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Thursday, 22 July 2010

Is Scotland heading for disaster?

This seems an unusual and perhaps even inappropriate question to ask. However, having read Joan McAlpine's poorly researched polemic in yesterday's Scotsman (Scotland is heading over a cliff to disaster) I feel compelled to respond.

Ms McAlpine claims that implementing the proposals of the Calman Commission "will impoverish our people and result in cuts...more savage than anything the rest of the United Kingdom will experience". She particularly objects to the fact that the Commission's proposals are likely to be introduced "without a referendum" and therefore lack democratic basis, although in suggesting Scotland will not be consulted on the proposals she conveniently overlooks the provisions of the The Scotland Act 1998 (1998 c. 46) which "allow the powers of the Scottish Parliament and the Scottish Executive to be adjusted over time by agreement between both Parliaments by means of an Order in Council". This argument is not only simplistic but facile. There is nothing to prevent constructive dialogue between the Cameron-led government in Westminster and Salmon's government in Holyrood.

McAlpine refers to the justified criticisms of the economists Drew Scott and Andrew Hughes Hallet, whose work has also been used by the SNP to make political capital: "Calman is London parties' poll tax". The economists' concerns include the overdependence on income tax revenues and the lack of a share in UK VAT revenue. McAlpine draws on this to conclude that having Scotland's income tied exclusively to fluctuating income tax will result in our being "£500million worse off per year"; she also asserts that the Lib Dem policy of increasing the threshold at which income tax is paid will inevitably reduce Scottish income as long as no provision exists to claw the money back elsewhere as income tax revenues shrink.

These of course are legitimate and understandable concerns, but clearly McAlpine has not examined Lib Dem fiscal policy in detail and appears ignorant of aspects of the party's proposals to fund the reduction in income tax to the lowest earning. She ignores the need to alleviate poverty and provide incentives to work, preferring instead to focus on what appears to be a narrow nationalist agenda. Lib Dems, including Tavish Scott MSP, are aware of the inadequacies of the Calman report and have been advocating instead "Calman Plus". As Mr Scott told The Scotsman in May: "Calman’s vision of a stronger Scottish Parliament within the UK does not represent the finishing line for Liberal Democrats. The Steel Commission argued for greater change ... so I want to see Calman Plus emerge from the work. This lays the responsibility on Alex Salmond. He has to decide whether he wants to be constructive ... and work with the UK Government and others. The ball is firmly in Mr Salmond’s court. If he plays on the pitch which strengthens Scotland’s Parliament then much can be done.” The "Calman Plus" proposals include giving Holyrood even greater control over taxes raised in Scotland as well as corporation tax and a share of oil revenues.

What Joan McAlpine's misinformed polemic also fails to appreciate is that, as Vince Cable stated recently, "Calman Plus" is now UK government policy. She claims that the Lib Dems are "behaving like sightless men leading a mass of blindfolded people over a cliff" and accuses us of being motivated in our constitutional polices by nothing more than a loathing of the SNP. She goes as far as to question the political neutrality of the Calman Commission itself, stating that "[in] financing Scotland...it doesn't matter [to the Commission] whether the figures add up. All that really matters is keeping the Nationalists at bay". She repeats the SNP's rhetoric that only full fiscal autonomy could boost Scottish economic growth, something roundly dismissed by the better informed Iain MacWhirter in The Herald (Fiscal autonomy? Better be careful what you wish for... 5/6/10)

McAlpine's political sympathies may be obvious, but her use of unnecessarily emotive and sensationalist language is irresponsible. Furthermore, her singling out of Scottish Secretary Michael Moore as weak, ultra-cautious, lacking "fight" and "knobbled [by] mandarins...and civil servants...[to]do as he's tellt" lacks any kind of evidence base. This is prejudice masquerading as intellectual critique.

The Scottish Lib Dems have, unlike the SNP, supported the Calman process and have been pro-active in promoting an even more radical agenda along the lines of the proposals of the Steel Commission. This pro-activity, coupled with the Westminster government's acceptance of the "Calman Plus" arguments as a basis for policy, is not something Liberal Democrats should apologise for. Yes, there are concerns about the findings of Scott and Hallett that dependency on income tax alone would result in either public spending cuts or increased taxation; this is why Lib Dems are proposing something different and further reaching.

McAlpine fails to ask the question "if not the Calman proposals, then what else?" Certainly not full fiscal powers, which would result in the Scottish government having to cope alone with an inevitable budget deficit. The SNP argument that Scotland's current surplus is evidence of Scotland's capacity to "go it alone" is a false claim; if anything, this figure is evidence of the benefits of the status quo, however imperfect the current arrangements. A party as renowned for large-scale public funding initiatives, Salmond's SNP would be completely incapable of living within its means if it were to secure full fiscal autonomy.

As MacWhirter points out, Calman "insisted on tax sharing rather than simple fiscal repatriation" because it would be socially irresponsible to abruptly end "the considerable public subsidy transferred to Scotland through the mechanism of the Barnett Formula...London politicians can not be given an excuse for dumping Scotland, and its social problems, on its own resources...it would be a grotesque injustice if Scotland was to be propelled into fiscal crisis because a capricious Westminster opts for a clean break." The Lib Dems and the UK government understand this, as well as the shortcomings of the Calman proposals, which is why Calman's report will not be implemented unquestioningly and without scrutiny. It will certainly not be adopted wholesale, and variants of the Calman proposals will be carefully considered in respect to the current government's economic policy and position on taxation -and their likely socio-economic impact on Scotland.

As Vince Cable tacitly indicated, the Calman proposals are merely the starting point in a new Westminster approach towards Scotland. The Liberal Democrats have historically supported an alternative fiscal arrangement which will both promote Scotland's interests and be far more transparent than the current system. The Lib Dem contribution towards this debate and their record on fighting for what is genuinely in Scotland's interests rather than on narrow nationalist agendas should, therefore, be applauded rather than derided.

3 comments:

Anonymous said...

This is the usual kind of tosh put around by the SNP who will never see the value in anything short of independence. No, Scotland isn't headed for disaster and the Scotsman should think twice before printing this kind of sensationalist drivel.

Anonymous said...

I'm a local Labour activist and while I disagree with some of your analysis it is true that Joan MacAlpine knows absolutely nothing and is simply an apologist for the SNP's small minded opposition to Calman.

Scotland is NOT heading for disaster because at the 2011 election Salmond and his gang of separatists will be thrown out of office. The media view that the Lib Dems will suffer badly is probably wrong, but there is no question that Labour will return to Holyrood as the largest party. Most people can see that the SNP have very little interest in anything than their pathetically weak arguments for independence.

Anonymous said...

Scotland is putting a lot of its future arround the oil industry however this may be a very bad idea.
There are now many very promising lines of research into battery technology for electric cars 500 miles per charge!
As aprox 70% of the oil companies profits come from transport what do you think will happen to the price of oil when this tech hits the market?
Electric cars are better than a combustion engine in every way apart from the battery when the battery problem is sorted I would not want to have shares in an oil company!
good luck Scotland your going to need it