Tax debate wearing thin

The national accounts are out and there’s the annual argument about whether Scotland is rich or poor. The real debate is how long can we pretend our low-tax regime is helping people escape poverty.

We are poor if you are a unionist and believe that Scotland needs to spend £70 billion per year while only raising £58bn.

However, we are rich if you figure an income of £58bn is plenty for a country our size, and only spend that amount in the event of independence.

The stupid row which circles the Government Expenditure and Revenue Scotland (GERS) figures like a demented moth to a flame is because unionists know what is spent day to day while the SNP refuse to get into details on what might happen if Scotland were sovereign.

Notional figures

The SNP’s refusal to show a possible budget for year one of independence has held up Scottish political debate for 25 years, denied the separatists a victory in 2014 and is a disservice to every nationalist who wants to progress the case.

Andrew Wilson was told by the party to come up with some notional figures in his Growth Commission but they were so frightening to the SNP leadership they buried the report.

The only alarming thing about that is it reveals many in the party HQ really thought the numbers were different and Scotland was richer – demonstrating a profound confusion at the heart of the movement.

There are two important questions that arise from GERS.

The first is what kind of country can you afford with £58bn per annum?

I’d say a pretty good one – it covers all our NHS, education and social welfare spending with a bit to spare.

The second question is why do we have abnormally high spending on social welfare, £23bn and counting?

We know the causes of this, to a degree, are post-industrial decline and destructive social habits.

You can tackle these causes by increasing economic growth and hoping everyone gets a satisfying job, can afford a nice home and will give up the bevvy – this is the orthodox rightwing economic approach.

The other way to tackle it is to invest in our people, to spend even more on housing, education and health in the hope we rid ourselves of the “Scottish problem” of permanent poverty.

The Scottish Government responded to the GERS figures by talking about improved growth, confirming what we already know – the SNP are firmly on the neoliberal side of the argument.

Social justice?

We have 10 years of evidence the SNP like to hint at social justice but cling to low taxes and magical growth as the means to achieve this social revolution.

Their record in office is one of beige conformism to the neoliberal banality of low taxes equals growing economies (despite Scotland’s economy having the dynamism of a malnourished sloth).

Which is why the latest tax survey for the Scottish Government is interesting.

Ken Barclay, a career banker, reported on business rates. They are levied by local government on businesses based on the value of the property they operate from.

Barclay thinks some businesses exempt from full business rates should be brought into line and made to pay the full whack, such as private schools.

While posh schools should have to pay full rates and are patently not charities, pointing this out to the media ensured his report sounded radical.

In reality, it is yet more low-tax, fingers-crossed conformism.

The 30 recommendations in the report would result in the Scottish Government raising less tax than before. Barclay’s own figures suggest a reduction of £6m in revenue in 2021-22.

What he proposes to raise by taxing false charities he promptly gives away again, and more in new incentives to businesses.

In other words, this just shifts obligations around.

In fairness, that is what the Government asked for. The remit was: “To make recommendations… to better support business growth and long term investment and reflect changing marketplaces, whilst still retaining the same level of income to deliver local services upon which businesses rely.”

Moving numbers

The public just spent money on a report which did no more than move the numbers around, perhaps to spare the finance minister from the effort and political cost of suggesting the same.

We cannot blame Barclay and his team for following the remit but we can question why the SNP, having failed so emphatically at growth, are still chasing that goal and not simply raising taxes to EU level, in order to invest in people.

We can also ask why the Scottish Government commissioned this report, and not the one recommended by the Commission on Local Tax Reform (which reported in 2015) which called for “significant further analysis” into other forms of tax.

We are a nation which taxes less than other developed societies, while suffering chronic social deprivation.

Our existential issue is not can we afford independence, it is can we afford to let our people die young in poor houses with no jobs and still pretend low taxes will fix the problem?

We have 10 years of evidence the SNP like to hint at social justice but cling to low taxes

The publishing of the national accounts have opened by debate as to whether Scotland is rich or poor.