exemption from the Tories’ ‘Big Society’ health and education reforms like opted out schools (older readers may recall Michael, now Lord Forsyth’s attempt to introduce them in Scotland twenty years ago); lots more incremental powers for the Scottish parliament - drink driving, firearms, control of elections etc..  On finance: no hasty dumping of the Barnett Formula; shallower cuts in public spending than were expected a month ago (though  maybe worse ones next year); and of course the Calman Report’s half-and-half taxation powers - if we want them. Oh and the fossil fuel levy.  And Olympics consequential money - probably.  This from a Tory-led government.  Ask yourself: would Gordon Brown have come up with anything better?  

  I suppose there are things we could complain about.  Given that so many Scots die young, upping the retirement age could mean even fewer Scots living long enough to receive a pension.  Boundary changes and further cuts in the number of MPs might dilute Scottish representation in Westminster and there aren’t many Equitable Life policy holders in Scotland.  But on the whole this programme is pretty reasonable for a Conservative Prime Minister.  It’s certainly a lot better than the alternative, which could have been deep and disproportionate cuts in Scottish spending coupled with the effective exclusion of Scottish MPs from the centres of Westminster decision making - and make no mistake there are many, perhaps a majority of Tory MPs who would favour just such a punitive answer to the Scottish Question. Instead we have Liberal Democrats bearing gifts.  

    But chattering Scotland doesn’t know whether or not to accept them.  There’s been a great deal of head-shaking about the Calman tax-raising powers and how they are likely to deprive the Scottish exchequer of much needed cash. The Scottish government has objected that the raising of tax thresholds to £10,000 might ultimately diminish the revenues to Holyrood, but it would take someone with greater tax expertise than I to explain how.  Anyway, that is surely the kind of issue that can be addressed in negotiations.  I take the simple view that the power to raise  even 50% of basic income tax is a remarkable concession from a unionist Treasury and would ultimately, lead to fiscal autonomy and the setting up of a Scottish exchequer and a Scottish national debt.  Once you start down the road of fiscal responsibility, there can really only be one destination. 

   If I were the Scottish government I would argue hard but accept Calman and then wait for the inevitable anomalies to arise.   After which time the the question of full tax autonomy, and the division of oil revenues, could be posed in a concrete form that voters could understand.   The point is that once you have the machinery in place to raise taxes you are more than half way there.  What the unionists would really really like is for the SNP government to reject the fifty-fifty reforms, after which they’d be able to say that Scotland was offered autonomy but was too feart to take it. 

    Now, I realise that within chattering Scotland I am in a minority in not seeing  Calman as a unionist plot.  Critics, like my friend Gerry Hassan insist that, if the Scottish government cuts income tax to promote economic growth, the Scottish budget could suffer even as the Scottish economy expanded.  There are certainly circumstances under which the Calman division of the basic rate could lead to perverse fiscal effects.  However, these can be mitigated, as in other federal systems, though the equalisation formula.  Yes, even under fiscal autonomy, there would still be a version of the Barnett Formula, if only to ensure that more prosperous regions subsidise less prosperous ones.  We don’t want to end up the Greece of the UK. 

     Gerry says that “The Calman tax powers are arguably the most ill-conceived proposal ever put together in modern Scotland”.  What,  even worse than the poll tax?  Surely not.  Even he concedes that Calman has opened up the whole debate on fiscal autonomy, which it clearly has.  And ask yourself: if the new UK government had point blank refused to consider the Calman recommendations on tax, what would we all have been saying then?  That London had vetoed even this modest measure of fiscal autonomy.  We are in danger of sounding like one of those  Morningside matrons who moan about the poor quality of the food and the complain that the portions are too small.
   
  Of course this was a politically motivated Queen’s Speech.   It is an attempt by the Conservatives to infiltrate the Scottish political citadel through a wooden horse called the Liberal Democrats. But that doesn’t mean that everything it does is anti-Scottish.  David Cameron doesn’t want to be the Tory Prime Minister who presides over the break up of Britain.  In my experience, UK Conservatives take the possibility of Scottish independence a lot more seriously than Labour ever did - and privately a few of them wouldn't be too sad if it happened.  But Cameron isn't one of them and he has worked hard to keep his nationalist elements in check. There will be an answer to the West Lothian Question, but it will be softy softly and down the road.   

    Cameron realises that his mandate is weak north of the border and that real concessions have to be made. Scots should recognise this and take what is offered with good grace.  Anyway, the new Scotland Bill, guided by the Libdem Scottish Secretary Danny Alexander,  is in line with what the vast majority of Scots say they want: which is a strengthened Scottish parliament with some fiscal responsibility within the United Kingdom. We should save up our grievance for when it’s really needed - after the next Holyrood elections in 2011 when the real cuts will bite. 

1 comment:

Conway said...

Iain we will never no what Scots want when we have not been asked the question,do you want the Scottish parliament to have the same powers that it has at the moment ,increased powers with limited fiscal control or full control of our affairs a seat in the EU and a seat in the UN similar to our Irish cousins who became independent from Westminster not long ago ?