Friday, November 19, 2010

Did Labour know about SNP tax power betrayal?

I was pretty livid when I read that the SNP Government had given away the Scottish Parliament's tax raising powers for the next three years by failing to pay the £50,000 a year maintenance charge to HMRC for them to do the work that meant that the power could be used. 

That power was specifically voted for by the people of Scotland in the 1997 referendum, so you would think that any government would ensure that the ability to use it was retained. Otherwise you would lay yourself open to accusations of betraying the wishes of the people. As a party the SNP moans that the Parliament didn't let it have the referendum on independence, an idea that's barely supported by a third of Scots asked in opinion polls, yet in Government it sees fit to ignore the stated will of almost two thirds of Scottish people, expressed in the ballot box.

It's not as if this power has ever been used, but in the current economic climate it might have been a good idea to retain it. It may be that using it would have been useful to retain a service that we Scots value that might otherwise fall victim of the spending cuts. I actually urged Tavish Scott and the Scottish Liberal Democrats to look at ways in which we could use the tax raising power in that way in a post a few months ago. Tavish has been the only politician in the last 12 years to seriously suggest a way in which the power could be used when he called for a reduction in income tax of 2p to create a stimulus in 2008. For John Swinney to have tied the hands of the next Government in such irresponsible fashion is unforgivable as far as I'm concerned.

And the SNP's defence - more bullish than I think is appropriate, to be honest. I would have been able to cope with this better if it had simply been an oversight from John Swinney. After all, he is the Minister for Everything. From the BBC report linked to above:
The Scottish government spokesman said that it did not advocate increasing income tax for people in Scotland and "spend yet more millions on a limited tax power which none of the major parties wanted to use".

I'm annoyed that the SNP could not find the comparatively small sum of £50,000, out of a budget of £30 billion, to retain the ability to use this power. It's not a huge price to pay. To me it seems a bit like paying our AA membership. I sigh every year when I see the subscription come out of our bank account because we hardly ever call them out. But there was one time I really did need them. Otherwise I might still be in that layby on the A92. 

I'm really annoyed that John Swinney has tied the hands of the next Government at a time when this might have been a useful power to have to safeguard things that we Scots value. It’s to me symptomatic of that SNP habit of whinging it doesn’t have enough powers and failing to keep in mind the powers it does have.  Is that anywhere near the ball park of what any of you are thinking?

To me this is symptomatic of the usual pattern of behaviour we've seen from the SNP - excessive whinging about powers it doesn't have, while failing to make full use of the powers at its disposal. I think that they should have entered into negotiations with HMRC in 2007 when the previous agreement expired. Any new Government coming in will probably find that it's going to cost a great deal more than it would have done then to sort things out so that Scots can have the powers they voted for.

Andrew has looked at the issue of whether John Swinney lied to Parliament. I wonder, though, if it's just the SNP at fault here.  The money was due to HMRC, run by the Treasury. Given that so many Scottish MPs were at senior levels in the Labour Government, not least as Prime Minister and Chancellor, I want to know if they knew what was going on and what action they took. At the very least, I would have thought that Alistair Darling should have written to John Swinney spelling out the consequences of failure to pay. And if it was so important, why didn't Labour make it public? Tell the Scottish people or at the very least Scottish MPs what was going on?

This is such an important issue that I feel it merits enquiries in both Parliaments so that the Scottish people can see who was responsible for selling their rights down the river. 


Nic said...

We didn't vote for tax raising powers in the referendum of 97.

We voted Yes for a parliament and No for tax powers. So that is completely wrong & in times of difficulty why should we pay £50,000 to be able to change income tax by ±3p which could at best only raise 1.5m a year.

Caron said...

No, Nic, you are wrong on that. 63.5% of those voting in the referendum voted Agree to the question The Scottish Parliament should have tax varying powers. It's not just about raising taxes, we have the ability to lower them as well, just as Tavish suggested two years ago.

The official result is here on the Scottish Parliament web page.

Jeff said...

Bit of fact-checking required here Caron:

"Tavish has been the only politician in the last 12 years to seriously suggest a way in which the power could be used"

Patrick Harvie of the Greens suggested using it in the last 12 days. Are you saying it wasn't a "serious" suggestion?

"m annoyed that the SNP could not find the comparatively small sum of £50,000"

You seem to be glossing over the £7m IT costs that were also necessary. How many jobs does that equate to I wonder?

Apart from that, I generally share in your indignation.

soosider said...

I think you are factually incorrect, the issue was that HMRC wanted a further £7m to maintain their IT system, having been given £12m by the previous administration. I would have to ask why should HMRC be charging the Scottish Parliament anything to have to match the legal requirement placed on HMRC by the Scotland Act, and why would the previous administration possibly have paid up for?
Scotland retains its power to vary tax, the previous run in time would have been 1 year now it is 2 years. This does not seem such a big issue as no party has chosen to use this power and none have declared any intention of doing so, so whats the issue.

Neil M said...

I am afraid I cannot manage to be indignant about this. With hindsight this tax-varying power is utterly useless and will never be used because any monies raised would just be clawed back by the Treasury.

To use Caron's analogy - a bit like paying for AA membership when you never drive.

@Jeff Let me defend Caron by saying that I am sure she was talking about Tavish as the only mainstream politician to have made the suggestion.

cynicalHighlander said...

Will M Moore resign over this.

Jeff said...

I'm not sure if that is defending Caron or making things worse for her Neil.

If the Greens are not a 'mainstream' party, what does that make them? The lunatic fringe?

I'll assume that Caron just didn't realise that the Greens had called for tax rises recently rather than believe that she treats the party with the same disdain that you seem to.


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