Monday, 15 September 2008

Ach Tavish, awa an no go haverin!

Tavish Scott - no longer the newest party leader in Parliament (a title that didn't last long) - has given us his first major policy announcement, and it's a stinker.
In his speech to Lib Dem conference at the seaside Tavish called for an immediate 2p cut in income tax in Scotland without knowing how much it would cost - he said £400 million, but he apparently 'mis-spoke' and his staff later said it was £800 million. It's actually around £930 million in the first year - around £800 million in the tax cut, £100 million in initial set-up costs for the tax system and £30 million in running costs to HMRC - yup, right back to the Treasury.

That's 3.1% of the Scottish budget wheeched awa on a tax cut.

I'm not going to refer to Tavish's very recent support for a tax rise (beginning of August, since you ask), I'd far rather be much nicer to my good Viking friend and take a wee wander back to his budget speech on the 23rd of January, 2008. What do you mean you didn't listen to it?
Let me pick out a few choice quotes:
The SNP's budget has no details on efficiency savings, public-private partnership alternatives, single outcome agreements, the council tax freeze, national priorities, level 3 spending plans, or—crucially—the impact that those things will have on the delivery of public services throughout Scotland. How can a Parliament endorse a budget in the absence of such information?
Of course, there was actually more information in the budget than in previous years (Lib Dems weren't on the inside this time so didn't have the extra info), but if Tavish thinks there wasn't enough information for a council tax freeze, how does he justify nearly £930 million worth of cuts without any details? Quick headline old chap?
The Liberal Democrats have raised substantive and significant issues in committee and have highlighted serious concerns about a number of spending commitments that are vital to Scotland. They have expressed concerns about police numbers, student debt, class sizes, health expenditure, enterprise, transport investment, waste management and flood measures.
They're going to be even more concerned with 3% of the budget missing, mate.
We are not content to sign up to a budget that is so contingent on £1.6 billion of savings when the Government cannot tell us and Parliament how and when those savings will be made.
Quite, Tavish, where's the beef? In the Lib Dem amendment moved by Tavish was this wonderful line:
is further concerned that the budget choices made by the SNP government will lead to cuts in vital public services across Scotland
That turned out to be tosh, but we can be sure that a 3% cut in Scotland's budget will lead to serious cuts to Scotland's services.

Let's try to be fair to Tavish and look at where he later claimed the money would come from. You have to remember that a tax cut in Scotland is a spending commitment for the Scottish Government.

He wants to cut the Scottish Futures Trust. So that would be saving money by getting rid of the body which will change public procurement and thus save money, so Tavish would save £14m a year at the cost of about £150m a year -oops.

There's a cracking bit in the Times story:
his spokesman emphasised that it was an indication of the wider cuts in government that Mr Scott wanted.
To the bone or until the pips squeak, perhaps? Well, we don't know, it wasn't laid out.

That stills leaves the Lib Dems short of £916 million to bridge the gap - where's the money coming from? Barnett consequentials, according to Tavish. Leaving aside the fact that there has never been a Barnett transfer on that scale (and that most of them don't actually happen - see previous posts), let's think it through:

Barnett consequentials are, by their very nature, unpredictable - you can't tell when they'll happen nor if - so does Tavish want Scotland to plan future spending on the basis of a guess that some money will come along at some point? Is that not akin to taking the Consolidated Fund down to the casino and putting it on the roulette table?

There's the flip side to that coin as well - investments can go down as well as up, and public spending is more likely to be squeezed in the near future than it has been in the recent past. Scotland is more likely to see Barnett consequentials taking money away than bringing it to us - especially if the Lib Dems get their way and start cutting taxes and spending at the Treasury - so Tavish will be paying for his tax cut with money that just doesn't exist, moonlight flitting anyone?

While I'm on this rant, and before I get to Lib Dem councillors, Nick Clegg. The Cleggish one has said that he'll pay for his 4% tax cut by imposing extra green taxes. Coupla things here:

1. Moving the burden from one revenue stream to another isn't a tax cut, it's just a rebalancing.
2. The point of green taxes is to pay for environmentally friendly initiatives that wouldn't be funded otherwise so if they're to fill a hole in your balance sheet they're not green taxes, just taxes.

More importantly, perhaps, given that the Lib Dems have ground on for decades about fair taxation, moving the tax burden from direct taxation to indirect taxation adds burdens to the poorest in society. I thought the Lib Dems were in favour of progressive taxation - let me quote Tavish again, Parliament, 21st of June, 2007:
As Mr Brownlee fairly pointed out, today's debate is about the principle of progressive taxation. I acknowledge the Conservatives' opposition to that principle, but I must say that I have always been a little surprised that my former colleagues in the Labour Party have never supported the contention that an important element of our tax system should be progressive local taxation. I and the rest of the Liberal Democrats are very keen for Parliament to endorse the principle today.
If Tavish is looking for a few million quid in savings, though, he should have sent himself far from the madding tram of £500 million. The tram company signalled its intent recently to come back to the Scottish Government for more tens of millions of pounds for this failing project. Lib Dem councillors in Edinburgh have started warming their hands on this project, missing the obvious point that the Rake's Progress was Labour's before they were turfed out of office.
I take it that Tavish will be lifting the phone to Councillor Phil Wheeler and telling him that his expensive train set is not to be extended.

Two new opposition leaders - both poor starts. I hope the Greens choose better.

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