It’s interesting that the devolution promises coming from the main UK political parties (your report, 3 June) seem to be inversely correlated to their chances of a majority in the Scottish Parliament.
One wonders if the proposals, however vague, will be enough to convince voters to reject a Yes vote. When framed in terms of “more powers” they may well prove attractive but there is a very real chance that the parties which form the core of the Better Together campaign may have shot themselves in the feet.
The announcement of the Tory-flavoured version of devolution in the form of the Strathclyde Report seems to slightly outstrip Labour’s devo-mini version, albeit its announcement was caveated with phrases along the lines of: “We’re not sure how this is going to work but I’m sure we can work it out.”
Not very reassuring. There was no mention of the costs, of course, although I’m sure the 23-year-olds at the UK Treasury will be able to make something up.
The crux is that the whole concept of devolving income tax-raising powers in isolation is ludicrous.
Let’s imagine the Tories cut income tax rates to boost growth (if you believe there is a link). The economy booms but we don’t get the benefit of increased national insurance contributions, corporation tax and VAT receipts.
So what’s the point, you might ask? It’s not even that clear that we would get any benefit from increased income tax as there would be pressure from English MPs to reduce the grant we currently receive via the Barnett formula (which isn’t mentioned at all in the report).
Let’s imagine the Labour Party increases income tax to pay for additional services.
Ignoring the fact that voters are not going to be happy about this (particularly those just north of the Border looking enviously on those a few miles south), how would the electorate react if at the same time oil receipts were booming, perhaps as result of the massive investment currently being ploughed into the North Sea?
Whether the electorate will be smart enough to work out that devolution isn’t the panacea that many believe it to be is a different matter but I for one am not being fooled by “fool’s gold”.
Andrew S R Gordon
As the bidding war between the unionist parties continues I await with great expectation as to which of them will offer Scotland its corporation tax and its oil and gas revenues. I will wait forever.
Offering a devolved Scottish Government the responsibility of collecting a tax that is already collected with the added “attraction” of increasing it a bit on some of its citizens is being presented as some kind of generous concession while London keeps total control of the really big taxes which comprise the vast majority of revenue collection.
They must think we are daft. Some of us obviously are. Mostly employed in the media.
Dave McEwan Hill
The further devolution proposed by both main unionist parties is centred on increased powers to vary income tax rates. I doubt if this would be of much significance in practice.
If higher rates were increased significantly the wealthy could, in many cases, establish residence elsewhere, perhaps taking their business with them, and inward investment would be inhibited.
In the globalised economy the UK suffers the same constraints. It should be noted, too, that the rules on residency and avoidance remain the province of Westminster.
If there were a general increase in rates, no doubt some party would seek electoral advantage by promising a reduction and others would tend to follow.
The possibility of more powers being used to cut current levels of tax does not seem to be on the cards.
In short, the further powers offered are more apparent than real, like the tax-varying powers Holyrood already has.
Incidentally, I note that both Labour and the Conservatives are quite firm that oil taxation will remain with Westminster, though we are constantly being told the yield is erratic and is rapidly dwindling to insignificance.