Just a few hours ago, I pointed out that the Scottish Parliament had the opportunity to test the Scots' social conscience by means of access to their wallets...
The supposed driver for this is that Scotland is a "more socialist" country, willing to pay more tax in order to stave off the tyranny of austerity. This narrative is, of course, bollocks: were it not, the SNP (also the dominant party in Holyrood) would already have used the tax-raising powers that the Parliament has—up to 3p in the pound extra in income tax, if I recall correctly.And now, in the face of further cuts from Westminster, it seems that the SNP—now dominant in both Westminster and Holyrood—are flinging up their kilts and showing everyone what big balls they have.
John Swinney has admitted he is “considering” increasing income tax in Scotland next year to fill the gap in public spending from cuts by the Tory UK government.How exciting—let us see how keen the Scots are, indeed, to show how they are different to the UK. Oh, wait...
ollowing a summit in Whitehall with Chancellor George Osborne, the deputy first minister said that he could be prepared to use powers handed to Holyrood from the 2012 Scotland Bill to set a Scottish income tax rate above that of the rest of the UK.
An increase of 1p in income tax north of the Border would, according to the Scotland Office, raise £330 million for the Scottish Government.
The move has echoes of the SNP’s “penny for Scotland” in the first Holyrood election in 1999, where they lost heavily to Labour after proposing to raise income tax.Not so keen then.
But, given their earlier failure, what has driven the SNP to contemplate this dreadful message (apart from the fact that, politically, they have the people of Scotland in a double headlock)?
[Swinney] went on: “The cut of £107m is substantially lower than the UK government’s original estimate but is still too bitter a pill to swallow.Ah, no: this is what happens when you have relied on an overly generous relative for many years—and that relative runs out of money. It doesn't matter what plans you may have made: said relative simply cannot pay for them.
“This comes on top of an overall budget cut of 9 per cent since 2010, including a 25 per cent cut to the capital budget.
“It is completely unacceptable for reductions to be imposed in this financial year to the budget that has already been agreed by the Scottish Parliament.”
So, unless you are going to get off your fat arse and fund those plans yourself, you must alter said plans.
Mr Swinney also made it clear he told Mr Osborne that he “does not have a mandate in Scotland”, with the Conservatives winning just one seat and suffering the lowest proportion of votes since 1865.Yes, Mr Swinney: but, equally, that means that Mr Osborne has precisely nothing to lose by slashing Scotland's budget to ribbons, and sending the savings to places where the Tories might actually win more voters, e.g. almost anywhere in England (or even Wales or Ireland).
But the threat of an increase in tax was condemned by the Scottish Conservatives, whose leader Ruth Davidson has made a pledge that her party would try to block tax rises in the next parliament after the Holyrood elections.Why not? If the Scots want increased public services and less austerity, why should they not pay for it?
A spokesman for Ms Davidson said: “The new tax powers for the Scottish Parliament should not mean higher taxes for the Scottish people.
“The Scottish Conservatives have pledged to ensure that taxes will not be higher as a result of the devolution of these powers.Well, apart from him actually being in power—and having to make some derisory effort to balance the books. Apart from that, Ruth.
“There is no reason why John Swinney should not be able to issue the same assurance to families and businesses in Scotland.”
But what about the oil, eh? Well, as chokkablog points out, this is not really going to help that much.
Three times in the last 15 years the oil tide has risen high enough to submerge the underlying £1,700 per capita deficit difference and give Scotland a lower deficit than the rest of the UK. When the oil tide flows out we can see more of that underlying £1,700/person deficit difference, we see more of the £9.1bn.And the projections for the next few years are nothing like £10.1bn: in fact, for 2015–16 oil is likely to raise just £600 million—short by £9.5 billion. That's rather more than 10% of Scotland's GDP.
So let's take a closer look at the oil figures.
For Scotland to cover the underlying £9.1bn deficit gap we need total North Sea oil revenues of £10.1bn (because c.90% of North Sea oil revenues are attributable to Scotland).
John Swinney must be pretty desperate to even consider increasing income tax in Scotland.
If the SNP do get full fiscal economy, the man will probably shit himself.
And with good reason...