Nicola Sturgeon, Scotland’s First Minister, has said there are “tough questions” around taxation in Scotland. In a discussion paper launched at Holyrood on 2 November 2017, Sturgeon and her Finance Secretary Derek Mackay believe that “time is right to consider afresh the role of tax in our budget decisions”.
In it, Sturgeon and Mackay state they wish to: protect and improve public services in the face of UK spending cuts, protect the incomes of low earners, make the tax system more progressive and reduce inequality, and support the economy. All laudable aims and nothing much to trouble anyone, surely.
It’s interesting that a discussion paper has been launched. Rather than publish his own tax proposals and have Holyrood debate and vote on them, Derek Mackay asked Holyrood to come up with proposals so he could have a think about them first. Mackay, though, has managed to get the ball rolling on an Air Departure tax. A long-held ambition of the SNP government has been to cut, or replace, what Mackay has called “the burden of air passenger taxation” although as late as last month, the Finance Secretary said that new powers may need put back due to EU rules. In case you’re wondering, that’s the same EU the SNP want to save Scotland from Brexiting using their newly devolved tax powers.
The question becomes then: do they mean to look at Scotland’s taxation in a meaningful way? During the election campaign, the First Minister repeatedly attacked Labour’s proposals to increase tax. In a blog post, Labour’s Blair MacDougall wrote out a handy guide for SNP members so they can understand the changing positions Sturgeon has given on tax. MacDougall reminds us that Sturgeon supports a 50p tax rate for the whole of the UK but not for Scotland. Sturgeon attacks the Tories for cutting the UK’s top rate and attacks Labour for wanting to put it back up in Scotland. It’s a form of Newspeak: we are in favour of the 50p tax rate. We have always been in favour of the 50p tax rate.
Scotland’s First Minister Nicola Sturgeon with Finance Secretary Derek Mackay
A major criticism of the SNP’s record in government is that they “talk left but walk right”. In other words, they’re trying to convince us that they’re a left-of-centre party when really their nickname of Tartan Tories is more accurate. It’s a feature of left-wing parties that they tax and spend. In an effort to understand the spending part, it’s worth looking at the SNP’s very own Growth Fund.
Launched with great fanfare in September 2016, Nicola Sturgeon told the country that it was a £500m vote of confidence in Scottish business. A “package of financial support for Scottish businesses”, the Scottish government says that businesses can access this funding via the Scottish Investment Bank. It’s a major issue for a left-of centre tax-and-spend government, of course, that not a single penny of this half billion has been spent.
What else are the SNP spending taxpayers’ money on? The First Minister visited the United States in April. In previous years, Sturgeon took time to appear on the Daily Show with Jon Stewart. In 2017, along with a climate change agreement with the Governor of California, and a photograph with a surprised-looking Hillary Clinton, Sturgeon managed to rack up more than £6,000 in car-hire expenses alone. Maybe that doesn’t seem an awful lot of money to be ferrying around a First Minister, but it’s worth asking what the head of the Scottish Government was really doing in America.
Before the SNP took power in 2007 under Alex Salmond, previous First Ministers used April’s visit to the US to help promote Tartan Week, which itself is an extension of that great American celebration, Tartan Day. Under the SNP, and Sturgeon in particular, Tartan Week has become an excuse to jolly around the States.
It could be argued that by signing a climate change agreement with a California Governer critical of the current US President, and a selfie with presidential-hopeful Hillary Clinton, Sturgeon is putting some more much-needed political distance between the SNP and their former friend Donald Trump. If that were the case, then why is the Scottish taxpayer expected to foot the bill?
The SNP won’t be the last party in power to be profligate when travelling abroad and they won’t be the last party to over-promise and under-deliver on business support. However, the SNP are staking their claim to Scottish Independence as the answer to all questions by attempting to provide competent government. The Scottish people have the right to expect a bit more than selfies and meaningless climate agreements with other regional governments.
Back to the tax proposals and the SNP discussion paper. The SNP sought and got proposals from all three opposition parties and their solitary ally the Scottish Greens. These are published on the Scottish Government website.
In summary: the Greens support a variety of tax-hikes; Scottish Labour and the Lib-Dems agree on some modest rises. Only two parties agree on no change to Basic, Higher, and Additional Rates. Those parties are the SNP and their sworn enemies the Scottish Tories. Both agree on retaining the three tax bands. The only disagreement is on the tax thresholds. Ruth Davison’s Tories favour keeping tax thresholds in line with the UK government, where the nationalists prefer to raise it in line with inflation until at least the tax year 2021/2.
So, what do with all these new tax powers that are coming the SNP’s way? It seems by talking left in the morning, and walking right when in the Holyrood chamber, the First Minister is both for and against tax rises. As for changes of position from one month to the next, when it comes to tax, the First Minister is paraphrasing the political leader she most resembles. It’s like Sturgeon is saying to us, “U-turn if you want to. I’m only signalling”.