Thursday 6 October 2016

Labour's train of thought is off the rails

Here's a thing - at First Minister's Questions in Holyrood today, Kezia Dugdale (Labour)(Lothian list)(Leader) claimed that a third of all rail routes in Scotland have services that are late more often than not.  Later, Neil Bibby (Labour)(West of Scotland list)(Transport and Town Centres) tweeted that it was a third of all trains.

That table comes from Scotrail's monitoring of its own performance and can be found here.  Let's first knock Mr Bibby off track - that's a list of stations, not trains.  To think that a third of stations equates to a third of trains means that Labour's transport wallah thinks that all stations in Scotland are as busy as all the others.  It means he thinks that Arbroath is as busy as Glasgow Central and Balloch as busy as Edinburgh Waverley - only an eejit would believe that.

Assuming that El Bibster simply mistweeted and meant to ape his boss, let's see about Kezia's take.  She said it was a third of all routes and you could see that that's a possibility but I spotted that Arbroath is the worst performing station and, since I come from Dundee, I know a little about the railway up that way and any train that stops at Arbroath also stops at Carnoustie which is also in the third getting less than 50% so that shrinks the number of routes by one.  Over on the west coast Glasgow High Street is listed but trains travelling through GHS serve Helensburgh Central, Balloch, Milngavie, Dalmuir, Springburn and Cumbernauld which are all also listed as being less than 50%.  The number of stations doesn't represent the number of trains or the number of routes.

Besides which, not all of Scotland's stations are listed (although Newcastle is) so there's no way of knowing how many services are affected by looking at those figures - Labour might have been better off if they'd looked up the National Timetable.

That's not all - you'll notice that those figures have a train being late if it it gets into the station more than 59 seconds after the time it was meant to.  59 seconds!  Seems quite stringent and it turns out it is - Network Rail uses the European standard definition of more than five minutes for commuter trains and ten minutes for longer distance.  You can see on that chart that the punctuality of ScotRail is currently at 90.6% against an England and Wales score of 87.4%.  It seems ScotRail is holding itself to a higher standard when measuring punctuality and it gets pelters from Labour for trying.

Oh what a tangled web they weave when first they try to score cheap political points and get easy newspaper headlines - or something like that.  Labour is truly appalling at opposition, truly teeth-grindingly awful.

Wednesday 5 October 2016

Benefit Scroungers

Peter Chapman MSP
Browsing through Holyrood's register of interests, I came across Peter Chapman MSP. 

There are these four farms listed under heritable property -
Until 14 July 2016 I owned a 50% share of a farm in Aberdeenshire with a total market value of between £400,001 and £500,000. The property yielded a gross annual income of between £40,001 and £50,000. [Amended interest 05 September 2016, Ceased interest 05 September 2016]  
Until 14 July 2016 I owned a 50% share of a farm in Aberdeenshire with a total market value of between £600,001 and £700,000. The property yielded a gross annual income of between £80,001 and £90,000. [Amended interest 05 September 2016, Ceased interest 05 September 2016] 
Until 14 July 2016 I owned a 50% share of a farm in Aberdeenshire with a total market value of between £1,000,001 and £1,100,000. The property yielded a gross annual income of between £80,001 and £90,000. [Amended interest 05 September 2016, Ceased interest 05 September 2016]  
Until 14 July 2016 I owned a 50% share of a farm in Aberdeenshire with a total market value of between £400,001 and £500,000. The property yielded a gross annual income of between £40,001 and £50,000. [Amended interest 05 September 2016, Ceased interest 05 September 2016] 
Seems a bit of a thing that; selling four farms in one day - surprising that no newspaper picked that story up, too; MSP sells four farms in one day - especially given that the market value is £2.4m to £2.8m and he managed to get the register amended on the day that the interest ceased.  It's possible to transfer your interests to another person and change the register because there's nothing in the legislation that says you have to declare your spouse's interests, for example, so you just transfer title and the £240k to £280k annual income from it to your wife and say no more about it.  Or you could transfer ownership and the attendant income to a company you own and neaten it all up - a shorter listing in your register.  Doing either would look like covering something up, though, and no politician wants to look like they're dodging the question, do they?

Anyway, that wasn't the important bit, it was just the bit that captured my attention.  There was this bit just dangling there, trying to look casual, chewing on a matchstick, looking at its fingernails, you know the kind of thing - 
Remuneration and related undertaking: I am a partner of Peter Chapman and Co. (of South Redbog, Strichen, Fraserburgh, AB43 6RP), a farming partnership. I receive remuneration in the form of utilities for my home, which are paid by the partnership to a value of between £5,001 and £10,000 per annum. I also receive interest payments on my stake in the partnership of between £5,0001 and £10,000 per annum. I expect to spend 2 days per month in this role. [Amended interest 05 September 2016] 
Until 9 August 2016 I was a director of Aberdeen and Northern Marts (of Thainstone Centre, Inverurie, AB51 5XZ), a livestock auction mart. I received the equivalent of £3,000 per annum and spent 2 days per month in this role. [Amended interest 05 September 2016] 
I am a director of Chapmans Chickens Ltd. (of South Redbog, Strichen, Fraserburgh, AB43 6RP), a poultry rearing company. Until 3 July 2016 I received £25,000 per annum and spent 2 days per month in this role. [Amended interest 05 September 2016] 
Now that's interesting because you can go to this DEFRA payments search page and put in the postcode and it'll tell you about taxpayer payments to this farm under the CAP schemes - a total o£101,669.44 last year and £99,320.66 in 2014 (those are the only two years available)  This journalist-run website (which doesn't seem to have been updated recently) indicates that about 900,000 was paid to this partnership between 2002 and 2008 it also shows Chapman Chickens (see that last bit above) getting €142,529 in 2012.  Now, it's a partnership so he doesn't trouser all that cash himself but I'm guessing that the other partner is probably this other Peter Chapman who seems to have interests in the same companies.

That other one in the middle there is a kind of cooperative (and isn't it nice to know that a Tory MSP is interested in cooperatives?) that does the obvious (livestock auctions) but also has other interests -
The Group is committed to its core business of livestock marketing, but is also highly diversified with interests in the land market, non-agricultural auctions, events and the catering/hospitality industry.
If you go back to the DEFRA page and put that postcode in you'll find that it got a bit shy of £50k  in public subsidy in each of the past two years.

It's that chicken thing, though - 
Interest in shares: Until 3 July 2016 I owned ordinary shares in Chapmans Chickens Ltd, a poultry rearing company, with a value of £36,450 which represented approximately 16% of the issued share capital. [Amended interest 05 September 2016, Ceased interest 05 September 2016]
I own ordinary shares in Redbogs Renewables Ltd, a wind energy company, with a value of £350,000 which represents 7% of the issued share capital. [Amended interest 05 September 2016]  
Voluntary: I am a member of NFU Scotland. 
I own 10 £1 shares in Chapman's Chickens, a poultry rearing company of Aberdeenshire. [Registered 05 September 2016] 
He's got rid of his shares so the value is down from £36,450 to £10 but it seems he remains a director of the company - that's an understanding and a half, especially since he got £25k last year for two days work a month.  That's less work than I do!

Then there's Redbogs Renewables with its two turbines generating a subsidy from the power companies.  You can try to work it out for yourself by getting the details of Redbogs and looking at the House of Commons research paper on renewable obligations.

Anyway, the thing is that this MSP's business has sooked in a fair bit of public cash to bolster its earnings, which may explain why he gets so anxious about subsidies for farmers.  What it doesn't explain is how that bit about his house works - how does he get between £5,001 and £10,000 of utilities paid for his house from the company?  That's between £416.75 and £833.33 a month - what size is his house?  Is he running a small factory there?

Edward Mountain
Old Eddie here is the 4th Baronet of Oare Manor and Brendon (Oare Manor is in Somerset and Brendon is in Devon) and his company also pays for the leccy at his hoose rather than fling him a few quid (given that these people own these companies you'd think they'd get some coin out of it, no?) but it adds the insurance on as well that brings it up to between £35,001 and £40,000 a year or between £2,916.75 and £3,333.33 a month.  Now I'm no expert but I reckon that's a wee bit expensive for your average house...

Delfur Farms got £131,960.09 in 2015 and £133,745.23 in 2014 (for some reason you have to search on the name of the company rather than the postcode for this one) and there are a couple of entries for it on the older site, too.  He's a busy lad and someone wrote a song about him but it's clear that this wholesome Tory chap whose family fortune came from screwing the insurance market also takes a substantial wodge of cash from the public purse.

Burnett of Leys
He has a portfolio of interests well worth taking a look at but he still found the time while managing them to claim nearly £25k from DEFRA in 2014 and over £22k last year (search for Burnett and then look for Burnett of Leys).  You'll also find that he's had a pound or two in the past as well.  He at least pays his own gas bill, though.

I haven't gone through the whole Tory group so there may be others (although, to the best of my knowledge, RuDa hasn't claimed any CAP money) but my point is this - Tories are delighted to have money paid from public funds so long as they're benefitting so when the debates on social security payments start in Holyrood, keep yer lugs open for these whizzers decrying the poor and the sick and the infirm.  When they start questioning whether some family where no-one has a job is worth a few quid a week to survive on, maybe we should be asking them how they did with public subsidy in their 'time of need' and whether they ever had to wait until giro day to get the heating back on.

Social Security benefits won't be easy for Holyrood - no dosh over and above what Westminster was paying and cuts coming down the line from the UK Government - but when some politicians are actually trying to get something done (and I anticipate those coming from every party) don't let these people who have had a fortune from public funds say that the poor are not worthy.  There's going to be debate and there should be debate about how to serve the country well but if and when Tory MSPs get to their feet to bore the hell out of us with their social engineering theories that rely more on Darwin than on common human decency, let's tell them to get tae France and Freuchie and Farfar - and the same for any bawbag blawhards from other parties.  If anyone's getting called a benefit scrounger, let's make sure we know who's taking most public cash.

Friday 12 August 2016

The big boys want all the sweeties

The Scottish Retail Consortium wants the Scottish Government to scrap the rates surcharge on large businesses.

The Scottish Retail Consortium doesn't actually exist, it's just a name that the British Retail Consortium uses to pretend it's Scottish sometimes.  The British Retail Consortium is just the big retailers getting together to try to get their own way (I've pointed this out before) and their Scottish address is this mailbox shop in Edinburgh.  They're quite willing to take all the services funded through business rates - like streetlighting, police, roads for their delivery vehicles and customers - but they don't want to pay for them.

Unfortunately for this particular scare story about Tesco, Asda, Sainsbury's and Morrisons suffering terribly at the hands of the Scottish Government, retail sales are going up - according to a KPMG survey done for ... erm ... the British Retail Consortium.  They're up in Scotland, too, just in case you were wondering.

Mind how ye go!

Tuesday 31 May 2016

Schooling the Tories

A few days ago the ruler of the Tory hordes in Scotland (one Ruth Davidson, for who else could it be?) answered a charge of Tory poshness from a posh lawyer (Mr Worrier, forename Peat) in an odd manner.  She tweeted "none of them went to Hutchies like you - maybe speak to Humza or Anas?" - she was referring to Mr Worrier's schooling and the fact that the painfully upper class* Minister for Transport and the Islands also attended Hutcheson's Grammar School, as did the Labour MSP (and former deputy leader of its Scottish branch) Anas Sarwar.  It should be noted that this school also processed Carol Smillie, John Buchan, Laura Keunssberg, James Maxton (yes, the Red Clydesider), Derry Irvine, Ken Bruce, Adair Turner and so on - the place has a lot to answer for!

Hutchie, as those of us who have learned our place call it, charges £11,082 a year in the senior years but £11,352 in earlier years for some reason.  I've no idea why anybody sends their kids to private school (well, there are the contacts they make for life, the preference they get from people who think that the old school tie matters and so on and so forth; and that some parents consider such schools to offer a better education, but hey, groove with me here) and I don't know much about which private schools have swisher things than others (although I do remember, as a schoolboy, going with the St Saviour's team to cuff Glenalmond at the cross-country running and the scran afterwards was utterly fabulous - and entirely scoffed by us oiks before the posh kids were showered and changed out of their running gear - us scruff were less pernickity)** so I'm not really a judge of what makes a private school good or bad or indifferent or comical***.  That said, I think that RuDa's point is "you're a posh boy, my troops haven't been to a posh school like wot you did, so shut yer trap Worrier."

I know you'll think less of me for it, but I didn't believe wee RuDa straight off and I thought I'd check whether her troops were entirely Hutchie-free.  I feel a burning shame for my lack of faith but it seems that it's true.  Here's what I found (in alphabetical order; dunno is where my research assistant, Mr Google, failed to find any evidence of derring-do or matters nefarious) - 

Jeremy Balfour – Edinburgh Academy fees are £13,248 per year (plus extras)
Miles Briggs – state school

Alexander Burnett, 4th great grandson of Tsar Nicholas 1st and heir to the Leys Estate – Eton fees are £37,062 (plus extras) and the heid bummer is appointed by the Queen

Donald Cameron, son of Cameron of Locheil – not clear where he went to school but it’s a family tradition to go to Harrow where fees are £36,150

Jackson Carlaw – Glasgow Academy fees are £11,063

Finlay Carson – state school

Peter Chapman – dunno

Maurice Corry - dunno

Ruth Davidson – state school

Murdo Fraser – state school

Maurice Golden – dunno

Jamie Greene – state school

Rachael Hamilton – dunno

Alison Harris – dunno

Alex Johnstone – state school

Liam Kerr – dunno

John Lamont – state school

Gordon Lindhurst – dunno

Dean Lockhart – state school

Margaret Mitchell – state school

Edward Mountain, 4th Baronet of Oare Manor and Brendon (Devon) – dunno

Oliver Mundell – state school

Douglas Ross – dunno

John Scott (good guy) – George Watson’s fees are £10,983

Graham Simpson – dunno

Liz Smith – like John Scott, she attended George Watson’s where fees are £10,983

Alexander Stewart – dunno

Ross Thomson – state school

Adam Tomkins – state school

Annie Wells – dunno

Brian Whittle – state school

*he's not really
** also, Fettes College had a hustings in 2010 when I was a candidate and the pupils were polite, well informed, thoughtful and prepared to consider other opinions.  Also, they gave me a bottle of school claret for taking part.
*** 30 words to a sentence?  Really?  Live a little.

Saturday 30 April 2016

Two votes? Two votes you say?

I thought I'd tell you how to use your regional list (second / Additional Member / what's this thing?) vote in the Scottish Parliament election to get the result you want if you're a supporter of independence.  If you're not a supporter of independence don't vote, whatever you do don't vote.

Your constituency (first / FPTP / traditional) vote should be for the SNP, of course; that goes without saying (don't ask why I'm saying it if it goes without saying - less of your troublemaking) and should be a tradition that you and all your family and friends should cleave to without question unless and until I change my mind.  Your regional vote, though, should be your flight of fancy, your love at first bite, the jam on your piece, your secret, dirty delight - just vote for the party that you like the most  - vote for whichever party you want to form the next Scottish Government (or whoever you feel sorry for or the party you actually support even though it's got no chance of taking power or for the party punting policies you believe in) and don't stress over it.

Except, except, except ...

Some people, who are, to all appearances, sensible and otherwise sober folks are considering voting Green with their regional vote.  That's excellent if you like that kind of thing - knock yersel oot; fill yer boots; light a candle at both ends and stick an organic sparkler in the middle.  Make sure you know what you're doing, though.  First things third, understand the system; I give you Cutbot which is run by James Mackenzie (one time media director for the Greens in Parliament) and Aaron Crane whom I dinna ken.  Cutbot has created a seat predictor that shows the working figures on the regional lists (I haven't read the methodology, I just trust James to get it right) and lets you fiddle about with them - marvellous fun.  Those working figures are what you need to look at to see how to affect the outcome of the election.

Ignore the 8th divisor and allocation - that's something that political anoraks like me find interesting; it's what would happen if there was an extra seat in each region.  What you want to know is what it would take to change the last seat  in each region to an independence supporting party (that's the first seat you can change and it works backwards up the table).  To work that out, multiply the difference between the allocation figure of the winner of the last seat and the next biggest allocation figure by the divisor of the runner-up and you can see how many extra votes are needed.  Or you can just fiddle about with the numbers you put into the thing and see what happens.

Here's what I saw when I last looked at it (29th of April, 2016) -

Central Scotland region - SNP wins the last seat so you don't want to change it, you want to reinforce it and no other indy party has a regional seat so indy supporters should vote SNP on the list to make sure it happens - Greens and RISE supporters should vote SNP on the list.

Glasgow region - Patrick Harvie is safely elected on the third round and no other indy supporter comes in on the regional vote.  For the SNP to beat Labour to the last seat needs us to get 27,911 extra votes, the Greens need a few hundred - a wee bit cheese would help them across the line.

Highlands and Islands region - the SNP needs 2,359 votes to take that last seat from Labour, the Greens would need 4,083

In Lothian, RISE is closest, needing just over 13,000 extra votes compared to the nearly 17,000 for the Greens and the 69,000 for the SNP.  In Mid Scotland and Fife, RISE is closest again.  In the North East it's RISE again.  In South of Scotland it's the Greens.  In the West of Scotland it's RISE.

So you know what to do now, yeah?  Except on the last poll all those regions were different and on the next poll they'll be different again.  Also, sometimes it's not an indy party that's closest and that makes the gap harder to close because you have to beat two.  Also, change the votes on the last seat and you change the seats further up the chain - sometimes all you do is change the order in which the seats are won, not how many seats each party gets.  Also - look at how many votes have to change to make a difference in most cases; thousands of people, thousands of votes.

Then there's the thing that it's based on polls and they're not always right; they didn't get 2007 or 2011 right and they got 2015 howlingly wrong - they might be wrong now.  Fiddle about with Cutbot's model; change the numbers, see what happens when you move a few percentage points.  In particular, shift votes between the unionist parties and you'll see that the effect of indy voting can change without indy voters changing their minds.  You'll also discover that if every spare SNP and Green vote on the regional list went to RISE there would be a lot more pro-indy MSPs - if you get everyone who's adding spare votes switches but no-one who's in the active vote category does (because that would lose pro-indy MSPs, of course).

Here's something else - don't assume we're winning the constituencies all of the models I've seen assume that the SNP is winning every constituency between Thurso and Ulaanbaatar.  I know we're at bizarre levels of support but winning seats doesn't come cheap and isn't guaranteed; a good incumbent, a crap SNP ground campaign, an unexpected event, a bad candidate, a daft comment at a hustings, something dropping from the media sky; each of them can change an election.  There are eleven constituencies where I think that at least one of these conditions applies and I don't know all of the constituencies.  So, ye know, if the SNP doesn't win those constituencies and we don't have the votes on the list we lose some MSPs but, hey, that's democracy.

Vote however the hell you want but know what you're doing.  This isn't a referendum; it's not a choice of one side or the other; this is an election and you're voting for candidates and parties.  You might like thinking about who would be First Minister- would you prefer Nicola Sturgeon or Patrick Harvie; Colin Fox or Kezia Dugdale; Willie Rennie or Ruth Davidson - and that's worth thinking about and so is who they would appoint to look after education, health, the polis, transport, and so on.

Of course, if your constituency candidate or the top candidate on the list is a dribbling donkey then it doesn't really matter who they'd support for First Minister; you're not gonna vote for them and nor am I.  Here's a radical idea - have a look at your constituency candidates and choose which one you think is best (I'm currently torn between Ash Denham and Kezia Dugdale) then vote for the sucker (they all think it's going to be fabulous and then they end up on the sub leg committee) - that should teach them.  Once you've screwed a constituency candidate, why not ruin the lives of a few more on the list?

You're voting for a slate on the list - one vote, many candidates - so you should have a look at the candidates on each list.  Unfortunately, parties don't give you much information about the candidates on their lists so you might want to investigate these people but life is too short and the candidates are far too boring.  Instead you have to fall back on the principle that these list candidate wallahs are servants of their party and treat them like that, voting for them on the understanding that they'll do whatever the party whips tell them to do so every MSP elected on the list strengthens the central power of each party.

I'd love to see Colin Fox back in Parliament and I'd like to see people like Cat Boyd elected so the temptation to vote RISE is there but I like Jil Murphy and Irshad Ahmed and I think they'd both be good MSPs.  I'll be voting SNP on the list as well as in the constituency - that's my flight of fancy.

Whatever you do and however you vote, though, don't try to game the election; you don't know what everyone else in your electoral region will do and you might end up working against what you want to do.  Keep it simple, vote for who you want and don't stress it.

Wednesday 17 February 2016

Dancing with Labour's tax plan

Let's give Labour's tax policy another turn around the dance floor before we go for a buster on the way home.  It's a bit boring but worth looking at and you'll get a buster on the way home.  Labour's cunning wheeze is to increase the tax rate of everyone in Scotland by 1% from 20% to 21% - a 5% rise in tax paid for people who only pay basic rate tax (1 being 5% of 20) but less of a percentage rise in the tax paid for those who pay the higher rate of tax.  To be fair to Labour there was some attempt to undo the damage done by giving people back £100 if they earn less than £20,000 (of course, that £100 would be taxed at Labour's new 21% rate so it would only be worth £79) so if it worked it would at least be less awful than it appears at first.

'Independent' reports and the missing briefing

As the tax policy started falling apart in the days after it was launched we were pointed to an 'independent' report supporting the policy but there were some problems; it didn't take into account the tax on the £100 or the fact that it would have to be claimed from councils and it had the £100 bung as being paid twice to a family with two £20k earners while the legendary Duncan Hothersall had access to the original briefing and said it was per household.  He actually posted the section of the briefing that said it was per household (and I should have screengrabbed that) but later deleted that bit of his posting.  It's a pity; I'm sure I'm not the only one who'd like to have a wee look through the whole briefing.

I'd like to see, for example, how Labour judges between the HMRC estimate of what a 1% increase in Scottish tax would bring in and the Office of Budget Responsibility estimate because there's a £15m difference.  I'd also have liked to have seen how Labour intended to reimburse councils for handing out the cash - how far in arrears?

Before thinking about any of that, though, have a look at the biography of the guy who wrote the 'independent' report, Torsten Bell, as it's written on the Resolution Foundation website -
Torsten joined the Foundation in September 2015 as Director. Prior to this, Torsten was Director of Policy for the Labour Party and worked in the Treasury, both as a special adviser and a civil servant.
So you have a guy who left his employment as Director of Policy for the Labour Party in the same month as Corbyn became leader; joined a think-tank headed up by Tory David Willetts and 5 months later wrote a supposedly independent report backing Labour's plans.  Leaving aside the question of how we've come to a stage where a former Director of Policy for Labour can join cause with one of Thatcher's little helpers, how can we possibly believe that a position paper he's written about Labour policy can be an independent analysis since he was writing Labour policy just a few months ago?

Labour then pointed us to "another expert group" backing its plans but that's problematic, too - IPPR Scotland is Russell "Rusty" Gunson and some ad-hoc help from IPPR North (that's North of England, of course, not North of the UK) and he is an old Labour hand.  Like Kezia he was an NUS employee and a researcher for a Labour MSP before scaling giddier heights.  On the plus side, though, here he is playing a set at the Barrowlands - at least he followed a dream once.

If you want to see how Russell arrived at his conclusion that Labour's plans are good the analysis is here - but don't expect much, it doesn't show any workings or explain assumptions.  You might also wonder how IPPR Scotland has got to different amounts for Labour's plans and the Lib Dems' plans for the wealthiest people in the country, given that the plans are identical for people earning more than £20,000 a year.

How the U-turn distorts the policy and the costs that don't add up

How are we doing so far?  Excellent.  So here's some more fun; Labour's volte-face on the households/individuals thing about who gets the £100 kickback makes for some interesting scenarios.  It means that a childless couple on combined earnings of £39,000 could be claiming a £200 handout while a couple with children with a household income from one earner of £20,001 gets zero.  Even more ridiculous is the possibility that a couple with a grown-up child in the house could have a combined income of £59,000 and get £300 back while the couple with school-age children get nothing.  The Broons, with five people in the household working, could be hauling in £99,000 a year and be getting £500 back and so on.

Then there the numbers - they really don't add up now.  The kickback thing was costed at £50m which was raised to £75m within hours as Labour realised that pensioners had been forgotten about.  That included the money for the administration with the heroic assumption that it could be done for £1m because a far simpler scheme handing much less money is done for around £1m - leaving £74m to pay kickbacks.

There are half a million pensioner taxpayers in Scotland (page 26) so at £100 each that's £50m a year.  There are 573,000 working age taxpayers in Scotland that fall into the under £20,000 bracket to qualify for the kickback so that's another £57.3m.  That means that total payments would be £107.3m and that is £33.3m more than Labour's budgeted for the scheme - even if it can get the admin costs in under £1m.  The figure for working age taxpayers comes from 2012-13 because that's the most recent figures the UK Government has published but wages haven't exactly rocketed since then.

You can dig the figures out from the Annual Survey of Hours and Earnings (ASHE) that show that about 40% of Scottish workers are paid £20,000 or less.  Given that the most recent ONS stats say that the Scottish workforce is around 2.6 million strong, that would be about a million who are paid £20k or less but since we don't know from those figures how many are taxpayers we should stick with the just over half a million that the HMRC figures give us.

So if HMRC is right and the take from raising the tax rate by 1% in Scotland is £475m and the kickback payments knock £107m out with the administration costs taking away another million quid (at least), we'd be left with £367m from the scheme and over a million people queueing up at their local council offices to claim their rebates.  For comparison, Scottish income tax rakes in between £11.2bn and £11.5bn for the Exchequer (page 66) so we'd go through all that pain to raise less than a third of one per cent of what London currently soaks up from Scottish income tax payers.

The scheme might not be legal

I'm not done quite yet, though, because the legislation that Labour wants to use to pay the £100 is The Local Government in Scotland Act 2003, specifically Section 20, the power to advance well-being.  Perhaps Labour's researchers should have read on to section 22, and subsection 4 in particular, which says
The power under section 20 above shall not be exercised in a way which unreasonably duplicates anything which may or must be done in pursuance of a function, under any enactment (whenever passed or made), of a person other than the local authority.
Since tax credits, rebates and allowances are the preserve of the Treasury (at the moment - one waits with baited breath for the results of the Smith negotiations) and operate through HMRC councils can't give a tax rebate.  Benefits come under the DWP (councils administer housing benefit and council tax benefits as agents of the DWP) so councils can't do it that way, either.

There would need to be new legislation passed through Holyrood specifically to allow the payments to be made but that is straying into reserved territory and takes us into the detail of the powers of Davie Mundell under the Scotland Act - would he allow such legislation, created specifically to change a reserved decision, to stand?  With Mr Osborne - a vindictive man at the best of times - at his back and raging about the impudence, would the Secretary of State not strike it down?

Tax would be raised for every income tax payer in Scotland (rich people living off the fat of shares, stock options and inherited wealth aren't affected) and there would be no kickback.  Scotland's median wage is around £27k so even if Labour's plan worked it would mean that people on less than the average wage would pay more tax than they would under Osborne's plans.  £20,000 is only just over a quid more per hour than the living wage - it's hardly living the life of Reilly.  If the kickback plan doesn't work - and it looks like it can't - then people on the minimum wage will be paying more tax and pensioners will be paying more tax.  Labour will be asking the lowest-paid and pensioners to pay more than even George Osborne wants them to.

The system is broken - and so is Labour

The moral of the story is that the tax system from Calman just doesn't work for us (you can decide for yourself whose fault that is), it can't be made to work in Scotland's interests.  If you want a tax system that works you need control of the whole system.  Of course, we could have taken that control with a Yes vote in September 2014 but I'm not going to bring that up - I wouldn't do such a thing.

Watching Labour do politics these days is like seeing someone staring at an Escher drawing and calling it an architect's plan for a bungalow.  There's really no need to be quite so incompetent.


Right then, get your coat, I'll buy you a buster, these shoes are kiling me, I don't know why I wear them to the dancing, I really don't, I swear I'll have bunions in the morning...

Thursday 4 February 2016

Labour's tax rise and why it's wrong in very many ways

This week Labour promised a new dawn - an increase in Scottish income tax.  Kezia Dugdale, who is a fine woman trying her hardest in a difficult situation (imagine trying to fashion ice sculptures from melting slush), announced that we'd all get hit with an extra 1% income tax to fund councils but that people who earn less than £20,000 would get a few quid back - one hundred green and crispy pound notes, if you will, or a horrible clanking of brass if you're too young to remember real money.  Sounds like a decent plan where everybody is paying in a bit more to help out but there's a wee bit of help for those who might struggle.  A good idea - except, except, except ...

There are a few problems - 

Taxable benefits

From everyone's favourite Government department, HMRC, comes a list of

The most common benefits that you pay Income Tax on are:
  • the State Pension
  • Jobseeker’s Allowance
  • Carer’s Allowance
  • Employment and Support Allowance (contribution based)
  • Incapacity Benefit (from the 29th week you get it)
  • Bereavement Allowance
  • pensions paid by the Industrial Death Benefit scheme
  • Widowed Parent’s Allowance

The taxation personal allowance from April 5th will be £11,000 so if you were a carer working part-time and earning £11,000 from that job all of your tax allowance would be taken up.  George Osborne currently takes 20% out of your £62.10 a week carers allowance (£12.42 in tax per week or £645.84 a year) but Labour's plan would increase your tax to £13.04 per week or £678.08.  Then Labour would give you £100 back but that would be taxable at 21% so you'd get £79 of it so you'd be £46.76 a year better off - a bit less than 90p a week.  If your earnings are higher than this you'll get to a point where you're losing cash under Labour's scheme a lot sooner than you think (see below).

Essentially, get any of these benefits while you're a taxpayer and Labour will be coming for a slice of them.  Something further, though - some in-work benefits will be reduced when additional income is declared so some people might be left with just a tax rise.

It's taxable
As pointed out above, the £100 is taxable so it's only worth £79 if the tax rate is 21%.  That means that the break-even point under Labour's plan would be when your pay is £18,900 - any more than that and you're losing money.  Look -

Your pay is £18,000, allowance £11,000, taxable £7,000.  At 20% the tax is £1,400 so pay after tax (ignoring all other deductions) is £16,600.  Increase the tax to 21% and add Kez's £100, taxable is £7,100 and tax is £1491 so pay after tax (ignoring all other deductions) is £16,609 - up £9 over the year.

Your pay is £19,000, allowance £11,000, taxable £8,000.  At 20% the tax is £1,600 so pay after tax (ignoring all other deductions) is £17,400.  Increase the tax to 21% and add Kez's £100, taxable is £8,100 and tax is £1,701 so pay after tax (ignoring all other deductions) is £17,399 - you've lost £1.

Your pay is £18,900, allowance £11,000, taxable £7,900.  At 20% the tax is £1,580 so pay after tax (ignoring all other deductions) is £17,320.  Increase the tax to 21% and add Kez's £100, taxable is £8,000 and tax is £1,680 so pay after tax (ignoring all other deductions) is £17,320 - exactly the same as if they hadn't messed around.

Get paid any less than £18,900 you're gaining a few pennies a week, get paid any more and you're losing out.  Let's be charitable and say that Kez's team just never realised that a payment from a Scottish administration would be taxed.  Someone at Labour's magic £20k threshold would be about £11 down at £19,999 but if they earn an extra quid then they're £90 down because they're now being charged 21% tax but getting no government cash.

The tax rise is unfair
Not all income is taxed on the Scottish rate.  Income from dividends and savings is exempt (in spite of the pretence that the UK and Scotland will have equal dibs on taxation there are parts of the system which will remain entirely in George Osborne's sweaty palm - See page 7 of this) so any lottery winner living off the fruits of investments and interest payments won't be affected by the increase; anyone who inherited wealth and has never had to work a day in their life will get away scot-free, and any company director who takes all or part of their remuneration as a dividend escapes it, too.  Shuggie McDufflecoat pushing a street cleaning barrow eight hours a day gets hit for the whole whack, though, and Senga McDufflecoat operating a supermarket checkout in unsociable hours gets stung as well.

That's not all - even among those on PAYE it's not fair.  Take a look at the Scottish tax rates and the threshold for next year (as they stand at the moment) and you'll see that there's a progression in what you pay - under £11,000 there's no income tax to pay, between £11,000 and £43,000 you pay 20%, up to £161,000 you pay 40% and over that you pay 45%.

So if you earn the £20,000 that just excludes you from Labour's £100 giveaway (some nurses earn about this amount) the figures go like this: £11,000 tax-free so £9,000 to be taxed.  At 20% tax that's £1,800, at 21% it's £1,890.  Tax going up from £1,800 to £1,890 is a 5% rise.

A teacher on £30k -
£30,000 - £11,000 = £19,000 taxable. At 20% the tax is £3,800, at 21% it's £3,990 - a rise of £190 or 5% in tax payable

MSP on £59,089 -
First £11,000 tax-free.  Next £32,000 @ 20% = £6,400 and @21% = £6,720. Next £16,089 @ 40% = £6,435.60 and @ 41% = £6,596.49.  Total tax for an MSP on current system adds up to£12,835.60 and under Labour's proposal £13,316.49 - a rise of £480.89 which is 3.74653307987% - call it a 3.75% rise in tax payable.

Company director on £200,000 -
First £43,000 is the same as an MSP on each tax rate; the next £118,000 @ 40% is £47,200 and @ 41% is £48,380; and the final £39,000 @ 45% is £17,550 and at 46% it's £17,940.  Total tax under the current system is £71,150 and under Labour's new system £73,040 - a rise of £1,890 or 2.66%

So low earners would pay 5% more in tax than they do now, an MSP would only have a 3.75% increase in the tax they pay and the company director 2.66%.  It has a progression but progressive it's not.

The planned bureaucracy is chaotic
The £100 is a tax rebate that can't be a tax rebate. Scottish Parliament doesn't have power to direct HMRC to pay a rebate (or to adjust thresholds or vary rates by different amounts) so Labour proposed using councils to pay the £100 - which makes it a government bung rather than a tax rebate which makes it taxable income which reduces its value to £79 (see above).

Here's a thing, though, councils don't have access to HMRC records so they have no idea who is earning less than £20,000 but also paying tax. Payslips you say? No way of proving that that's the entire income; there are lots of other ways of turning a coin and quite a few people don't have payslips which would prove how much they earn on a regular basis in any case. P60? That's last year's earnings and doesn't show anything about this year's earnings - unless people are expected to wait a year for their £100.

The payment of the £100 is not automatic, either, you would have to toddle down to your local council and claim it or, as one wag put it, "Roll up roll up and win the chance to apply to your local council to get your own money back..." - nice and easy for a parent working full time; or perhaps not ...

Not that we know exactly how the system supposed to work because Labour failed to tell us.

The numbers don't add up
There aren't sources given for the numbers used by Labour to create this Jenga tower of a policy but they give a number or two here and there and they just don't add up.

The original claim was that a 1% rise would raise £500 million and that £50 million would be needed to pay the £100 payments (that would be half a million payments a year) but in the hours after the policy was announced it was expanded by £25 million to encompass pensioners (that'll be 750,000 payments a year in total now), so that's the tax take down to £425 million on Labour's figures.

The Office for Budget Responsibility figures, though, say that Labour's overestimated the tax that would come in from a 1% hike so there's another £10 million out of the pot - down to £415 million. If you want to understand how the OBR got to its projection I'd recommend reading the original forecasting methodology booklet. We can't say whether this is enough to satisfy Labour's spending commitments for this tax rise because the spending was never actually laid out but we can say that losing £35 million in a couple of hours is a bit careless when you're asking people to trust you with more of their money.

Then there's the cost of administering the £100 that people have got to claim back through their council. It wasn't clear at first what the proposed costs were but it became clear when Kezia got into a Twitter spat with an SNP candidate - 

Quite why she was bothering with such a biffing back and forth with a first-time candidate instead of getting on with her job of annoying the Scottish Government and leading Labour I've no idea but the £1 million admin cost is simply not credible. Those Discretionary Housing Payments (DHP) are payments towards housing costs. It's the mechanism by which the Scottish Government mitigates the cuts in Housing Benefit known as the bedroom tax, among other things.

Total DHP in Scotland is less than £40m (limited by Department of Work and Pensions rules) and covers housing costs in areas where councils will already have substantial information on claimants (you have to be claiming Housing Benefit which you claim through your council or the housing element of Universal Credit to get a DHP) and can process them in a fairly straightforward manner, fitting them into existing claims in most instances. Councils have no data or method of collecting data for the £100 and there will be many more claimants (if people can find the time) but Kezia reckons that it will be much cheaper to administer the more complicated scheme. It may be that there is magic in the air but the truth is more likely to be that it's not possible.

Labour isn't serious
On the day that Stage 1 of the Budget was in Parliament Labour MSPs were outside at a demo trying to make headlines instead of being inside in the committees scrutinising the budget. Kevin Stewart MSP raised it during the Budget debate :  
Does James Kelly not acknowledge that this morning the cabinet secretary was at the Local Government and Regeneration Committee and then the Finance Committee for those committees’ budget scrutiny? Only one Labour member turned up at the Local Government and Regeneration Committee, and that member asked only one question. Is Labour really so bothered about all this? - See more at:

Does James Kelly not acknowledge that this morning the cabinet secretary was at the Local Government and Regeneration Committee and then the Finance Committee for those committees’ budget scrutiny? Only one Labour member turned up at the Local Government and Regeneration Committee, and that member asked only one question. Is Labour really so bothered about all this?

Does James Kelly not acknowledge that this morning the cabinet secretary was at the Local Government and Regeneration Committee and then the Finance Committee for those committees’ budget scrutiny? Only one Labour member turned up at the Local Government and Regeneration Committee, and that member asked only one question. Is Labour really so bothered about all this? - See more at:
Does James Kelly not acknowledge that this morning the cabinet secretary was at the Local Government and Regeneration Committee and then the Finance Committee for those committees’ budget scrutiny? Only one Labour member turned up at the Local Government and Regeneration Committee, and that member asked only one question. Is Labour really so bothered about all this? - See more at:

Labour's Deputy Leader only mentioned the policy when he was asked about it and spent much more of his speech praising the SNP Scottish Government (no, I don't think he's preparing a leadership challenge), perhaps displaying a bit more of the strategic thinking that Labour will have to do.

If there was serious intent behind this policy it would have been laid out well in advance with plenty detail but it wasn't. No Labour speaker yesterday mentioned amending the Budget Bill - this may be because they are infamously useless at it, most famously Iain Gray having an amendment for additional apprenticeships accepted by the Government and then whipping Labour MSPs to vote against it.

The £100 payment is supposed to be 
an annual payment of £100 for every household paying tax and earning under £20,000
so a couple both earning would have to have a joint income of less than £20,000 to qualify for the bung (they'd get the tax rise in any case).

There's nothing to indicate what the rules are for houses in multiple occupation where a fairly hefty chunk of young professionals (certainly in Edinburgh) live while they are saving to try to get on in life so you could have three or four people earning less than £20,000 each getting hit with a tax rise while they're trying to make ends meet.

It's serious
This is a serious issue - I'm in favour of raising income tax but this scheme would hurt a lot of people without delivering the resources Scotland needs. I'd quite happily see tax raised on higher rate taxpayers and additional rate taxpayers but I can't see any justification for upping the basic rate for the low paid. If we had proper control we could, of course, create other rates, adjust the thresholds, change the allowances and so on - but we don't have control. You can blame whoever you want for that lack.

The scale of working poverty in Scotland is stark - 360,000 households with at least one person working are living in poverty. That's 10.7% of all working households in Scotland - the workless households and the households where people are economically inactive for other reasons aren't included in this figure. That's the challenge we have to face in a rich nation blessed with advantages. I can see no justification for increasing their income tax, their council tax or any other tax they have to pay until they have the chance of a lifestyle that is at least decent.

Labour has the chance to bring forward an amendment to the budget and to put this proposal in its manifesto. Neither would be good for Scotland and neither would be good for Labour.