There are lies, damned lies and …

jimtoggleJim O’Neill finds the First Minister coming up a little short in her understanding of taxation – and what “progressive” actually means.

 

As the current Scottish Parliament came to an end, both the Herald and the Scotsman had headlines suggesting that support for independence was the highest in fifteen years. One wonders what school these journalists went to. The figure from the Scottish Social Attitudes Survey was 39%. Remind me, didn’t 45% vote for Scexit in the referendum? I always thought 45 was higher than 39 but I admit my Higher Maths was nearly 50 years ago. Maybe the New Maths counts differently. Is this Curriculum for Excellence?

I was looking forward to putting this to now ex MSP (since last Wednesday) Chic Brodie on the Irvine Beat phone-in but he has been taken of the show until after the election. It is unlikely that he will be back at Holyrood because he is 7th on the South of Scotland list.

Meanwhile, following their decision not to do away with the “hated” (their word) Council Tax, the SNP followed this by guaranteeing no increase in income tax for Scots. Just how this was going to be progressive and redistributive wasn’t clear.

Labour, of course, have been clear about both. We will remove the Council Tax and we will use progressive income taxation to rebalance some of the Tory austerity passed on by the SNP government.

Sadly, for a First Minister, Nicola showed a regrettable lack of understanding how taxation worked. When Kez challenged her at the last FMQs to justify her adoption of the Tory approach to income tax, she said that she couldn’t put the highest rate up because those affected would move south to England. First she did not seem to know that the flight of the well paid did not happen when Gordon Brown raised the top rate, but the biggest error was not knowing that tax is assessed where the income is paid, not where the payee lives. That is how, for years, the highest paid have avoided lots of tax using offshore trusts to pay them.

She also showed a sad lack of understanding as to how devolution works. For years we baited the Tories by noting that they didn’t understand devolution, but it seems this is a problem for the SNP too. While claiming that Corbyn and McDonnell had voted for the Tory budget, which was demonstrably untrue in the vote only two days before, she then suggested that Kez would be just like them. She also attacked Willie Rennie of the Liberal Democrats by harking back to their UK support of the Tories in the coalition.

Labour in Scotland have spent the last few years demonstrating that we can have different policies from our counterparts south of the Border, most notably over Trident. That is how devolution works. Labour in Scotland should be tested against our Scottish policies, not policies operating in England or Wales. Recent decisions have shown that we are much more radical and redistributive than the SNP and this is already playing well on the doors.

At the same time, over at Westminster, the Tories agreed a Budget that has a very significant £4.4bn hole in it. Having withdrawn his misguided plan to penalise disabled people, under pressure from Labour, Tory backbenchers and, for his own reasons, IDS, Osborne promised no more welfare cuts in this Parliament. He also said that he would tell us how he would fill the hole in November. What would your bank manager say if you told him you were going on a spending spree to line the pockets of your pals, and you would tell him how you were going to pay for it in November? Yeah, I thought so! Mind you, the £12bn of cuts to the welfare budget already passed by the Tories still stands.

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5 thoughts on “There are lies, damned lies and …

  1. “the biggest error was not knowing that tax is assessed where the income is paid, not where the payee lives.”.

    Pretty clear that someone doesn’t understand the system but it’s Jim O’Neill not Nicola Sturgeon. The Scottish Rate of Income Tax (SRIT) is assessed on where the payee lives not where the income is paid. If you live in Scotland you should have had a letter from HMRC by now explaining this to you, if not you may want to contact them.

  2. Jim, your maths is mince. 45% of those who voted in the referendum voted yes. 39% of the total survey sample said they support independence. Part of the sample were “don’t knows”. Next time try comparing like with like,

  3. A couple of obvious points.
    Scottish Labour has opposed Trident ( by conference decision) for many years, though Scottish Labour MPs totally ignored this.
    Secondly, this is by far the biggest Social Attitudes % for independence yet so rather than sneer at its arthimatic, Jim should worry instead.
    If I remember correctly there was a majority in favour of Holyrood determining most or all issues.
    I suspect that many who favour this option realise that Holyrood will never gain this power from Westminster ( under any party), so would prefer independence than the status quo.

  4. If Labour are the progressive tax party, why is the top income tax rate under the Tories 5p higher than it was for over 99% of Labour’s last 13-year period in power?

  5. One of the biggest problems is the non-devolution of tax on savings and dividends. That is a bigger problem that people potentially moving to England, because as mentioned above, SRIT is based on residence. And there will be checks to establish your main residence, especially for high earners.

    Although connected to income, the Tories held dividend tax back for a good reason. To protect their supporters in Scotland.
    This is something Labour could propose at a UK level in the future with further devolution in this area. Then the nats would have no excuse.

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