Friday, 29 May 2015

Scotland Bill is trap for Independence movement says eminent economists

I’m beginning to think the Scottish Socialist Party’s exclusion from the Smith Commission - we were the only one of the 6 parties formally involved in the Independence campaign not invited to join - was a blessing in disguise. Because as Joyce McMilan states in today's Scotsman ['Scotland Bill is a challenge for SNP'] 'What's undeniable is that last November all five parties signed up to this deeply flawed settlement.' And she is right because neither the powers proposed by the Smith Commission nor under Full Fiscal Autonomy or the new Scotland Bill puts an extra penny into Holyrood’s treasury. That unmistakable fact should be obscured by no-one in this debate. Moreover under the so called ‘no detriment’ principle enshrined in the new Scotland Bill any extra revenues accruing to Holyrood are automatically deducted from the Block Grant Holyrood receives under the Barnett formula. On the other hand under what Jim and Margaret Cuthbert of Stirling University call 'the Gearing problem' the Scottish Government is loaded with many new responsibilities and a potential reduced tax base. In other words the Tories are not proposing to pass on a penny but will pass the responsibility for cuts in public services and welfare benefits to Holyrood, thus dumping political disadvantages to them. I thought Nicola Sturgeon’s 'faux outrage' at the Scotland Bill yesterday at First Minister’s Questions was a sign the SNP realises they will need to do a dramatic U-turn on their attitude to Smith because they understand David Cameron’s ‘Scotland Bill [2015]’ is a trap. And it is one the SNP fell headlong into. 'Full Fiscal Autonomy' sounds attractive but as I pointed out throughout the General Election campaign the devil is in the detail. The FFA envisaged by the Tories does not mean full tax raising powers are transferred to Holyrood, far from it. They propose in fact that most taxes raised in Scotland will continue to be sent to London. And yet they are conspicuously silent about the obligations Scotland would face in terms of expenditure; contributions to defence and foreign affairs, to Europe, for UK Embassies across the world, to UK historic debts and much more. We would continue to be responsible for many debts and not actually enjoy the full benefits of all taxes raised here at all. The Independence movement owes the Cuthberts a debt of gratitude for pointing out the trap Smith set us. We therefore need to oppose these provisions in the Scotland Bill and focus our energies on winning a second referendum as soon as possible.