American humour, they say, lacks irony. Seeing how far Donald Trump has got in the race for the Republican nomination, I can believe it. But we seem to have lost our sense of irony in Scotland too.
Does it strike no-one else as incongruous that we have a Nationalist government which has been clamouring for more powers, then when it gets them refuses to use them? And when it is offered even more, says that it might reject them?
Or that the grounds for that rejection might be that Scotland is not insured against the risk that its population – and therefore its economy – might not grow as fast as England’s. Is this not the supreme irony from a party which until very recently was calling for “full fiscal autonomy” and “full fiscal responsibility” – let alone independence?
But the irony is clearly lost on the Scottish electorate. With only three months to go before the Scottish Parliament elections, the SNP is around 50% in the opinion polls, while no other party reaches even half of that. Nicola Sturgeon would have to emigrate to avoid being confirmed as First Minister for another five years.
It is against this Alice Through the Looking Glass background that we have to judge the Scottish Government’s budget and its negotiating stance over the fiscal framework – the financial underpinning which will give practical effect to the new tax and welfare powers which will be devolved to Scotland by the 2016 Scotland Act.
First the budget: Finance Secretary John Swinney has been criticised for merely passing on the austerity cuts handed to him by Chancellor George Osborne, when he had the opportunity given to him by the new (interim) tax raising powers to increase income tax and reverse some of the cuts – particularly in education and local government services.
Penny for Scotland: then and now
This is hardly a surprise. Tax increases are never popular, especially just before an election. He will remember very well the “penny for Scotland” campaign which the SNP fought in 1999. The party actually increased its vote in that election, but by nowhere near enough to win a share of power in the Scottish Parliament that it had campaigned for 20 years to achieve.
It was a bitter disappointment. Its leader (Alex Salmond) stepped down and Mr Swinney took over the following year.
He has many excuses for not raising tax now. The power given to him by the 2012 Scotland Act is a fairly blunt instrument (although not regressive as the Deputy First Minister has claimed: see David Eiser’s forensic demolition of that assertion). He can tax the rich, but cannot at the same time avoid taxing those earning more than £10,600 a year. However marginal that increase might be – and Eiser suggests it might be as low as £20 a year for someone on the minimum wage, rising to £120 for someone on median earnings – raising taxes on the poor would be a gift to his political opponents.
Labour, in its budget response, has thought of a way around the problem. Kezia Dugdale, its leader, suggests that Mr Swinney could have raised extra money to mitigate cuts while protecting those on low earnings by giving them a handout of £100 each. Her Conservative opposite number Ruth Davidson, has described this as practically unworkable. She is probably right, but that is not the point.
Ms Dugdale no more believes she will be in power on May 6 than does Ms Davidson and therefore will never have to implement the policy. Its purpose was to embarrass Mr Swinney and give Labour at least one policy where it could claim to be more left-wing than the SNP.
It may have succeeded in the latter – although how valuable that will be in the polls is still to be seen – but not in the former. Mr Swinney can always fall back on the old argument that Scotland is enslaved by the cruel paymasters at Westminster, which plays well with his supporters and perhaps with some wavering voters too.
Juste retour à l’écossaise
It is essentially the same argument that the party is using in its negotiations over the fiscal framework. Relying on a lofty but impractical assertion from Lord Smith that any settlement on new powers for Scotland should lead to “no detriment” to neither Scotland nor the UK, the Scottish Government is arguing that as well as having the ability to raise some of its own taxes, Scotland should continue to receive its just share of UK spending.
This would be protected against the probability that Scotland’s population and therefore its tax yield will grow more slowly than that of the rest of the UK (for which read London and the South-east).
The figures are startling. Professor Anton Muscatelli has suggested Scotland could forfeit £3.5 billion over the next ten years, were this not the case. The effect of this over time would be to erode the higher public spending per head which Scotland enjoys.
But the SNP’s “cake and eat it” argument is not playing well with English MPs, particularly those for North-east constituencies where levels of disadvantage are at least as high as in Scotland yet public spending is substantially lower and there is no ability to vary tax rates. They do not see “no detriment,” in fact, quite the reverse.
The SNP has said that the issue must be resolved by Valentine’s Day or they will reject the new powers. A classic financial fudge is of course possible – but whether it is reached depends on how the politics plays out on both sides of the border.