‘Looking’ doesn’t magically deliver the powers to change anything

From stewartb

Apologies for commenting here without reading the full Reform Scotland (RF) report. I have read the summary with Chris Deerin’s related comments on the RF’s website. Candidly, I’m surprised at the negativity of reactions being expressed here.

My take is that the report focuses on: (i) Scotland’s demographic challenge – is that at all controversial?; (ii) need for higher tax revenue – let’s frame that as higher public spending for better public services and a better social security system; (iii) need for tax reform – arguing for wholesale, root and branch reform of Scotland’s tax system.

The implications here for agency – who decides – and thus inevitably constitutional issues are profound.

First on the ‘demographic challenge’: in a country having to accept unwanted removal of freedom of movement in the EU/EEA; with no control over immigration; and with severely limited fiscal and zero monetary powers, this ‘challenge’ is too important to be addressed – cannot be properly addressed – by a hogtied legislature in Edinburgh.

On higher tax revenue: as the RF summary implies, this can be achieved in different ways – including broadening the tax base. It doesn’t need to mean higher personal taxes on individuals. And of course deciding on the optimum level of tax revenue for Scotland in particular social, economic and environmental circumstances pertaining at different times requires a government with access to all necessary ‘system’ levers.

On tax reform: the RF summary states this: ‘ “In short, Scotland needs to start again. It needs a new and fairer tax system, focused more on immobile tax bases such as wealth and less on mobile ones such as employment income. This new system needs to be used to drive sensible and sustainable increases in overall tax revenue to cope with the challenges of the rest of the 21st century.”

Thinking this could be achieved whilst within the Union is … delusional!

In his own comments Chris Deerin writes: ‘“it’s very difficult to see how Scotland can meet its future commitments – whatever its constitutional status – without looking afresh at the tax system, at who and what we tax, and at what the right balance should be.’

Within the UK, ‘Scotland’ might ‘look afresh’ but ‘looking’ doesn’t magically deliver the powers to change anything!

He adds: “Redesigning the tax system is a major task, and a delicate one, but THE SYSTEM WE HAVE IN THE UK IS CLEARLY NO LONGER FIT FOR PURPOSE, and serves only to limit smart thinking. As in so much else, political vision and courage are what the nation needs in this period of change.’ (my emphasis)

The system ‘we have’ – viz. the system ‘Scotland has’ – WITHIN the UK is no longer fit for purpose? I’d suggest ‘wow’ is a reasonable (preliminary) reaction at this time!

Finally Deerin writes (hopefully): “We trust policymakers will find this contribution to the debate a useful, innovative and inspiring one.”

In this he may be disappointed given what must have been THE ALMOST INSTANTANEOUS REACTION OF THE SCOTTISH TORIES’ MURDO FRASER on Twitter:

Murdo Fraser @murdo_fraser
“Given that Scotland is already the highest-taxed part of the UK, the assumption here that we need even more taxes is a terrifying one. It would simply lead to massive capital flight south of the Border.”

Leaving aside his spurious claim, did Fraser not even read to the end of the press release never mind the whole report?

Reform Scotland vs. Stasis Scotland forever?

3 thoughts on “‘Looking’ doesn’t magically deliver the powers to change anything

  1. £3Billion tax evasion, £1Billion too much on the military. Trident and redundant weaponry. Illegal wars. Under estimated VAT. Not allowed to borrow. Westminster fraud. Paying for Westminster, Hinkley Point, HS2 etc. = £13Billion.

    Oil revenue fraud for 50 years. Westminster mismanagement and bad decisions. Brexit.

    Liked by 1 person

  2. I note that the Reform Scotland report referred to in the blog post has featured on the Scotland page of the BBC News website under the headline: ‘Think tank calls to raise and reform taxes in Scotland’.

    ‘Reform taxes to raise more revenue’ might have been be a more accurate representation – doesn’t have same trigger effect?

    I think what the BBC reports merits adding btl to what I’ve already posted.

    The BBC article referring to the RF report states: ‘However, it did not consider the implications of Scottish independence.’ But then later on the BBC Scotland Business and Economy Editor adds: ‘It’s only in the second last paragraph that the report’s author, Heather McCauley, raises the question of Scottish independence and where tax powers should lie. Devolution throws up anomalies. There are many challenges to the way Westminster raises tax from VAT and National Insurance. There are lessons to learn from countries that have addressed similar questions: from New Zealand to Norway.’

    So what does this notable SECOND LAST paragraph of the RF report say? It includes this (with my emphasis):

    ‘Both the EXTENT OF SCOTTISH GOVERNMENT POWERS and the practicalities of implementation may mean that NEW TAXATION IS MOST FEASIBLE AT LOCAL RATHER THAN NATIONAL LEVEL. IPPR Scotland has argued, for example, that consideration should be given to local carbon, land and inheritance taxes, given that Scotland’s “nearly full powers” over local tax means that policy innovation at the local level offers the greatest opportunities to broaden the tax base, including to help pay for the Covid crisis (Gunson, 2021b).’

    So let the Scottish Government tinker round the (local) edges and leave the rest alone for Westminster to reform on Scotland’s behalf? Might that not just be more ‘mitigation’?

    Interestingly, the LAST paragraph of the report which the BBC’s editor opts not to refer to states this: ‘In Scotland, a dispassionate discussion of tax policies and their objectives is PERHAPS made more difficult by the simmering question of independence.’

    ‘Perhaps’ is working hard here! And is it not ‘dependence’ – and lack of agency – not ‘discussion’ that makes it difficult?

    The long last paragraph goes on: ‘Although not discussed in the core of this paper, even countries with well-established and long- standing tax policy capabilities need deep expertise to develop an effective tax strategy, given the myriad of considerations that need to be assessed and weighed up. MOST COMPARABLE COUNTRIES – INCLUDING AUSTRALIA, NEW ZEALAND AND IRELAND – have set up independent expert commissions to undertake ‘root and branch ‘reviews of their tax systems every five or ten years while retaining democratic oversight of decision- making.’

    For the avoidance of doubt: in a report about reforming Scotland’s tax system is it perhaps worth clarifying that the three ‘most comparable countries’ mentioned are not comparable to Scotland in one blindingly obvious regard! And is the Westminster establishment capable of opting to set up far less implement the recommendations of a ‘root and branch’ system review of anything as fundamental as a tax system?

    The paragraph continues: ”The IfG (Institute for Government) has argued for AN INDEPENDENT TAX COMMISSION FOR THE UK to help create a more informed public debate and make space for tax reform … A COMMISSION OF THIS KIND, PERHAPS CHAIRED BY AN ORGANISATION SUCH AS THE OECD, COULD BE A GOOD STARTING POINT FOR SCOTLAND IN DEVELOPING A SCOTTISH TAX SYSTEM THAT IS FIT FOR THE 21ST CENTURY.’

    So a UK tax commission of the kind deployed by independent nation-states like NZ and Ireland is being recommended as a good thing – a ‘good starting point’ – for a ‘dependent’ Scotland, a Scotland with no effective agency over wider tax matters? Confused?

    By the way, some of the content of the BBC article comes from the Reform Scotland’s press statement for the launch of the report. However, the BBC omits this quote from the RF’s Chris Deerin:

    “Redesigning the tax system is a major task, and a delicate one, but THE SYSTEM WE HAVE IN THE UK IS CLEARLY NO LONGER FIT FOR PURPOSE, and serves only to limit smart thinking. As in so much else, political vision and courage are what the nation needs in this period of change.”

    The ‘nation’? So presumably given this is a report about Scotland, the conclusion being drawn here is that “the system we have in the UK is no longer fit for purpose” FOR SCOTLAND! I wonder why that quote wasn’t included in the BBC article too?

    Liked by 1 person

  3. Usually, unionists can’t see further than the UK and the way the UK is run because they believe that their way is the best and only way to run things. That’s exactly what we want to get away from.

    Like

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