Leaders: Who will be brave enough to raise taxes?

It was those two great Scan­dinavian political economists, Benny Andersson and Björn Ulvaeus, who first coined the phrase that might have been made for the political debate in Scotland in the run-up to the independence referendum.
Picture: Ian RutherfordPicture: Ian Rutherford
Picture: Ian Rutherford

In Money, Money, Money, the Swedish philosophers wrote about all the things they could do if they had a little money in a rich man’s world.

While we would be reluctant to compare Alex Salmond and Nicola Sturgeon to Benny and Björn – and certainly not to
Agnetha and Anni-Frid – the promises made by the SNP as we head towards the referendum have an Abba-esque qualities to them. If we had a little independence, the SNP argue, there are so many things they could do to make Scotland a fairer and more prosperous country.

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It is in this context that we have to see another timely warning on the prospects for spending in the years up to, and beyond, the referendum, from the respected Glasgow-based Centre for Public Policy for Regions (CPPR).

The think-tank economists’ projections are, to put it mildly, bleak. As a result of the banking crisis-induced cuts by Westminster, Holyrood has a lot of financial pain still to come. The UK coalition will argue that it had to curb spending to get the country back on the straight and narrow after the massive banking bail-out in 2008. Be that as it may, the result is no less painful for Scotland.

However, according to the CPPR, that is only half the story. With the SNP government, like its Westminster counterpart, protecting areas such as the NHS, other areas of public spending face eye-watering cuts. And yet, the Holyrood government refuses to disclose its spending plans more than a year ahead.

We do not know, CPPR argues, where the cuts will hit, but we should be told.

While this is a reasonable point, and could apply both to Holyrood and Westminster – politicians facing a referendum and an election are reluctant to admit they may need to make cuts – there is another side to this debate which has been ignored.

First, it is possible that even if Scotland votes Yes to independence, it may not install an SNP government. So the onus is on all the parties to spell out their spending plans. Second, the Scottish Parliament already has tax-raising powers and from 2016, thanks to the latest Scotland Act, will have the power to raise much more. If – and this is crucial – politicians choose to do so.

So we cannot say cuts are inevitable. There is an alternative: taxes could be increased. The challenge for politicians who
oppose cuts is to be more honest as to how they might make up for them. Raising taxes is a perfectly legitimate way of covering a spending shortfall, but are there any politicians in Scotland, from any party, brave enough to suggest such a radical solution to the budget problems? We hope so, but we fear, from past experience, that our hopes will be dashed.

Austerity also begins at home

Charity, it is said, begins at home. This is a maxim charitable organisations must reflect on when it comes to the salaries of their chief executives.

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Is is right that the number of executives at charities connected to the Disasters Emergency Committee (DEC) – which brings together major donors to help countries afflicted by floods or famine or earthquakes – being paid £100,000 or more has

increased from 19 to 30 in three years?

Can these salaries – at organisation such as Action Aid, Age International, British Red Cross, CAFOD, Care International, Christian Aid and World Vision – be justified when they are spending money donated by the public to help the poor and the down­trodden across the globe?

The answer to these questions is obvious to most right-thinking people. No, it is not right; and no, they cannot be justified. Remember, the aims of these charities often include the alleviation of poverty or suffering.

Of course, as the charities argue, the leaders of these organisations do have significant responsibilities. Big charities are big business. However, there is a suspicion that, echoing the bad practices

of big business, the pay levels have crept up without the donors – who contribute after being hit by modern, heart-strings-pulling advertising – knowing much about it.

There is a solution. Charities should be required to state prominently on their website how much their senior staff are paid, and what proportion of their funds go on staffing, compared with the amount being spent for their charitable ends. That would be an incentive to control salary inflation. For charities, austerity should begin at home.