Tartan tax plot thickens

The plot thickens in the Brown v Salmond saga over the new tartan tax. The Times which has offered the most ambitious analyses of the game now sees Brown’s proposal as a move to appease English grumbling at having to shell out £30 billion a year to the Scots while also appearing to accede to Scottish demands for more devolved powers. Simon Jenkins, that vocal champion of local government writing in the Guardian, welcomes the idea of a genuinely local tax but pours scorn on Salmond’s version.

“Even the most favourable analysis suggests that 3p on incomes will leave a £750m gap after the removal of the council tax. The requisite level would be about 4.5p. That is above the Edinburgh parliament’s discretion, and London is unlikely to move on this. Nor will London continue to send £400m north of border that previously financed council tax rebates for the poor.” Won’t London? Maybe London has more leeway to be amenable than Jenkins has considered.

The block grant is already being squeezed year-on-year by Barnett formula convergence. Over time the expenditure per head across both Scotland and England will converge and eventually become identical. The bogey of the English subsidy to the Scots is much exaggerated, whipped up by English jingos. ” The faster the increase in public expenditure in England, the more the convergence effect of Barnett operates on Scotland, Wales and Northern Ireland.” The financial turndown slows down convergence but doesn’t halt it.

Ideas up Whitehall sleeves include plans for a Barnett formula replacement, whereby taxes raised in Scotland Wales and Northern Ireland would be supplemented by equalisation payments and conditional grants from London. Unlike the Barnett formula which is totally opaque, these grants would be openly negotiated. Labour would use them to guarantee UK national policy standards which the SNP mighn’t always like with but might have to tholl, while the Conservatives would put the squeeze on the devolved governments to keep their spending down. Quite a good way for Westminster to keep a large measure of control. Even if Brown is out, this issue will not die!

  • Equalisation payments? So you want to turn Scotland into Quebec with a weegie accent? Equalisation is an entirely failed model in Canada which is only persisted with because Trudeau had it written into the constitution.

  • Dewi

    It’s Scotland’s oil! Bring it on.

  • Terry

    Please do bring it on, then sod off and put England out of your misery!

  • Prionsa Eoghan

    >>The plot thickens in the Brown v Salmond saga over the new tartan tax.< >having to shell out £30 billion a year to the Scots while also appearing to accede to Scottish demands for more devolved powers.<

  • Prionsa Eoghan

    Also great comment from Brian Taylors blog;

    “Labour’s devolution scheme is a botched job. No tinkering with it can save it in the long run. The ambitions of the people of Scotland are outpacing any concessions that Labour seem to be capable of contemplating.”

    This sums up the job that Labour have to deal with. Ignoring it for as long didn’t work, now they probably don’t have the capability.

  • Terry

    Prionsa, if Scotland is part of the UK, it is UK oil. If Scotland want independence, then that’s a different matter but until then, they should be treated as just a part of the UK. The City of London doesn’t get more spent on it because it generates more cash than anywhere else and the same rules should be applied to Scotland, but unfortunately for England, they’re not.

    An indisputable fact is Scotland gets 25% more public money than England. If taxation remains the same, then welfare provisions in more deserving (needy) areas of England and Wales have to be reigned back in order to pay for the higher spending in Scotland. This means these areas are subsidising the higher spending in Scotland by way of reduced services.

    Why should needy areas of England and Wales suffer in order to give wealthy Edniburgh special treatment? It makes my blood boil!

  • Terry.
    Keep that blood boiling :0)

    The Barnet formula may do more to unwravell Ukania than generations of SNP agitprop LOL

    Hopefully UKIP rebrands itself the English independence party.

    Guess who will be the last clinging to “Britishness”?
    It may make your blood boil, but it makes me smile ;0)

  • Prionsa Eoghan

    Terry

    I would agree with you if much of what you are saying was true.

    >>The City of London doesn’t get more spent on it because it generates more cash than anywhere else and the same rules should be applied to Scotland, but unfortunately for England, they’re not.< >An indisputable fact is Scotland gets 25% more public money than England. If taxation remains the same, then welfare provisions in more deserving (needy) areas of England and Wales have to be reigned back in order to pay for the higher spending in Scotland.< >Why should needy areas of England and Wales suffer in order to give wealthy Edniburgh special treatment? It makes my blood boil!<

  • Terry

    Prionsa, take a look at this website, itr shows that Scotland gets more public money than every single English region and Wales…

    http://www.hm-treasury.gov.uk/economic_data_and_tools/finance_spending_statistics/pes_publications/pespub_pesa07.cfm

    It is possible to show London gets more if you count civil servants’ wages, army, navy and air force top brass, the Queen’s frocks, Gorbel Mick’s expenses, MPs second homes and the deputy Prime Minister’s dinner bills. None of this goes to people in the form of services though (as in Scotland). It just means more well paid people, higher house prices, more Michelin starred restaurants and a lower standard of living for ordinary people. A double whammy as someone once said.

    If you’re SNP, we’re on the same side. This kind of extra spending is designed to prop up the Labour Party in Scotland. Salmond knows it which is why he is always rubbing Brown’s nose in it.

  • Dewi

    “It is possible to show London gets more if you count civil servants’ wages, army, navy and air force top brass, the Queen’s frocks, Gorbel Mick’s expenses, MPs second homes and the deputy Prime Minister’s dinner bills.”

    Yep – the truth at last. It makes my blood boil subsidising this bunch of parasites…..

    Slightly seriously these people spend their money in the South East so it is a real economic benefit to South East England.

  • Terry

    If it helps the economy of the south east, it sure as hell doesn’t benefit the people. This is easily demonstrated by looking at the largess you’re able to afford due to the unfair Barnett Formula…

    TAXES AND TOLLS
    A freeze on council tax for three years
    Scrapping of tolls on Forth and Tay road bridges

    EDUCATION
    Smaller class sizes
    Free school meals for some Scottish children between the ages of four and seven-with plans to extend to children of all ages
    Free university fees
    Higher pay for teachers

    HEALTH
    Shorter hospital waiting lists
    No charges in hospital car parks
    Cheaper NHS prescriptions
    More readily available specialist drugs for many serious illnesses, such as cancer, sometimes free
    Prescription drugs and surgical procedures that are unavailable in England on grounds of cost
    Free dental check-ups and eye tests

    ELDERLY CARE
    Free care homes for the elderly
    Free central heating installation for pensioners

    THE FUTURE
    No council tax ? replaced by local income tax by 2011
    Free NHS prescription charges for all by 2011

    We’re taxed EXACTLY the same, so we should have EXACTLY the same amount in return. That, or we share it out on the basis of need.

    I wouldn’t mind but it would mean the latter but it would mean Scotland dropping from 3rd place to 9th in the hand-out stakes. Better still would be independence but that referendum isn’t going to happen until 2010.

  • Prionsa Eoghan

    Terry

    My comp is effed so am limited.

    In short we are net contributers, second only to perhaps the financial capital of the world in London. If anything we are short changed by what we get back.

    Your main problem seems to be how our guys spend the money, well solve the problem by electing better politicians yourselves. Ones that actually serve the people.

    As for 2010, I concur it can’t come quick enough. Your attitide ignores completely that we put in more than we get out, and yet are classed as beggars by the English chattering classes. Get real!

  • PE-I dont see a “Yes” vote in 2010.

    However I do see a “yes” vote for greater powers to the scottish parliament.

    We are all gradulaists now :0)

  • Dewi

    Fascinating Phil – Not sure I quite believe the extent of the change a Tory GE win would bring about – superb results for the SNP in general as well as on independence.

  • Terry

    Tony Blair puts England’s subsidy to Scotland at £10bn and the Scotsman Newspaper recently put it at £20bn. On the other hand, the McCrone report stated 30 years ago that Scotland’s surplus would be “embarrassing” if they were an independent nation. The truth is, no one knows because successive Government departments have obfuscated the facts.

    Maybe Scotland has subsidised the rest for the past 30 years (what about the first 270?), maybe not, no one knows. What we do know is Scotland gets more than she deserves.

    If you want independence, England should be asked too. If Scotland votes ‘yes’ and England ‘no’, then off you go. If Scotland votes ‘no’ and England ‘yes’, off WE go. Given a minority of Scots currently want independence but a majority of English want to see Scotland go, I’d campaign for a vote in England if I were you.

  • dewi-I lived through the last legitimation crisis in scotland with Thatcher & the polltax.
    This time it will be Cameron in Downing Street against Salmond (woth a working majority?) in Hollyrood.
    In the 80s it was some discgruntled Labour controlled local authroities (like the huge stratchlyde).
    However at the end of the day these folk were all unionists.
    the legitimation crisis was in the community.
    Many people in labour’s heartleands just couldnt bring themselves to vote SNP (I am referring to the Glasgow Irish).
    The 1987 GE in the East End of Glasgow started to change that. (see my blog on the GE by-election on my site)
    Salmond-I am confident-will play this one well.
    he will hype up the lack of democratic mandate that the Tories have to rule Scotland.
    The union is unwravelling……..