Budgets

How to break an investment bank

/ Dr Craig Dalzell / Leave a comment

“You may well ask: when the bubble finally burst, why did we not let the bankers crash and burn? Why weren’t they held accountable for their absurd debts? – Yanis Varoufakis

This blog post previously appeared in Common Weal’s weekly magazine. Sign up to our Daily Briefing and Weekly Magazine newsletters here.

If you’d like to support my work for Common Weal or support me and this blog directly, see my donation page here.

A broken piggy bank spilling coins onto a white surface.

The Scottish National Investment Bank is back in the news this week with its annual accounts showing that annual losses have been mounting again. A series of high profile failures of companies that it was exposed to (such EV charging infrastructure company Trojan, the laser company I used to work at M Squared Lasers, and satellite company Orbex) have contributed to an annual loss of £138 million and the fifth consecutive year of losses for the state-owned company. There are serious questions looming over the survival of the bank if many more of these losses undermine its financial foundations.

This is really bitter news for us at Common Weal as SNIB is very much our baby. We were the ones who first made the case for patient investment financing in Scotland and we were the ones who wrote the first comprehensive blueprint for how the bank could operate. We were also the ones who led the campaign for the bank against opposition from the Scottish Government that was so firm that we redesigned the way we fight political campaigns to get it pushed through.

We were, of course, cut out of a lot of the development work after that point. We responded the consultations and we attended the parliamentary evidence sessions but the SNIB that came out the other end of the whole process did so with substantial deviations from our original blueprint. We believe that those deviations are at the heart of why the bank is in trouble today.

One of the first big changes was to the governance structure of the bank. We envisaged a tripartite structure. The first would be the actual governors of the bank who would manage the day-to-day operations. The second would be Scottish Government Ministers who would own the bank, would be the people the governors reported to for reasons of democratic accountability and who would set the Missions that the bank would have to meet with its investments.

The third would be an Advisory Council made up of trade unionists, industry specialists, staff representatives, members of non-government political parties and other civic representatives who would monitor progress towards the Missions and would recommend changes to them if required. The stakeholders would also be able to make recommendations about the level of funding the SNIB was receiving from Government and about how much the SNIB could loan out at any one time.

The change came with the third part, the Advisory Council. Essentially, the Government didn’t want anyone other than themselves to be able to tell the bank what to do so when the SNIB was founded, the Council was dropped entirely as a part of the governance model. After several years of our campaigning, Government eventually relented and set up a Ministerial Advisory Group but ensured that it couldn’t talk to the bank directly – it would report only to Ministers.

It took years again for the Board to be formally launched at the tail end of 2024. It has met together only five times since, the last time being in February of this year. It’s also worth noting that Common Weal was not invited to join the Advisory Board.

The second change came in the Missions. The Missions of the Bank, as developed by Ministers without the guidance of an Advisory Council, are brief, vague and don’t have specific targets associated with them and some seem to run contrary to the bank’s core purpose of patient, long-term finance. This is particularly true with their Innovation mission that drives so much of their funding.

The problem with the bank’s focus on start-ups is that they are hugely risky. You can’t pick winners without also picking losers and so losses have to be expected. The bank shouldn’t be getting attention for seeing some of its investments not pay off but because those failures are risking the integrity of the bank. This is the most important change that the government made to the bank that deviated from our blueprint and it’s the one that may well cause it to fail.

We recognised the risks of this kind of lending and so our plan was to ensure that the bank could afford to fail. We said that there should be three tiers of lending in the bank.

The first should be in social housing. This is extremely long term funding, not expected to make a profit for the bank for decades, but it would do much for the fundamentals of the Scottish economy and for the bank itself. In our paper Good Houses For All, we called for the SNIB to fund essentially unlimited social housing on a demand-led basis and in a way that would disrupt and outcompete the rest of the housing sector on both quality on price (meaning that developers of private rented and private owned houses would have to up their game to keep sales).

There are other ways to fund this kind of housing – like Local Authorities borrowing from the Public Works Loan Board – and these can and should be used too, but a Mission for the bank should have been to receive enough rental income from its share of social housing investments that it could cover all of its day-to-day running costs. The bank would never be able to go bankrupt so long as people in Scotland needed a roof over their heads.

“As it stands, the bank is just about “all-in” on tech and has invested little in energy and essentially nothing in social housing.”

The second tier of funding would be into public energy. This is more capital intensive than housing and it’s a bit riskier, but investing in public-owned or community-owned energy would also bring in larger returns than housing. The goal of this tier would be to bring in enough relatively stable revenue to expand the bank as well as to reshape the Scottish economy to bring down energy costs and free up our own money to be used elsewhere (not only has growth in our wages stagnated in recent decades, the share of our household income that is being absorbed by housing and energy costs is rising, meaning we have less to spend elsewhere even if our wages are keeping up with inflation).

Only at the third tier of funding should we be looking at investing in the innovative tech sector. This is important for the future of the Scottish economy but the bank must be resilient if some or even all of these investments fail. It wouldn’t be so bad if the “investment” mission was linked to the Scottish Government’s industrial and economic strategy but because we don’t even have one of those, the bank is effectively just taking random punts based on potential short term gains or which ever company can charm them with the juiciest story about their cut of the “next big” tech IP (this is probably how my former laser company got their money, their pitch at the time would have involved words like “laser”, “space-based”, “quantum” and “nanotechnology”).

As it stands, the bank is just about “all-in” on tech and has invested little in energy and essentially nothing in social housing. It doesn’t look like a patient finance investment bank. It looks like a business accelerator fund with less of an idea of what it wants to be than, say, Scottish Enterprise which is essentially being forced to compete with a SNIB that appears to be actively working against them. Without the energy and housing tiers supporting the fundamentals of the bank’s portfolio, it might only take a few more high profile tech sector collapses (perhaps due to the AI data centre bubble popping) to bring it down entirely.

The truth is that the Scottish Government never believed in the potential of the Scottish National Investment Bank. They formed it because they were pushed into a corner by our successful campaign but that didn’t mean that they were forced to make the bank become a success. So instead of following the vision given to them, they designed the bank to be captured by the same banking elite that caused the problems in our investment landscape that the bank was supposed to solve.

This could be fixed before the next big crash. It’ll involve redeveloping the Advisory Board to let it do its job, revamping the missions along the lines we’ve suggested here and probably replacing a good chunk of the governance board of the bank where those currently in can’t or won’t adapt to the changes demanded. The bank has to re-focus its investments to secure its own foundations through housing and give itself a stable expansion platform through energy. Once and only once this has happened can it start aligning itself to Ministerial investment strategy and resume investing in the industries that would take us towards those objectives.

We’ve never complained that the bank is investing in things that might fail. Failure is inevitable in investments. The bank should be resilient in the face of those failures. It should be a bank not chasing headlines due to its annual statements but focused on what it will help Scotland become in the next decade or even in the next century. Failure in investments is inevitable. The failure of the Scottish National Investment Bank should not be.

The Common Green logo Green text on a dark green background, above a version of the Common Weal "balance" logo.

What Scotland can learn from the world’s first UBI

/ Dr Craig Dalzell / Leave a comment

“In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of.” – Confucius

This blog post previously appeared in The National, for which I received a commission.
If you’d like to support my work for Common Weal or support me and this blog directly, see my donation policy page here.

(Image Source: Wikimedia)

I like to say that in politics everything seems impossible right up until the moment it becomes inevitable. What this means is that in hindsight, it’s easy to see how something happened even though the campaign had to fight through a mire of “it’ll never happen” almost all the way.

Few campaigns exemplify this maxim for me better than the campaign I’ve been a part of for more than a decade for Scotland to introduce a Universal Basic Income. What began as a campaign so outlandish and so seemingly utopian that we may as well have promised the Moon and the stars has reached the point where, in theory at least, there is currently a Parliamentary majority in favour of the principle of a UBI (The SNP, Greens and Lib Dems all support one in principle and Scottish Labour supports the weaker idea of a Minimum Income Guarantee though I do not believe they’d vote against a UBI if it came to it), even if the barriers to actually implementing one largely prevent it from happening quite yet (barriers largely within the power of the UK Government to remove…we’ll come back to that in a bit).

But still, elsewhere in the world, the impossible truly has become inevitable. This year, a news story happened that has been covered extensively outwith the West and Global North but which you almost certainly haven’t heard about. In November, the Marshall Islands became the world’s first UN Member Nation to announce the implementation of a full Universal Basic Income.

It’s still not “a lot”, even for the local economy, but it will be enough to make a meaningful difference. The UBI is set at 200 US dollars per quarter plus a system of additional rates for people who live in the more outlying islands in the state as well as for retirees, people with disabilities and others who qualify for a top up. It is expected that the system will have a gross cost around 8% of the state’s GDP for the foundational UBI. The payment can be made in the form of paper cheque, direct bank transfer or via cryptocurrency – the latter garnering some attention in crypto circles despite only a dozen or so people opting for this method of payment.

The UBI is largely being funded externally. The Marshall Islands are a sovereign state that is in a “free compact” with the USA – the UK equivalent would be something like an Overseas Territory like the Falkland Islands, albeit with more power over foreign affairs than the UK allows its former colonies – and the bulk of the money will draw from a trust fund set up by the US as part-compensation for the damage wrought by nuclear weapons testing.

We don’t (yet?) have a wealth fund like that but let’s consider what a UBI could look like if Scotland followed the example of the Marshall Islands.

At 8% of GDP, Scotland’s UBI would translate to around £3,200 per person per year or about £60 per week. This is around half of the maximum amount of Universal Credit so it probably strains the definition of “basic” at this level. And yet, we’ve seen in Scotland that even smaller payments, like the £27/week Scottish Child Payment, has already made a massive difference to those who receive it.

The gross cost of an 8% of GDP Scottish UBI would be £40 billion per year or about a third of the total Scottish public sector expenditure budget. But this is misleading on the face of it for the same reason that it would be misleading to judge the Marshall Islands’ UBI on its gross cost.

In Scotland’s case, the implementation of a UBI would require an overhaul of existing social securities. An independent Scotland would be free, of course, to design the system from the ground up but a devolved Scotland would have to renegotiate the Block Grant and devolved Fiscal Framework with the UK Government so that the UBI could part-replace Universal Credit or the state pension without being unfairly clawed back (the failure to agree this scuppered plans for a Scottish UBI pilot scheme a few years ago). Transferring, say, a third of the existing social protection budget into the UBI would reduce the gross cost by around £11 billion.

And then there’s the Scottish tax system. The principle of universality underlying a UBI states that it’s much easier to ensure that no-one who needs it doesn’t get it and that no-one who doesn’t qualify for it doesn’t cheat the system if everyone gets it unconditionally – from the poorest to the richest. Of course, those who “don’t need it” can simply have their total income tax increased to tax it back off them. A simple way of doing it would be to set a line – perhaps at the UK Minimum Income Standard level of around £31,000 per year for a single person with no children – and tax the UBI back off those who earn more. As this would cover around half of Scottish income tax payers – 1.5 million people – this would reduce the gross cost again by another £5 billion or so.

We could close the gap further by making the tax progressive and by targeting wealth as well as income via a land tax and reformed property taxation so that those who earn and own much more than most of us could “pay for” the UBI of several people.

As people spend their UBI, they will pay VAT and companies that receive extra custom due to people being able to afford to buy things will pay corporation taxes (both are currently reserved taxes and therefore raising complications around fiscal transfers under devolution). We could also look at using devolved taxation powers to target Scotland’s keystone exports of energy, whisky and salmon (sectors which are highly foreign-owned and therefore also export their profits from Scotland, contributing to a loss of more than £10 billion per year from Scotland).

Taking these into account reduces the total actual bill for a Scottish UBI from “impossible” to a scheme that starts to look just about possible even under devolution (so long as Westminster abstains from its effective veto over implementation). But there’s one final aspect of a UBI to consider. The cost of poverty within the current system.

If we consider the cost of healthcare resulting from poverty-related conditions, the loss of productivity from poverty (the chronic stress of poverty makes for less productive workers and blocks the ability to take risks such as entrepreneurship), the cost of delivering expensive services such as crisis care for homeless people rather than simply making affordable housing a human right, the additional costs of administering “means-tested” social securities which sometimes exceeds the cost of the benefits being withheld because the punitive nature of the system is part of the point.

This kind of poverty may well be more expensive than the overall net cost of a UBI sufficient to eliminate it. At this point, we see that a UBI isn’t an impossible utopian dream, but becomes a moral imperative that must happen if we are to continue to call ourselves a civilised nation.

The Marshall Islands have proven that the impossible can become inevitable. I look forward to the day that Scotland inevitably does the same.

The Scottish Government wants to avoid reforming Council Tax

/ Dr Craig Dalzell / Leave a comment

“I hate paying taxes. But I love the civilization they give me” – Oliver Wendell. Holmes

This blog post previously appeared in Common Weal’s weekly newsletter. Sign up for the newsletter here.

If you’d like to support my work for Common Weal or support me and this blog directly, see my donation policy page here.

A stock photo of a street in Glasgow emphasising a row of above-shop flats

Image Source: Unsplash

In the run up to the 2021 Scottish Parliamentary Elections, the SNP published their election manifesto with a promise to hold in depth discussions about reforming local taxation, culminating in a Citizens’ Assembly on the subject. After they were returned to Government, they embedded that idea in the 2021 Programme for Government and explicitly elevated the idea that Council Tax reform would be part of this discussion from an idea to an promise.

I remember this being an exciting time in Scottish politics. I was still riding the high from being an expert witness in the Scottish Climate Assembly (and didn’t yet know how badly the Government would let them down). After multiple years of failure to reform or replace one of Scotland’s most badly broken taxes, this was finally a change for politicians to admit that they were part of the problem, to step out of the way and to let citizens tell them what to do instead.

It was never going to be that simple. Despite the success of the Climate Assembly to produce radical ideas – or because of that success in the face of the politicians’ unwillingness to relinquish power and implement those ideas – the promise of a Citizens’ Assembly before the 2026 election dragged on. It was never formally dropped, but Nicola Sturgeon’s Government did not appear to take any action towards setting it up.

When she resigned in 2023, time was tight for the Humza Yousaf Government to pick up the policy. One lesson from the Climate Assembly was that they can take a year to plan, several months to undertake and then a year to properly analyse the results. By his tenure, there was still time to create the Assembly but he’d be passing the job of actually reforming Council Tax to the next Parliament.

And then he, too, resigned. Without once to my knowledge even mentioning the Assembly and not doing much at all to reform local tax by other means (other than his disastrous ad hoc announcement of a freeze to rates during a local government revenue crisis).

And now, in the waning days of the Parliament and with zero time to implement anything new at all, John Swinney’s Government still hasn’t formally cancelled that 2021 manifesto promise but they have clearly decided that they’ll break it.

Instead of a Citizens’ Assembly, his Government has put out a very standard public consultation on some options that they’ve considered around reforming Council Tax while also stating that even if they accept one of them after next year’s election that we shouldn’t expect any actual change to the tax any time within even the next Parliament. We’ll submit our formal response to that consultation and you can too here, but I wanted to use my column this week to discuss their proposed options.

The first thing to say is that they’ve effectively ruled out replacing Council Tax entirely.

The Scottish Government has presented four proposals for reform of Council Tax. This first is the most minimal change possible, though it’s one that has been advocated for as long overdue. The current Council Tax isn’t based on what your house is worth now but what it was worth in 1991. Keeping the current rates and bands but revaluing houses to ensure they are all in the correct and appropriate band would fix problems that have crept in over 30 years of rampant but uneven house price speculation (I’ve seen houses worth £30,000 and worth £300,000 both marked as Band D for Council Tax).

This has been designed to be “revenue neutral” with the current system and as such doesn’t do much to cut taxes for people already in appropriate and low bands or to raise taxes for those appropriately in high bands. It does fix the problem of possibly half of Scotland being in the wrong tax band but this effectively means a lot of upheaval to the system for comparatively little actual gain – even where that gain is necessary.

Two intermediate steps are to change the current 8 Band system to a 12 Band system with one aimed at keeping taxes more or less the same for folk in lower band houses and adding addition bands for the extremely wealthy at the top and the other being more “progressive” by reducing tax rates slightly for lower bands and and increasing it for upper bands.

And finally, there is a 14 band system that looks much like the 12 band “progressive” proposal but with a slightly greater cut for lower bands and a slightly higher increase for upper bands.

The problem with all of these proposals is that the banding system for Council Tax is inherently unfair. Not just in its present form where a house worth 10 or 100 times more than a cheap, Band A house will still only pay about 3.5 times more in Council Tax, but even if the bands were reformed or extended as the Government has proposed here, that problem will always exist.

The very rich who live in houses in the top band will always pay less than their fair share of tax and that means that those in the poorest households will always pay more than their fair share. Even the 14 band system would only apply a maximum differential rate of about eight times as much Council Tax for a house sitting near the bottom of the highest band (starting at £1.83 million) compared to one sitting at the top of the lowest band (£65,000).

This means that a house worth more than 28 times another will only pay about eight times as much tax. What the Government is claiming is a more progressive tax proposal than the current system is still nonetheless deeply regressive and its claim of being “revenue neutral” still means, in effect, the poor are paying a massive tax subsidy to the rich.

“Nine out of ten houses in Scotland are worth less than £400,000.”

Instead, we argue for a proportionate Property Tax similar to the one used in many countries in Europe where the property tax is based on a percentage of the current value of the house – doing away with bands entirely (One could argue to make things even more proportional and add surcharges on very expensive houses in the same way that we don’t pay a flat income tax rate but a progressive one based on how high our salary is – but let’s make the case for a flat percentage tax first, then we can discuss going further). This removes the inherent problem of banding. A house worth ten times as much will always pay ten times as much tax.

One of the arguments against property taxation as opposed to taxing income is the “ability to pay”. It’s often held up that there will be asset rich, income poor people stereotyped as a lonely widow living in her mansion after the kids leave the family home. The truth is that while I’m sure that there will be people in a situation like that, there are better mitigations available than holding the rest of the country back from reforming and replacing an outdated tax system.

The consultation document itself considers a couple of these such as phasing in the tax over several years to make it easier for people to adjust their finances to copy with any increases or allowing people to defer the tax for several years – perhaps until the sale of the house or the death of the owner, though this may result in people having to face a large lump sum tax bill when that time comes.

Another option, one that we may suggest in our response, might be to limit the increase someone pays due to the transition to some percentage of their income or to expand Council Tax discounts to cover people in that situation. Over time though, this would become less of a problem. House prices in general will adjust to reflect their tax bill and houses that are currently overvalued may reduce in price as a result of a high tax burden attached to them (something that wouldn’t happen if we abolished property taxes for a local income tax as some have suggested).

A final point to make in this column is the fact that people don’t really understand just how unequal property wealth actually is in Scotland. This can be seen in the Daily Express’s claim that the Scottish Government’s proposal would mean a tax of up to £6,600 on “hard working families”, without mentioning that this is what would be paid only in the biggest change proposed (the 14 band system) and this rate would only apply to the most expensive houses worth more than £1.83 million.

Very few “hard working families” in Scotland live in £1.8 million houses. In fact, thanks to this consultation, we now know how many households live in worth £1.83 million or more. This band would cover just 0.02% of houses in Scotland – fewer than 15,000 out of Scotland’s more than 2.6 million homes.

In fact, as you can see in our Graph of the Week this week, we can plot the various government proposals (in this case we’ve just plotted the most and least progressive of the four) in comparison to how much more or less people would pay in Council Tax compared to a fair Property Tax. If we moved to our Property Tax then a small house in Band A could see its tax bill halve, while a £2 million mansion would see a substantial increase of £6,000 or more. The “breakeven” point between the current Council Tax (and, in fact, all four of the Government’s proposed reforms) is a house worth £400,000 that is or should be in Band F.

This threshold is at about the 90% percentile of house prices. Nine out of ten houses in Scotland are worth less than £400,000. That means that nine out of ten households in Scotland are currently paying more than their fair share of Council Tax and would benefit from a fair percentage based Property Tax. It also means that all four of the Government’s proposed Council Tax reforms would tweak but would not remove this inequality.

The Scottish Government is, in effect, continuing to protect Scotland’s top 10% of property owners at the expense of everybody else. This is a key lesson that we will be including in our response to the consultation and I hope you will too.

The Council Tax is outdated, unfair and needs to change. The argument of that fact was won more than a quarter of a century ago. That the Government accepts the need for a progressive and fair tax but still cannot bring itself to propose one is a dereliction of duty. That they’ve broken a manifesto commitment to let the people come up with a solution instead is a democratic scandal.

And that they’ve stated that even if they win the next election, they’re not going to implement the solution in the next Parliament just means that this consultation looks like it’s much more about delaying change for another decade rather than righting the wrongs of the lack of change so far.

We can do better than this, especially when the solutions are already clear and understandable. Please submit a response to this consultation and do make clear to your local MSPs that you want to see Council Tax fixed properly, fairly and for the ultimate benefit of All of Us.

The Only Way To Fix Council Tax

/ Dr Craig Dalzell / Leave a comment

“When it comes to decreasing inequalities of wealth for good or reducing unusually high levels of public debt, a progressive tax on capital is generally a better tool than inflation.” – Thomas Piketty

This blog post previously appeared in Common Weal’s weekly newsletter. Sign up for the newsletter here.

If you’d like to support my work for Common Weal or support me and this blog directly, see my donate page here.

In the run up to the 2021 Scottish Parliamentary Election, the SNP – like most other political parties, published their manifesto of the things they promised to do if returned to power after the election. They’ve since deleted it from their website but it has been archived here. In that, one of their promises to the voters who put them back into office stated that they would run annual Citizens’ Assemblies during this Parliamentary term “to help find consensus on issues where people have sharply divided opinions…such as such as reform of Council Tax.” Making that issue in particular more than a mere suggestion, a few pages later they stated clearly that “We are committed to reforming the Council Tax to make it fairer…We will ask a Citizens’ Assembly to consider the way forward alongside the question of wider powers for local government.”

After the election and their return to Government, they held one Citizens’ Assembly on Climate Change (the process of which showed an outstanding example of the future of democratic governance but the outcome of which was a single new policy promise, later broken) but didn’t hold any others. The Citizens’ Assembly on Council Tax Reform was never formally cancelled, but no effort or resource was ever put in to organising it. There is now no time to hold such an assembly before the end of the Parliamentary Term and no ability to even throw one together at the last minute given that neither the Programme for Government nor the final budget covering a full year of the remaining term mentioned such an Assembly.

This week, the Government published their proposal for a replacement to this manifesto promise. A series of “public engagements” this Autumn consisting of three key elements:
• A formal public consultation process.
• A number of public events or ‘town hall’ meetings held over the autumn months, ensuring a reasonable geographical spread and diversity.
• A set of focused discussions with key stakeholders and experts.

This strikes me as remarkably similar to their “engagement” series on land reform in 2022 where the “town hall meetings” included gathering a dozen or so members of the public into a hall named for one of Scotland’s largest landowners to tell them that they were going to try to limit the scope of the land reform bill to only cover the management of the very largest estates in Scotland so that they could keep the costs of the reform to a minimum. They’ve since reduced the threshold of that management in the proposals for the current Bill but it is still far too high, far too limited and far too easy to evade.

This is a column about that Council Tax reform though – I’ll happily come back to Land Reform in a future column.

To say I have little faith in the SNP (or any other political party in Scotland right now) actually making meaningful steps towards reforming this badly outdated tax would be an understatement but we are an impartial think-tank and we are very much one of the “key stakeholders and experts” who should be at the table later this year (I’ll let you know if we get an invite) so fine – I’ll once again lay out the options for reform and explain why the only possible rational option is to adopt our policy paper on replacing Council Tax with a Property Tax based on the present value of a home.

Continue reading →

Scottish Budget 2024 – Still Spinning Plates

/ Dr Craig Dalzell / Leave a comment

“Our economic models are projections and arrows when they should be circles.” – Wade Davis

This blog post previously appeared in Common Weal’s weekly newsletter. Sign up for the newsletter here.

If you’d like to support my work for Common Weal or support me and this blog directly, see my donate page here.

image_2024-12-12_094119113

Finance Secretary Shona Robison must have breathed a sigh of relief at the UK budget the other month (covered by me here) but if she did, it was the shallowest one she could get away with. The extra money from the UK that has gone into this year’s Scottish Budget has largely been accounted for in terms of public sector pay deals and reserved tax rises applied to those wages (not that I’m complaining about those pay deals – quite the contrary, even with them many public sector works are still lagging behind fair pay after over a decade and a half of austerity) or has gone into replacing cuts from last year’s budget so it’s clear that despite the relative expansion to Scottish finances there still wasn’t going to be a huge amount of play in the figures to do much more than work a little less hard to keep all of the plates spinning in the air.

Continue reading →

UK Budget Review – 2024

/ Dr Craig Dalzell / Leave a comment

“Death, taxes and childbirth! There’s never any convenient time for any of them.” – Margaret Mitchell

This blog post previously appeared in The National, for which I received a commission.
You can read my donations and support policy here and if you’d like to throw me a wee tip to support this blog, you can here.

image_2024-11-06_110201644

The first budget of the new Labour Government and the first in 14 years is one that would have been more hotly anticipated if it wasn’t for the fact that the Government leaked so much of it to the media ahead of time – in direct contravention of Parliamentary procedure and in a way that would have seen Ministers resign not many years ago – and would have seen Labour complain about had they still been in Opposition. The Speaker rebuked them thoroughly, but – of course – lacks the power to actually sanction anyone involved (in Holyrood, the Presiding Officer could have technically cancelled the budget speech but even when the Scottish Government has leaked material like this, they’ve managed to stay on the side of a mere threat).

Nevertheless, the budget was delivered and it’s worth us taking a look at just a few of the things that happened that will affect Scotland.

Continue reading →

PfG 2024 – Serving Scotland

/ Dr Craig Dalzell / Leave a comment

“When the dispute over the Means Test was in progress there was a disgusting public wrangle about the minimum weekly sum on which a human being could keep alive.” – George Orwell

This blog post previously appeared in Common Weal’s weekly newsletter. Sign up for the newsletter here.

image_2024-09-10_091756759

Serving Scotland, what exactly?

The Scottish Government’s latest Programme for Government, titled “Serving Scotland”, is little more than a list of platitudes covering some of the most brutal public service cuts in years coupled with a paring back of all sense of ambition in what should be a critical year of laying groundwork for the next election (if you take a short-termist political party view of things) or the rapid ramping up of actions to halt and mitigate climate change (if you’d prefer there to be a liveable biosphere in the next couple of generations).

The PfG is divided into four of the Government’s overarching strategies so it’s worth picking them apart one by one.

Continue reading →

It’s Time To Tax Scottish Land

/ Dr Craig Dalzell / Leave a comment

“All I wish to make clear is that, without any increase in population, the progress of invention constantly tends to give a larger proportion of the produce to the owners of land, and a smaller and smaller proportion to labor and capital.” – Henry George

This blog post previously appeared in The National as part of Common Weal’s In Common newsletter.
If you’d like to throw me a wee tip to support this blog, you can here.

image_2024-09-09_204513798

Last week, I had the pleasure to address SNP members at the Revive Coalition’s fringe meeting on land reform where I presented Common Weal’s proposal to bring a land tax to Scotland. As the meeting wasn’t filmed, I want to discuss the issue here for the benefit of members (and non-members) who couldn’t be there. I am also delighted that after our fringe, members gave overwhelming support to two motions that would enable such a tax. Taxing land in Scotland is now solidly SNP policy and the Scottish Government should bring forward a Bill to enable it at the earliest opportunity. With the Scottish Government pledging to bring in fresh cuts of in excess of £500 million, to ignore a tool that would almost entirely avoid the need for them is simply unacceptable.

Continue reading →

GDP Growth Is The Problem, Not The Solution

/ Dr Craig Dalzell / 3 Comments

“No society can surely be flourishing and happy of which by far the greater part of the numbers are poor and miserable. ” – Adam Smith

This blog post previously appeared in The National, for which I received a commission.

image_2024-08-29_102618230

(Image Source: Unsplash)

Ahead of the reopening of the UK Parliament next week, Prime Minister Keir Starmer painted a bleak picture of a broken Britain that he plans to break further so that he can mend it in the service of his “number one priority”, GDP growth and “wealth creation”. He’s going to ask us to accept “short term pain, for long term good”.

If that sounds like a promise you’ve heard before then you are, like me, old enough to remember George Osborne making a very similar promise in 2010 when he kicked off the decade and a half of Conservative Austerity that we’ve endured ever since.

The big difference between then and now, of course, is that more Labour pain is coming on top of that previous Conservative pain so it’s little wonder that many are asking how much more we need to bear.
There were very few actual policies – and fewer new ones – in Starmer’s speech and those that were there are doing a lot more heavy lifting than he’s likely to let on. GB Energy, which he mentioned several times, is going to be miniscule. With only £8 billion worth of funding, it wouldn’t be big enough to renationalise the energy sector enough to make a difference. It might be one of the best public energy schemes the UK has seen since the Scottish Government dropped their plans for a public energy company, but it’s almost being deliberately designed to NOT disrupt the energy market that has been largely responsible for the inflation and cost of living crises of the past few years.

If Starmer wants to actually get to the root of the problem, to actually plan long term for the benefit of the UK and everyone who lives here then he needs to understand that a good chunk of that root is, in fact, his number one priority – chasing after GDP growth and “wealth creation”. GDP has been growing for decades without solving our economic problems so we need to ask if it is the solution, how much more does it need to grow before it starts working?

It’s not the solution because whenever GDP growth has occurred, the benefits of its have almost always gone mostly to the already wealthy. It has also almost always resulted in more damage to the environment. A long-term beneficial economy is one that focuses on sustainability and wellbeing instead and regardless of growth. Britain needs fewer prisoners, not more prisons. Fewer shops and more libraries (a policy that would improve wellbeing while actively shrinking GDP). And we need fewer of us working to barely meet our needs while we enrich others, and more from the already rich using their ability to do more to make it all happen. A smarter man than myself said something similar once. I don’t think he’d be too welcome in Starmer’s Labour party these days. That, too, is probably part of the problem.

TCG Logo 2019

The Devolution Deficit

/ Dr Craig Dalzell / Leave a comment

“Humanity’s true moral test, its fundamental test…consists of its attitude towards those who are at its mercy” – Milan Kundera

This blog post previously appeared in Common Weal’s weekly newsletter. Sign up for the newsletter here.
If you’d like to throw me a wee tip to support this blog, you can here.

image_2024-07-31_145228020-1

Despite plenty of warning before the elections, new Chancellor Rachel Reeves has suddenly discovered a massive “hidden” black hole in the UK’s finances and she needs to make “difficult choices” to fix it. This is hardly to excuse the last 14 years of Conservative rule – it’s not as if they made a particular secret about their attempts to hollow the nation out for their own benefit – but as Robin has explained, political figures never seem to make “difficult choices” that would make things difficult for those who can afford it.

Continue reading →