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Wednesday, 24 November 2010

A Taxing Problem For Us All

So the Scottish Parliament has flexed its muscles in order to administer a rap on the knuckles to a somewhat penitent SNP Finance Secretary John Swinney over the Scottish Variable Rate (SVR) tax stushie.

Despite early attempts by the SNP to tough it out, yesterday in Parliament Mr Swinney expressed regret for an "error of judgement", acknowledging that the Parliament should have been informed from the beginning of the negotiations with HM Revenue and Customs (HMRC) over the cost of collecting the tax.

It is true that some commentators, and no doubt a fair few voters, are struggling to care about who said what to whom over the Bill for an IT system to collect a tax that none of the major Scottish parties have any intention of implementing. It is also true that claims that the power had been "lost" or even that it had "lapsed" were inaccurate. The tax varying power remains a power within The Scotland Act. The issue is one of technical capability, not legal competence.

Still there is also force in the counter argument that a power in principle is no more than wishful thinking if no practical means of exercising it exists; and that a fundamental power such as this should not have been allowed to wither on the vine, certainly not without full democratic scrutiny.

The issue of funding for HMRC to support the collection of SVR appears now to be more complicated than was obvious from Scottish Secretary Michael Moore's initial letter. In some ways this plays strongly to the advantage of the SNP since it highlights the difficulty of a devolved Government achieving its objectives when the agencies tasked with delivery are not under their control.

Conversely however, the extent to which an apparently simple and clear objective (the ability to vary tax by 3p) has become mired in administrative detail is also a timely reminder that Governments can have all the legal powers their hearts desire, but they don't amount to a hill of beans without effective policy execution.

No doubt lessons will be learned from this saga to inform the implementation of the tax provisions contained in the forthcoming Scotland Bill, (which takes forward the proposals of the Calman Commission). Not least that a detailed and public memorandum of understanding about the roles of the Scottish Government, HMRC and the Parliament might be useful.

There is now talk of an inquiry by the Parliament's Finance Committee. Many issues are yet to be clarified, but it does seem that the funding decisions were complex, and quite finely balanced. You might well disagree with Mr Swinney's decision not to commit the necessary funding, but it is more difficult to see it as entirely unreasonable.

It is on the question of transparency that Mr Swinney and his Cabinet colleagues were arguably most vulnerable, and indeed in expressing regret he has acknowledged as much. It does now seem that his statement to Parliament that he did not intend to raise the Scottish variable rate was a little like proclaiming "Don't worry, I won't shoot!" when in fact there were no bullets in the gun.

However, the way in which this tale has unfolded also raises wider issues of transparency in the political context. Specifically the extent to which the business of politics can make honesty a risky policy. Had Mr Swinney come to the Parliament seeking views on the HMRC funding request, would this have been treated objectively and sensitively by the opposition parties? Maybe. Maybe not.

If the SNP had proposed refusing to provide funds their opponents could have challenged their credentials as the party seeking greater powers for Scotland. If they had argued in favour of funding, they might have been criticised for wasting public funds on a vanity project; shelling out cash in order to retain a power they had no intention of using, (partly because the new Calman inspired tax powers are waiting in the wings).

I have written before about how hard it is for politicians to meet the expectations of the electorate. We claim to want politicans who listen and respond and yet often they are castigated for indecision, "u-turns" or "flip-flopping". Senior politicans may be many things but most of them are not daft. They behave the way they do, they play politics they way they do, because they are rewarded for it.

We may decry knockabout politics but it gets headlines and it lands electoral punches. The difficulty is that clarity, openness and honesty can be the first casualties. To return to SVR, it has been very difficult as an interested, never mind casual observer, to follow the facts of this story.

The initial letter from the Scottish Secretary, whilst opening the issue up for debate, was scant on detail and arguably rather partial when it came to the facts of funding negotiations. For their part the Scottish Government were slow to release written details of what had gone on. At the time of writing, I have still not been able to find any mention of the SVR stushie on its website. It may be there, but it's certainly not easy to find.

All of this makes it pretty tough for a concerned voter to get a handle on the facts and who to believe. Why does that matter? It matters because it is an issue of trust. We are forever being told that trust in politicans is at an all time low. Much of the blame for that can be laid at the door of Westminster politicans who behaved so badly over their parliamentary expenses.

But trust is also a problem because too often the politicians seem only to be talking amongst themselves. The focus of their energy is on winning the argument, making a case, dodging a bullet. Sometimes you can do all of these things very successfully, but is that the same as making things better?

This week saw the broadcast of "Mandelson -The Real PM?" where the arch politician of our times described himself as a "professional politician". And perhaps that sums it up. That word, "professional". It prioritises politics for its own sake, rather than as an agent of positive change. I don't mean to suggest that politicians don't care about voters. In my experience they do. Only that sometimes they may need to be reminded not to behave as if the politics is an end in itself. And that's a taxing problem for us all.

1 comment:

  1. And there's the rub: too many "professional" politicians playing political games, rather than representing their constituents or the country as a whole.

    Some businesses are like that, which is why I left the comfort of a top-20 accountancy firm and started my own business 11 years ago.


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