It’s A Trap: A Response to The Smith Commission

imgFirstly, you can read the full Smith Commission report for yourself here.

I promised that I would not swear, nor say ‘I told you so’ when the time came to review the Smith Commission’s recommendations but the temptation to release some regretfully smug vituperation is hard to resist.

It has to be said that there are many positive powers which the Commission has recommended be devolved.   Most notably in respects to control over housing benefits policy, the setting of income tax rates and the power to award oil & gas extraction licenses is ti be devolved as well as the decision to recommend that the Scottish parliament’s permanence be enshrined in law and the franchise be extended to 16 & 17 year olds, should the Scottish parliament wish it.

However, the recommendations fall well short of any meaningful definition of ‘home rule’ or ‘devo max.’ This is largely due to the retention of National Insurance, Corporation Tax & Capital Gains tax by Westminster and the fact that while Scotland will retain income tax receipts from pay (not from dividends or savings) any gain that we receive from this will be deducted from the block grant so graciously awarded us via the Barnett Formula.

“The Scottish Government will receive all Income Tax paid by Scottish taxpayers on their non-savings and non-dividend income with a corresponding adjustment in the block grant received from the UK Government, in line with the funding principles set out in paragraph 95.”

So basically, we’ll get exactly as much money as we do now and all the tweaking the Scottish government do to our tax rates will not change that – so why charge higher tax if it will not increase the nation’s pot of money to spend on services, infrastructure, welfare etc?

Essentially, what has been recommended is a honey trap, where the Scottish parliament seemingly has the powers to enact sweeping social change but will be denied the financial muscle to do so, as if they raise income tax in Scotland, this will be offset by a reduction in the block grant, meaning the parliament has the same amount of money to enact policy, despite having raised taxes.

Therefore, in a few years time the Unionist parties can lambast the SNP for not having used their tax raising powers (as it would be pointless to do so) while Scotland’s public services and welfare state continues to be eroded by policy driven from Westminster leaving the SNP and entire concept of the Scottish parliament up for ridicule.

A truly ‘devo-max’ or Home Rule settlement would allow the Scottish parliament full control of tax receipts in this country, with a set % to be sent to the Union for administering things like the armed forces etc. (this would be the Federal option) rather than sending 70% of our taxes back to Westminster and it being decided at that remove how much of them we should have reinvested in Scotland.

It is also worth remembering that these are only the Smith Commission’s recommendations and it still needs to be passed by the government which is in place after the coming May’s election and whoever that government ends up being, they will be hostile to the interests of a devolved Scotland and unlikely to implement the recommendations in full, let alone expand upon them.

As it stands, the Smith Commission stands as a missed opportunity for meaningful constitutional change and while it does offer a range of encouraging devolved powers, with the power over oil & gas licenses particularly welcome in light of the clear and present threat posed by fracking, the truly meaningful power – control over and retention of taxation – has been withheld.

This remains a telling example of how the Unionist parties see Scotland – as a child to be indulged, to be told that they can spend their pocket money on what they want, they can even raise extra funds from a lemonade stand or by running errands but at the end of the day, the purse strings lie with the parent.

That’s not an equal union, it’s a subservient relationship and it’s not good enough.

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