THE ongoing fiscal wrangling is much less interesting than harbouring old grudges, writes Brian Wilson
‘I want the Scottish National Party, here and in Holyrood, to have to start making decisions,” cried David Cameron. “Which taxes you are going to raise, what you are going to do with benefits”.
As aspirations go, that was unworldly enough but then he really went over the top: “I want to get rid, frankly, of this grievance agenda and then we can see what you are made of!”.
Chance would be a fine thing, came the unspoken reply. You may take our land and our freedom. But so long as 100 of us remain alive, you will never deprive us of our grievance agenda. It would be like taking salt from our porridge.
In common with the great majority of the population, I cannot summon much blow-by-blow interest in the great fiscal framework saga. Wake me up when there’s an outcome. Meanwhile, the pre-ordained script is proving tedious in its predictability.
Whatever financial formula was offered to accompany new powers would never be enough. However “no detriment” was defined, it would be disputed. Whatever financial risk was transferred, it would be too much. However a vow might be fulfilled, it would be a betrayal. We are bang on script.
That does not mean, of course, that the Nats are wrong to do their sums and find Scotland could be worse off as a result of any deal based on Smith’s recommendations. The problem is that this discovery contradicts every posture they have adopted for umpteen years about Scotland being a victim of the existing fiscal framework – i.e. the grievance agenda.
While “Full Fiscal Autonomy” was never the Nationalists’ ultimate demand, it was certainly their interim war-cry for a couple of decades. With the collapse in oil revenues, it has disappeared from their mantra. Confronted with the possibility of even a partial step in that direction, they are forced to admit that the cost could be too high and the risks too great. The roles are reversed and fallacies exposed.
We are now at the stage of negotiation by press release, each side trying to demonstrate its utter reasonableness with yet another variation of proposals hardly anyone understands. But the core problem remains. The Scottish Government wants to hang onto the benefits of the current system but also extend that principle to new powers, with taxpayers throughout the UK underwriting the cost. The position of the UK government is that once tax-raising powers are devolved, pooling of these taxes no longer applies. If Scotland raises more, we keep it. If the rest of the UK raises more, they keep it. Unfortunately, there are few grounds for optimism that the former would apply – and every variation of the argument thereafter merely seeks to get round that obstacle.
Cameron was wrong in one respect. The Scottish National Party at Holyrood is already making decisions on tax and spend. They have decided to slash council budgets and freeze council tax. They have launched a volley of crude misrepresentation against a modest initiative to neutralise these cuts. They have decided to increase NHS spending by less than the Tories in England.
Their seemingly effective shield against normal political retribution for such actions is to blame Whitehall for not sending enough money, even though – thanks to the Barnett Formula - it sends rather a lot. Without that defence, they are in the same boat as everyone else, to be held accountable for decisions and priorities. That is not a vessel in which they wish to sail for reasons which are evident from the current negotiations.
It may well be that there is no formula as favourable to Scotland as the one we benefit from at present and also passes any reasonable test of fairness to the rest of the UK. As the Scottish Affairs Committee of the House of Commons noted: “The Scottish Parliament will not just be taking on more responsibilities, it will also be taking on the Scotland-specific risks associated with them”.
This is the nub of the matter. At present, we are largely protected from these through the pooling of risk. This is not a popular point to make in today’s Scotland but the current debate confirms how vital it is. The report suggests that, under the new arrangements (if they ever happen), we would be “relatively protected on the spending side” – i.e. the UK as a whole would continue to pick up the tab for big ticket items, including most of the welfare budget.
However, getting the money in is a different matter. The certainties of the Barnett Formula would, to some extent, be replaced by distinctly uncertain factors reflecting Scotland’s own economic performance. It is at this point that the Scottish Government heads for the lifeboats, sending out distress calls. Future revenue, they say, must be linked to UK economic performance – not Scotland’s alone.
Some might think this an odd position for Nationalists to adopt. But that suggests a misunderstanding of what has been going on for years and has served them well – never acknowledge any benefits from being part of the UK economy and never stop biting the hand, no matter how fairly it has fed us.
And at the same time assert, on the basis of no evidence, that all of these arguments could be avoided, if only we were independent (and entirely dependent on our own tax revenues).
I have no idea whether or not the current impasse will be broken or what happens to the “powers” if it is not. But, yet again, I fear Scotland is not well served by a form of politics that is obsessed with the constitution and neglectful of the issues which do actually affect people’s daily lives.
The St Andrew’s House spin doctors will doubtless present the outcome of the stand-off, no matter what it is, as a wonderful example of “standing up for Scotland”. The alternative view is that – economically and socially - Scotland should be doing an awful lot better with the powers and budgets that currently exist.
As long as there is a grievance agenda to hide behind, it seems half of Scotland is utterly uninterested in that possibility. Which is why, one way or another, the grievance agenda will be preserved at all costs.