Wednesday, 26 October 2011

When yes means yes

Over the past few days we've seen some comment on how a two question referendum in Scotland might work. People are asking what happens if devo max gets more yes votes than independence in such a ballot?

As the First Minister has made clear, the SNP will be campaigning full square for independence in the referendum. He is also open to including a question in the referendum on extending devolved responsibilities. And the Scottish Government has previously set out how this would work.

In the model proposed in the draft referendum bill in the last session, the choice would not be framed as an either/or. This is where the misunderstanding (or refusal to understand) arises.

Instead, the consultation paper sets out that voters would be asked, first, whether they want the Scottish Parliament to have responsibility for all matters except defence and foreign affairs. Then, they would be asked whether they want the additional powers that would take us to independence.

This is the same approach as in 1997. Scots were first asked whether they wanted a Scottish Parliament  with responsibility for health, education, justice etc. Then, as the second question, whether they - in addition - wanted that parliament to have tax-varying powers. The two options weren't competing.

So if there is a 2 question referendum on independence the approach, based on the 2010 consultation paper, would, in broad terms, be as follows. First, people are asked whether they want the parliament to have responsibility for the economy, welfare, energy etc (i.e. devo max). Then they are asked if they want the parliament - in addition - to have responsibility for the other policy areas that mean Scotland would become independent.

Going back to 1997, three-quarters of Scots voted for the Parliament and just less than two-thirds for the additional tax varying powers. On the argument being presented by the Lib Dems and others, this result should mean that because the 'parliament only' option had more votes than the 'parliament plus tax-varying powers' option then the 'parliament only' option won. That is patently nonsense.

I've heard some say that in the independence referendum the two options wouldn't be linked. If you look back at the draft bill, that's clearly not the case. And, given that many of these same people are describing the middle option as 'independence-lite', the obvious point is, you can't have it both ways.

Monday, 24 October 2011

Another Scotland Office boomerang

The Scotland Office has published information today on Scotland's budgetary position within the UK over the past 30 years.

The press release from Mr Moore is headlined: 'Scottish Government must explain £41 billion oil deficit'. The claim is that over the past 30 years total spending in Scotland (including our share of 'UK services' like defence and foreign relations) has been £41 billion higher than total revenues, including oil and gas revenues.

An impressive piece of politics you might think? Proof that Scotland is 'too poor, too small etc' to be independent. But no, this is the Scotland Office, and it is an attack that has quickly fallen flat on its face.

If you look at the equivalent UK figures, the total UK deficit is £715.5 billion - and Scotland's population share of this is some £60 billion.

So, under current arrangements as part of the UK, over the past 30 years, Scotland has accumulated a share of the UK deficit equal to £60 billion.

As an independent country, we would have accumulated, according to the Scotland Office's own figures, a deficit of £41 billion. That is £19 billion less debt than we currently have as part of the UK.

Put it another way, the UK has burdened each and every Scot with additional debt equivalent to £3,800.

Mr Moore's latest boomerang attack is relevant to the independence debate in two ways. First, looking backwards. He has confirmed that Scotland would have been better off as an independent country: £19 billion better off.

And second, looking forward. Because he has told us just how much Scotland has actually contributed to the UK national debt over the last 30 years, we can now work out what our share of that debt will be, and it isn't the £60 billion from our population share. Instead, Mr Moore has helpfully lopped £19 billion off the figure that an independent Scotland will inherit. That means, on independence, Scotland will have lower national debt and lower annual debt repayments than if we remain part of the UK.

Once again, the Scotland Office shoots and scores a spectacular own goal. It must be the most costly press release ever issued. Although future Scots will thank Mr Moore, because he has single-handedly saved an independent Scotland a rather handy £19,000,000,000. So all I can add is, keep up the good work!

Saturday, 22 October 2011

Looking forward to the FM's speech

It's the First Minister's speech to conference today and there is a real sense of anticipation among delegates and members here in Eden Court. There could be as many as five overspill rooms in the conference centre for those who can't get in to the 900 capacity main hall.

I've been doing a bit of reminiscing, thinking back to my first SNP conference in the early 90s in Rothesay, where we all easily fitted in to the community hall. The contest with today could hardly be greater.

There's also a book on sale at the Scots Independent stall that has on the front cover a picture of all the delegates at a conference in the 50s and on the back a picture of all our current MSPs, and there are more MSPs today than delegates back then.

The speech is divided into 3 main sections. The first focus is the economy, jobs and training, with some good announcements that will create new opportunities for thousands of Scots.

The second looks at the pressures on family budgets and particular the impact of rising fuel bills. Again, the FM will have something to say on help planned over the next year.

Finally, he will talk about the constitution, setting out why independence offers the greatest opportunity and benefit. It is the right of the people of Scotland to determine their future, a point the SNP understands, but which it is not yet clear the other parties fully comprehend.

Thursday, 20 October 2011

#SNP11

I will be missing the start of SNP conference this year - a conference that is set to be the biggest in the party's history, with some 1,200 delegates and 2,000 people attending. The gathering will contribute over £3 million to the local economy.

But I'll be following events through twitter, with the conference hashtag #SNP11.

The primary focus of conference will be jobs, the economy and the pressures on family budgets, especially soaring energy cost in a land of energy plenty.

Conference will begin with the First Minister visiting Nigg to announce a major new investment. This sets the tone for the weekend and will be the first of a series of announcements or initiatives designed to support recovery and build future economic strength. It contrasts sharply with the UK government’s decision to pull the plug on the Longannet carbon capture plant.

Energy will be a central focus, with two elements: renewables allowing us to create more jobs and re-industrialise Scotland, and the confirmation that oil and gas will flow for ‘many, many’ years to come (in the words of David Cameron). With billions flowing into the London Exchequer today and billions more to come, we should be able to invest this wealth in boosting our economy, supporting measures like carbon capture and also protecting people from fuel poverty.

The constitutional aspect will also be focused on creating jobs, controlling our energy wealth and maintaining growth and recovery. We'll be proudly stating that Scotland has the people, the resources and the ingenuity to flourish as an independent nation.

Our vision for this more successful future is underlined by our efforts on training and education: 25,000 MAs, a guarantee of a learning or training place for 16-19 year olds and university education kept free. It is demonstrated by our action on offshore renewables as we work to put Scotland at the forefront of marine renewable technology.

We also offer a different approach, based on a social contract with the people (measures such as the Council Tax freeze and the living wage). This reflects our social democratic ethos and the values that are a central part of Scottish society and contrasts with the approach being adopted elsewhere in the UK. Together, these two elements – economic and social – underpin the sort of nation we want Scotland to be and know Scotland can be.

The first part of conference will be focused on where we are already independent and our record of delivery and plans for education, health and justice. We will also be asking people to consider what more we could achieve if we also had economic and financial independence. This would give us the tools we need as a government and nation to boost jobs and economic growth – to continue with the successful Plan MacB which the UK government will not follow and now threatens with its cuts.

And we will also be pointing to the clear additional benefits that independence over all aspects of Scottish life will bring – the ability to speak with our own voice in the EU and make the right choices on issues like Trident, where with independence we could decide to invest the billions wasted on nuclear weapons on pensions and proper universal childcare provision instead.

Conference will kick off with a big thank you to the voters who gave us their support in May. This unprecedented mandate must be recognised by the UK government and throughout conference, we will be making clear the steps forward that are now expected as a result of this historic support.

The people spoke in May – it is now up to us to deliver and the UK government to listen and respond.

Friday, 7 October 2011

A double standard on tax?

A couple of weeks ago I wrote about the supposed "tax bombshell" in the Scottish Government's budget. At that time various papers, politicians and institutions suggested that a forecast increase in business rates revenue equated to an increase in business tax.

One such politician was 'Scottish' Secretary Michael Moore who thundered: "I am alarmed at the reaction that the Scottish Government’s Spending Review has provoked from the business community. In particular, I’m concerned at the fears expressed about the projected business rates and the significant risk that they could prove a major disincentive to new investment in Scotland. Scottish firms’ fears that they could be facing a damaging hike in business rates set by the Scottish Government must be addressed."

This got me to thinking, and to wondering what is happening to the business rates revenue controlled by Mr Moore's government? So I looked at the Office for Budget Responsibility's March 2011 Economic and Fiscal Outlook (table 4.7) to find that business rates revenue between 2010/11 and 2014/15 is set to increase by 25% - by Mr Moore's standard surely "a damaging hike in business rates"?

But of course, business rates aren't the only form of business tax. I remember CBI Scotland suggesting that what happens to business rates is an indication of what might happen to corporation tax, and so again I checked for Westminster's corporation tax increase. Over the same period, corporate tax revenues in the UK are set to go up by a massive 26% with a 39% rise anticipated for offshore (i.e. Scottish oil & gas) corporation tax revenues. By the same standard, surely also a Westminster business tax bombshell? But not a peep from CBI Scotland.

The original Centre for Public Policy for the Regions (CPPR) report on the Scottish budget got all its publicity by a double and treble counting of the anticipated extra business rates revenue. That got us the figure of £850 million for the so-called tax increase. So I decided to do the same for the UK, but this time, not just for the various taxes on business. How about working out the total tax increase proposed by the UK for businesses, families and individuals?

According to the UK government's official forecasters, the Office of Budget Responsibility, and on the exact same cumulative basis as generated all those lurid headlines about the Scottish budget just a few short weeks ago, up to 2014-15, under UK government plans, we will pay a massive £200 billion of extra tax. Not so much a tax bombshell, more of a tax tsunami.

But of course I know, and readers of this blog know, that a revenue increase is not the same as a tax increase. Indeed the increase in UK corporation tax receipts comes at a time when the corporation tax rate is set to fall by 1% each year. Further evidence, if it was needed, of the benefits of such a policy if corporation tax were devolved Scotland.

Sunday, 2 October 2011

Small is beautiful, efficient and effective

Former Scottish Government Permanent Secretary, Sir John Elvidge, is under attack today as part of the opposition political parties' attempts to criticise the work of the civil service here in Scotland.

The Sunday Express highlights a report written by Sir John, in a personal capacity and after he had retired, called Northern Exposure. The Express article is critical of Sir John for saying that the new structures of the civil service here in Scotland - based on an attempt to end policy silos and create a more joined up approach to government, both good things - are working well. The piece in the newspaper is also critical of Sir John's identification of, and praise for, the role of Scottish Government ministers in taking forward this process of reform and improvement.

I had intended writing a blog about Sir John's report in any case, regardless of today's press coverage, because I wanted to contrast the position here in Scotland, as set out by Sir John, with the position in Whitehall as set out by the Public Administration Committee in the House of Commons (in a report published within a few days of Sir John's report).

This is not a party political issue, or at least should not be. It is about good government, as the comments of former UK Labour minister, Lord Adonis, on Sir John's report demonstrate. Lord Adonis said: "[Sir John] also highlights the very radical change that he introduced as Permanent Secretary to the structure of Scottish government - an end to departments, a unified approach to government which was accompanied by a political decision by the incoming government to reduce the number of Ministers. As Whitehall goes through its major change programme, Ministers and officials would do well to reflect on the experiences John outlines."

The contrast is perhaps best illustrated through two quotes. First, here is Sir John on Scotland:

"Alongside a group of politicians who have embraced the challenge of forms of government unfamiliar to them, the Civil Service has also played a central role. As well as providing essential continuity of understanding about the processes of government, it has displayed agility and energy in assisting the adaptation of that understanding to fresh challenges."

And second, this is what Bernard Jenkins MP had to say about the equivalent Whitehall machine:

"As our report points out, we know that the Prime Minister's director of strategy and others at senior levels in the Government, are exasperated by the lack of progress and are apparently appalled by the 'custom and practice' of Whitehall and by the deadweight of inherited policy."

When Scotland's civil service is being described as agile and energetic, while the Whitehall system is characterised with words and phrases like 'exasperated' and 'lack of progress', is that not something that should make papers and politicians up here pause, and perhaps praise, rather than try to criticise?

And while, in the UK, the MPs' report found that "the centre of Government does not provide the necessary strategic leadership and a governance framework to enable departments to manage their change programmes", Sir John points out that:

"In partnership between Civil Service and political leadership, a radical Scottish model of government has developed since 2007, building on the learning from the earlier period of devolution. It is based on the effort to have government function as a single organisation, working towards a single defined government purpose based on outcomes, and establishing a partnership based on that purpose with the rest of the public sector which is capable of being joined by other parts of civil society. It rests on an ambitious conception of what is achievable through such a partnership between the public sector and civil society. It places strategic leadership and the facilitation of cooperation between organisations and sections of society at the heart of the role of central government, rather than a managerialist view of the relationship of central government to others."

And if you think the problems identified in Whitehall are new, just read Tony Blair's 'A Journey'. On page 205 he describes the civil service in the following terms:

"The problem with them, as I indicated at the beginning, is inertia. They tended to surrender, whether to vested interests, to the status quo or to the safest way to manage things - which all meant to do nothing."

As part of this blog, I try to get behind the words of the opposition politicians to try and understand their actual motivation. A generally good, effective and motivated Scottish Government team of civil servants is not good for their narrative, especially when contrasted with a cumbersome Whitehall machine. The opposition, today, are trying to persuade us that with independence or greater autonomy the machinery of government would be more costly - there wouldn't be the economies of scale that the Whitehall system supposedly provides. But the picture these insider accounts paint is very different. Whitehall is proving not to be good value. In the words of UK MPs and even a former UK Prime Minister, the system at the heart of UK government isn't working. Instead it is Scotland, with the advantages of size, short lines of communication and decision making, and the ability to create a responsive government, that is performing better.

We've known for a while that in terms of economics that Scotland is an optimum size to prosper and flourish. Now we are also seeing that Scotland is an optimum size to govern. Earlier this week the Guardian ran an opinion piece by Paul Kingsnorth called 'This economic collapse is a "crisis of bigness"'. In it he quotes Leopold Kohr, from his book 'The Breakdown of Nations: 'Bigness, predicted Kohr, could only lead to more bigness, for "whatever outgrows certain limits begins to suffer from the irrepressible problem of unmanageable proportions".'

That, it seems, from the analysis down south, is the problem for Whitehall. So if, over the next few weeks, you hear UK politicians trotting out figures for the supposed cost of running a Scottish welfare system or administering a Scottish tax system, know that their figures are based on their experience of a Whitehall machine that is cumbersome and complex. They will ignore the £300 million of extra efficiencies generated here in Scotland simply by making government work better, including making it more joined up. Take their attacks, as I know you will, with a pinch of salt, because as the evidence tells us, in the real world of government, Scotland can, does and will do things better.