A Place to Stand

We have a quite astonishing political pantomime going on in Scotland. It reminds me of a situation comedy some years ago about an evil corporation having grabbed a public park which had been willed to the city in perpetuity on a token $1 rent & the city council forgot to pay the $1.

A few days ago a LibDim Michael Moore issued a letter saying that the ability of the Scottish government to vary income tax by 3p, the purpose of the 2nd question in the devolution referendum, had lapsed because the SNP government had failed, since 2007, to pay to upkeep the computer programme needed to carry it out.

Mr Moore said: "It is now clear that because the system has not been maintained at the previous 10-month readiness, HMRC would require two years' notice to invoke the SVR (Scottish Variable Rate).

"I am conscious that the various political parties will be considering their policy programmes for next year's Holyrood election.

"I felt it was imperative to inform them that this tax power, which formed part of the original devolution settlement, is not available to whoever forms the next Scottish government."

Alex Salmond has loudly counterattacked pointing out that it was not just that they had failed to pay the £50,000 annually to maintain the programme but also that Moore had not mentioned that a further £7 million one off was going to be needed as their share of a revamping of the relevant Inland Revenue computer system. He weakened this slightly by saying on TV today that he didn't expect that revamp to be completed before 2012. That would be 1 such revamp in 12 years which, at the rate computerisation proceeds is not excessive. The cost may be high because every civil service computerisation seems to be atrociously expensive but there is no reason to think it is out of line with such civil service projects in Scotland. When you bear in mind that the tax varying powers could return (or raise) £1 billion annually this is small beer.

The then Scottish Executive paid the UK Government £12 million in 2000 to add SVR functionality to Her Majesty's Revenue and Customs (HMRC) tax collection systems. Thereafter, an annual fee of £50,000 was paid.

HMRC said in 2007 that additional work was needed to maintain the readiness of the IT system, and in summer 2008 made clear that they would be installing a new IT platform. Scottish Government officials attempted to elicit information on what this meant for Scotland and the functionality of the 3p tax power.

We were finally asked on 28 July this year to pay over the sum of £7 million to HMRC for this purpose.

A careful reading of Salmond's letter shows no denial that they ceased paying the 50K in 2007 (no confirmation either but that is to be expected).

When did they know?

For decades the SNP's mantra has been that it is an "impossible task of transforming Scotland's economy with virtually no economic powers. The reality is that Scotland does not need more enterprise ministers; we need more economic powers for the Parliament" (Finance Minister John Swinney).

The new SNP line is that we meant to do that because our main economic power is useless, that no major Scottish party had wished to use it & that it would have been a waste to spend £7 million keeping it. Apart from the fact that this makes a joke of the SNP's entire raison d'etre, that we need more powers & ultimately independence to make Scotland successful it also means they are claiming to have deliberately lied to Parliament. Personally I think it is a lie. If it isn't a lie Salmond is lying. His claim that no party has supported using the tax cutting power is, at least nominally, a lie because in January 2009 the LibDims voted down the budget because they said they wanted to introduce a 2p tax cut. In fact they were lying too. They just wanted a bit of good publicity by appearing to actually do something & that such a cut would be popular. They never dreamt that Labour would vote against the budget too & it would fall. This is proven by (A) their total refusal to make any suggestions of what should be cut to pay for it & (B) the fact that as soon as they had won they, horrified at their "victory" changed their minds & voted for the budget without a whimper. Dishonest as the LDs certainly were Salmond's claim is equally dishonest. It also strongly suggests the SNP were not aware of their failure at the time since if they had said that they had waived this power it would have taken the wind out of the LibDim's sails. The Greens have also already said they want to raise the income tax rate so he is wrong on that point too.

If the SNP had known they had done this then their failure to inform Parliament is constitutionally a disgraceful deceit. Indeed only a few days ago John Swinney said, in his budget speech “Within the Parliament’s existing revenue powers, we have explored options for maximising our income. We have been mindful of the need to consider the effect of the significant tax rises that the UK Government has announced before we act. I therefore confirm that we will not raise the Scottish variable rate of income tax.”which, if he knew his party had erased that tax varying power, was a monumental & deliberate lie to Parliament in the most constitutionally important speech of the year. And for no serious gain. Another point is the the SNP's "big idea" changing rates into local income tax, depends on this same programming & they have continued to push, up to the present, for it to be introduced despite not only knowing that there was am ajority in Parliament against it but now, if we are to believe them, knowing it was no longer physically possible.

I am forced to the conclusion that this is incompetence rather than deliberate fraud. It is nonetheless as gross as such incompetence can be. The attempt to cover up by pretending it was intentional is then dishonest. Either they are incompetent liars who have no belief in their party's philosophical goal or they lying incompetents who have no belief in their party's philosophical goal - I go for the latter.

Fortunately the power is still legally there & can be revived, presumably by a larger payment than would have been needed to just keep it running. I hope it will be because I have long advocated cutting income tax by 3p as one of the things that would help us grow.

I would like to see a definitive statement whether the decision to let the power lapse, one of the most important things the SNP have done, was discussed & approved in cabinet - if it was not a boob it certainly must have been. If it was intentional when were they intending to come clean - sometine after the May election?

There are also questions for Labour. They were the government until June. Labour Ministers in London should have known of this, if they were more competent than their SNP counterparts appear. Were they? If so did they happen to mention it to the Scottish Labour leader. If not, why not? If so why did he keep silent? Could it all be a conspiracy of the numpties of all parties to kick into touch any need to make a decision on anything in future so that they couldn't come under pressure to lower or raise taxes? Thus they could all still draw their salaries & blame the English for everything without having to make a decision on anything but banning stuff.

If Scotland's Parliament is a real Parliament rather than a "wee pretendy parliament" they have only 1 option. All the other parties must call a vote of no confidence in the SNP government. They simply cannot pretend confidence in a government which has lied to them to hide its incompetence (or lied to them to hide its incompetent duplicity). This is what parties with any shred of honour would have to do. It would make little real difference because there is going to be an election in May - at best or worst it might move it forward a few months - but it would be the only constitutionally necessary thing to do.

I strongly doubt if any of them will do it. It has long been obvious that none of our parties really disagree on anything substantive & not a single one of them has the backbone to stand up for the truth. The coming election, even more than the last UK election, was never going to be about discussing issues. It was never going to be about anything important. I suspect we are going to see it become even more banal than that.

Labels: Fixing the economy, Government parasitism, Scottish politics