We Need To Talk About: Local Taxation

December 6, 2015December 13, 2015 / Dr Craig Dalzell / 1 Comment

Source: Flickr

Next year brings in the Scottish Parliamentary Elections and with it comes the proposals from each of the parties on how best to use the limited powers that the Scottish Government will have at its disposal. No doubt, much of the news and comment will be around whether or not the (marginally) expanded powers over income tax coming in under the Scotland Bill 2012 will be used and by how much.

Our approach towards local taxation, however, will perhaps lead to a far more fundamental change to the fabric of our society. There is also far greater scope within the devolution powers to do something a bit more radical that simply raising or lowering the rate of tax by a penny or so (or repeatedly defending one’s reasons for not doing so). It is therefore important, before the campaigning season begins in earnest, to understand what our options are and the potential impacts of them.

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We Need To Talk About: Budget Underspends

October 2, 2015October 3, 2015 / Dr Craig Dalzell / 39 Comments

Q. When is a surplus not a surplus?
A. When someone is talking down the Scottish Government.

Today the Auditor General published its annual report detailing an independent opinion on how well the Scottish Government is managing its finances (or how badly it is failing to do so).

This year, as last, there have been howls of anguish from those opposed to the Scottish Government at the fact highlighted by the Auditor General that the Government spent £350 million less last year than it was given in the Block Grant.

As the opening question suggests in most normal countries when your government spends less than it has available to spend then it is running what is known as a budget surplus. This is, especially in today’s economic climate, generally considered to be a “good thing“. Not so in Scotland, apparently, where the phrase to be used instead is “budget underspend”.

How this has occurred, is due to the peculiar way by which the Scottish Government is funded and is constrained to spend its money.

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We Need To Talk About: The Green Investment Bank

June 25, 2015June 25, 2015 / Dr Craig Dalzell / Leave a comment

Another day. Another broken promise from Westminster. I had been expecting news like this since the referendum last September but I’ve been frankly shocked by the rate at which they’ve been coming and where the hammer-blows have been falling.

Today it was announced that the Government will sell off the Green Investment Bank. The bank, capitalised with some £3 billion of taxpayers money, was set up in 2012 with the mandate for providing investment and incentive for renewable schemes across the UK. Its headquarters were located in Edinburgh in a bid, as it was reported at the time, to attempt to head off the push for Scottish Independence. Indeed, even just the week before the referendum dire warnings were uttered about the potential of Scotland “losing” the bank if we voted Yes (The news that the bank hadn’t actually been investing more than a token amount within Scotland in its first year or so was, of course, conveniently placed to the side).

Instead, now that we’ve “safely” voted No, the bank is to have up to 70% of its shares sold off to private interests for somewhere around £1.4 billion, under half of its initial capitalisation, at a time when it has just announced that it has become profitable.

Of course it’s not all just about the outright betrayal of Scottish voters. In this move, as well as last week’s scrapping of onshore wind incentives, David Cameron and his new Tory majority government are flexing their ideological muscles. Gone utterly is their “Greenest Government Ever“. To quote Scottish Greens co-convener Patrick Harvie on the topic today:

“The sell-off of the Green Investment Bank proves that David Cameron’s comment about wanting to ‘cut the green crap’ has now become a full-blown mantra for a right-wing Government determined to wreck our renewable energy opportunities. The bank was a half-hearted effort by the Tory-Libdem Coalition, with limited powers and funding. Rather than taking another backward step we need governments to go further and faster on developing new energy sources and cleaner industries as the need to leave fossil fuels in the ground becomes ever more urgent.”

Added to this is the call from Green Party of England and Wales MP Caroline Lucas:

“The Government’s rash and irresponsible plan to sell off a large chunk of the Green Investment Bank calls into question their commitment to investing in a low carbon economy.

“At precisely the time when we should be leading the world in the fight against climate change our Government appears to be in retreat. The Government should keep at least a majority stake in the Green Investment Bank to ensure investor confidence is upheld and the commitment to low-carbon lending remains.”

This is just another string of sell-offs by the Government of profitable parts of public service at a substantial loss to the taxpayer (joining such company as the East Coast Mail Line, The Channel Tunnel, The Royal Mail and many of the banks bailed out in 2008). It is purely an ideological move by the Tories to get the Government out of the business of owning any kind of body capable of serving the public.

I have to wonder what they think the endgame is. Just what do they want Tory Britain to look like?

And is there a place in it for us on the ground?

We Need To Talk About: Human Rights

May 13, 2015May 13, 2015 / Dr Craig Dalzell / Leave a comment

“For too long, we have been a passively tolerant society, saying to our citizens: as long as you obey the law, we will leave you alone.” – David Cameron, 13th May 2015

Well, that didn’t take long, did it? No sooner than a few days after the news that we’re to endure another Tory majority government (albeit one with a majority only barely greater than Major’s 1992 fragile win) and we see what’s in store for us. Almost first on the agenda, an aggressive move against our civil liberties and a move to withdraw the UK from the European Convention on Human Rights.

To understand the significance of this we need to look at the history of the convention and why it came about.

Like much of the early history of the European Union and other such institutions, the ECHR was birthed from the recoil from the horrors of the Second World War and was drafted by the Council of Europe in Strasbourg in 1949. It sought to match the then newly drafted Universal Declaration of Human Rights and was part of the wider strategy by the Allied nations to ensure that no government or country could attack its own or any other populace with the severe violations committed during the war. Over 100 parliamentarians from twelve countries, including the leading role played by the UK, drafted the 59 Articles of the Convention.

Some of these articles are so self evident; such as the right to marry and raise a family, protections against torture, the right to life and freedom from slavery, that it may be a wonder to some that they have only been put into such a convention within living memory. And yet, Cameron would sweep them away. What could possibly scare him so?

Certainly Article 7’s clause against retroactivity may yet cause him problems due to the debacle in 2013 when Iain Duncan Smith’s Workfare program was deemed unlawful until the government decided by fiat that it was and always had been. (See: http://anotherangryvoice.blogspot.co.uk/2013/03/dwp-retrospective-law-fascist-workfare.html)

Even Article 16, which prohibits EU nations from considering other EU citizens as “foreigners” has serious implications for his attempts to restrict welfare, the right to work and the right to free movement within the European Union.

But from what’s been said just this week, it seems that what Cameron is most interested in is avoiding a repeat of the 2009 instance of the near-breach of Article 15 on derogations from the Convention in extremis. In that case (A v United Kingdom: http://hudoc.echr.coe.int/sites/eng/pages/search.aspx?i=002-1647) it was found that while the UK was right to apply to partially suspend the convention in the wake of the Sept 11th attacks the measures it actually took (extending detention without trial and control orders to British citizens as well as foreign terrorists) were disproportionate.

I rather suspect that Cameron’s attempts to replace the ECHR is less about removing the rights entirely but about allowing the government the “flexibility” to bend the rules whenever someone becomes an inconvenient embarrassment much like the case of Abu Hamza al-Masri who spent ten years successfully arguing that it would be illegal to extradite him to a torture using country to face prison conditions which would be considered degrading under British law and where he could possibly face the death penalty (i.e. The United States of America). Now, al-Masri was not a pleasant person and when he finally was deported he was duly tried, found guilty and incarcerated for his crimes but to scrap the entire basis for our human rights just to speed up the getting rid of such inconveniences is simply beyond the pale. It opens us all up to the time when we, too, become an inconvenience. As Cameron has stated, it is no longer a matter of whether we break the law or not.

Our Human Rights are just that. They are Rights. They are not suggestions to be ignored by the government at will. They must be protected and we must oppose the government’s inhumane attempt at authoritarian control.

It has long been the last defence of the proponents of the police state that those who have done nothing wrong have nothing to fear.

It is time for those people to step up now. Read that quote in the opening again. That defence has been shattered by the Prime Minister’s words today. What is your response now?

Further Reading

The Full Text of the ECHR: http://conventions.coe.int/treaty/en/Treaties/Html/005.htm

The Scottish Government’s adoption of the ECHR: http://www.gov.scot/Topics/Justice/law/human-rights/Europeanconvention

More on the ECHR and Scots Law: http://www.scottishhumanrights.com/careaboutrights/howaremyhumanrightsprotectedinlaw

The implications for Scotland if ECHR is abolished: http://www.scottishhumanrights.com/careaboutrights/howaremyhumanrightsprotectedinlaw

14 Myths about ECHR spread by the press: http://rightsinfo.org/infographics/the-14-worst-human-rights-myths/

How abolishing ECHR could lead to indyref2: https://commonspace.scot/articles/1322/michelle-donnelly-why-abolishing-the-human-rights-act-won-t-make-britain-any-more-sovereign-and-could-be-the-road-to-indyref2

We Need To Talk About: The Transatlantic Trade and Investment Partnership (TTIP)

April 21, 2015February 4, 2016 / Dr Craig Dalzell / 1 Comment

What is it?

The Transatlantic Trade and Investment Partnership (TTIP), also known in the US as the Transatlantic Free Trade Agreement (TAFTA), is a free trade agreement currently being negotiated between the United States of America and the European Union. It is largely based on the North American Free Trade Agreement (NAFTA) signed between the USA, Canada and Mexico in 1994 and is a cousin to various other trade agreements being negotiated between the US and other states such as the Trans-Pacific Partnership.

What’s so good about it?

Proponents argue that TTIP will eliminate trading tariffs and other trade barriers between the EU and US and will allow the harmonisation of health and safety laws and other regulations ensuring that goods and services exported to either or both blocs can be made to comply with regulations in all areas. They argue that this will bring economic growth and increased trade.

What’s so bad about it?

From a trading tariff standpoint, it is hard to see how this agreement will bring much in the way of benefit. Due to prior trading agreements organised via the World Trade Organisation, tariffs between the EU and US average at a little under 3% so there is little to be achieved by eliminating them. Instead the concern with TTIP lies mainly in its focus on non tariff related matters.

One major concern lies in the idea of “harmonising” the likes of health and safety law. The Greens, along with our partners in the European Free Alliance, strongly oppose any measure which would bring historically more stringent European health and safe regulation “down” to historically more lax American standards. As an example, there are currently large divergences between the US and EU with regards to which chemicals are allowed to be used in the agricultural sectors. The EU currently bans the use of growth hormones in meat and milk production whereas they are in common use in the US. Unless TTIP acts to ban such hormones in US (unlikely given the strength of the agribusiness lobby with American politics) then it is difficult to see how forced “harmonisation” of these laws would do anything other than open the EU to such produce. Similar arguments extend to subjects like the production, regulation and labelling of products containing Genetically Modified Organisms (GMOs).

Similarly, one of the arguments levelled by proponents of unconventional gas and “fracking” is that disasters and pollution caused by lax US safety standards could not happen here. If TTIP acts to bring EU standards down to US standards then this argument is undermined.

This example leads to another major concern of TTIP. Draft proposals leaked to the public indicate that corporations would be given the power to legally challenge any member state which acted against the principals of TTIP and maintained any real or perceived “barrier to trade” against the corporation. This could include breaking the prohibition of chemicals banned in the EU but legal in the US within the agricultural or chemical sectors mentioned.

These legal challenges, known as Investor-to-State Dispute Settlements (ISDS), have occasionally been seen within countries such as challenges launched against the Slovakian government when it attempted to renationalise its health insurance sector or against the Egyptian government when it attempted to increase the national minimum wage. Under TTIP the scope for companies to use ISDS’s could be greatly expanded. For instance, this could mean that American private health insurance companies could attempt to sue for “access” to our NHS market and any attempt to keep the healthcare of our citizens in public hands could be deemed a “barrier to trade”. At the very least, the possibly lengthy and complex legal battles would prove an expensive drain of time and tax-payers money.

Finally, another particular concern about TTIP is the fact that all of this negotiation is being done behind closed doors and away from the democratic process. The UK government and our MEPs have very little direct access even to the documentation of the treaty and many of the concerns raised have only become apparent after documents were leaked to the public. Without proper democratic scrutiny and transparency this treaty simply cannot address the needs of the 500 million+ citizens to be affected by it. A treaty of this magnitude simply cannot be decided by a few industry lobbyists.

What can we do about it?

Education is key. So far TTIP has seen vanishingly little media coverage so many people are still unaware of even its existence never mind the implications of the treaty if it were to come into force as it currently stands. Several papers have been referenced at the end of this article explaining TTIP in more detail and anyone interested in the topic should certainly read them and share them with others.

Whilst this treaty is largely occurring way above even National level politics, the impact of it will be felt at all levels. Lobbying your local representatives at all levels of government (i.e. MSPs, MPs and MEPs) to express your interest and ask them to pass your concerns on is vital. Seeking their opinions and where they or their party’s differ from yours can also be powerful, especially in an election year.

Finally, you can get involved in the grassroots activism. Many online petitions exist and can be signed and many social media sites are frequently used to seek out and share information. Joining your local political party or activist group can also help you get more directly involved in campaigning for reform of this important treaty.

We need to talk about GERS

March 12, 2015April 21, 2015 / Dr Craig Dalzell / 5 Comments

Much has already been said about the publication of the latest round of the Government Expenditure and Revenue Scotland report or GERS (http://www.gov.scot/Resource/0047/00472877.pdf). Much rammying done over what these figures mean for an independent Scotland.
Answer: Not much. They tell us nothing about future policy direction. GERS isn’t a prediction of different circumstances, merely a snapshot of how current policy is affecting us.

More rammies have broken out over whether Scotland is or is not “subsidised” by money from the rest of the UK. Answer: This year and last, probably. But it’s yet to make up for the decades of cash flowing the other way to the tune of around £220 billion over the past 35 years. Little is said during this about the state of the UK’s finances to which we are compared. As a percentage of revenue, the UK deficit is currently worse than that of Greece at 15.6% versus 10.4% respectively!

Even less is said about how balanced Scotland’s economy is compared to the UK’s. If we are to be bound by (largely) the same economic rules and austerity agenda then we need to know if it is “working” for Scotland as well as for the UK as a whole.

Here is the table from the report breaking down the tax revenue from various sources.

Scotland, by population, makes up 8.1% of the UK total. We should, all things being equal, contribute 8.1% of each of those different tax sources. Several disparities stand out to me.

The largest one is income tax. There is a £1.2 billion shortfall in our income tax receipts. This is despite Scotland’s higher employment rate. In essence, Scots are taking on lower paid jobs thus paying less in tax. Correcting that shortfall is the equivalent of taking every single worker in Scotland, part time and full time, currently earning less than the Living Wage and paying them a £25,000 salary instead. The lack of decent employment in Scotland is having a devastating impact on our nation’s finances and our ability to sustain public services. Incidentally, increasing employee pay would also raise the amount of National Insurance paid by several billions of pounds.

Ruth Davidson suggested fixing the deficit by raising the income tax rate, I simply say have more people earn more money and use that to pay more tax.

Whilst we’re looking at income, it’s worth looking at the other end of the spectrum. The large corporations touted as the “job creators” in this economic climate are largely based in London and the South East and the very rich pay a greater fraction of their taxes via Capital Gains and other wealth related taxes. Again, here, we see a shortfall in the amount paid compared to rUK removes over half a billion from Scotland’s accounts. Another £660 million are “missing” from our accounts due to shortfalls in both council tax and stamp duties. Policies designed to further inflate the London housing bubble simply don’t fit in a nation where the house prices are consistently comparatively lower.

But where does Scotland “over contribute” to the national finances? Tobacco, alcohol and gambling duties all contribute far in excess of our UK “share”. Some £640 million per year is collected off the back of spending on these items. Time and time again, studies have shown that a population ground down by stress and inequality turn to vice and addiction to ease the pressure (http://www.gcph.co.uk/assets/0000/1080/GLA147851_Hypothesis_Report__2_.pdf) and that income inequality in particular is the single strongest correlator with a nation’s overall wellbeing.

(Image: http://inequality.org)

If the economic policies of Westminster are designed to improve the lot of the top 10% (who have seen their share of national wealth increase from 20% to 35% of the total within my lifetime) then here is direct evidence that this strategy is most certainly not designed to help Scotland.

So why is no-one talking about all of this? Why do we hear nothing more than the same old back-and-forth mud slinging? There are plenty of journalists and politicians who have spent hours poring over the same data presented here. They must have the ability to spot the same patterns as anyone else can. Is it possible that it’s simply easier to complain about a problem than to identify the causes of it, much less actually suggest a solution?