Salmond backs off independence

We’ve been neglecting Scotland lately but the Economist has come to our rescue. Cutting through the thicket of Alex’s latest manoeuvres, the posh paper notes that the wily First Minister has put independence on the back burner- even though he’s still formally committed to holding a referendum on independence before next May’s elections – if only the Holyrood majority would let him, which they won’t. Instead, he’s playing a longer game.

Scotland, he argues, should be responsible for setting and collecting nearly all the taxes it pays (EU rules forbid geographical variations in VAT within a member state) and should then pay a chunk of them to Westminster in exchange for services such as defence. A similar system operates in the Basque country of Spain, and a rudimentary form of it operated in Northern Ireland when the Stormont Assembly was set up in 1921.

Well, we know  they mean the old Parliament that moved to Stormont in the 1930s. And through the Joint Exchequer Board, we got more back than we put in, to the frequent annoyance of the Treasury.

But today who in their right mind would want to exercise the Calman 10% tax varying powers the UK government are about to introduce? Before they bring forward the Calman Bill,  Holyrood will have to give consent, as Devolution Matters points out. Salmond’s proposal has its attractions – if only Whitehall would accept his calculations over “Scotland’s Oil” which they wont.  Still, an interesting poker game will ensue in Edinburgh.

Attention is already turning to next May’s elections, when a big question will be –will the Lib Dems become the surrogate for the Westminster coalition as a whole, thereby reducing Cameron’s chronic democratic deficit north of the border? Or will they keep their independence  or  line themselves up as Labour’s potential coalition partners once again? What an  interesting set of choices!  Either way, the gap between politics north and south of the British border seems set to widen – but within the Union.

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  • Alias

    The Calman proposal would have the effect of ensuring that Scotland used its taxation powers to increase taxes rather than decrease them – the hand of Perfidious Albion again, alas.

    I don’t see how Scotland can circumvent the EU handicapping its progress toward greater autonomy, either. After all, it is the EU and not Westminster that has the sovereignty over whether or not Scotland can have separate taxation powers from the rest of UK and which has the sovereignty over the precise terms.

    Scotland must meet three conditions in order to qualify as a “sufficiently autonomous” region and thereby be permitted under EU (or, rather, ECJ) rules to have differential taxation powers: it must have institutional, procedural and economic autonomy. In other words, the regional body that takes the decision must have a separate administrative status separate from the central government under a constitutional arrangement; the central government is not permitted to interfere in the decision, and the regional body must carry the consequences of that decision without aid or subsidy from the central government to offset it.

    In effect then it must forfeit its subvention under the Barnett formula if it is to comply with the dictates of the supranational agency to which the applicable sovereignty has been transferred. Unlike the rest of the UK, Scotland is self-sufficient but the revenue from the oil that makes it self-sufficient is confiscated by the central government leaving it dependent on subvention. Even if the EU didn’t frustrate Scotland’s autonomy, the central government would frustrate it by continuing to confiscate its oil revenue.

  • Wilde Rover

    Alias,

    “Even if the EU didn’t frustrate Scotland’s autonomy, the central government would frustrate it by continuing to confiscate its oil revenue.”

    I think if the deal was that BP was renamed SP then the English might jump at the chance;)

  • Quintin Oliver

    Interesting piece in yesterday’s Herald here by world referendum expert Matt Qvortrup on how Salmond could run his own ‘minority’ referendum:
    http://www.heraldscotland.com/comment/guest-commentary/could-or-would-the-scots-vote-to-go-it-alone-1.1038547

  • Brian Walker

    Quintin

    I saw it – such a referendum would surely be pointless and no more than a government funded opinion poll- and anyway not helpful to his cause, as Salmond now acknowledges.

  • Now there’s also this simultaneous referendum on AV.

    Provided that works up enough froth, it should up the turn-out for next year’s local and Assembly elections. Under different circumstances, exploiting gross dissatisfaction with all things Westminster, that should have been self-basting Salmond’s moment of opportunity.

    Now he is a stale, stuffed and poached Salmond.

    By next May, the new austerity will be cutting in. Salary-slips will be showing no increase in gross pay, but the deductions will be up. VAT @ 20 % will be cutting in. The young idea, out of uni since this summer, still job-hunting, and getting desperate. Growing redundancies. House prices look like having a double-dip. etc. etc.

    Short of a minor colonial war (G. Adams waving a tricolour from the top of Rockall, anyone?), not a good time to be a Tory defending one of those council seats won in the annus mirabilis of ’07. Not a good year for the SNP to be fighting off a resurgent SLP, with new leadership and a new narrative to sell (and happily hoovering up loose LibDem waverers to boot).

    All in all, then, probably a good call by Salmond. Shifting focus from the symbolic “national” issue to the realistic tax issue plucks a small spark of hope from the ashes of despair. Particularly since Cameron is already on record as half-accepting it. So, at best, a triumph to shout about. As a fall-back, it might, just might be divisive for the Scottish Tories. Then: cui bono? — the Tartan Tories of the SNP, of course.

    Heh, heh!

  • Ciaran

    the economic case for irish unity isnt there at the moment with high unemployment down south.But by 2030 there will be a clear enough catholic majority in NI plus a richer south self sufficient in electricity to make this a cert