Budget issue is Westminster’s fault – but here’s what Scotland can do

But though it is always easy to blame someone else, the inconvenient truth is that it is, ultimately, the fault of Westminster.

It is an inescapable fact that taxes exist to pay for public services in all their forms. Human civilisation has developed due to our sense of community and social adhesion and that means mutual support, which itself means that everyone contributes according to their means. But this does not preclude people being wealthy.

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There is a contradiction in current UK policy of complaining about the consequences of service cuts but at the same time demanding reduced taxation. It is not possible to have both. Cutting taxes means less money for services, which means queues in hospitals, lack of ambulances, reduced police presence, council cutbacks and more. There is no avoiding this fact. Yes, austerity was necessary after 2008, but continuing that for the past 14 years has led to public services being where we are, compounded by the self-inflicted whammy of Brexit during the pandemic.

The Westminster concept of moving taxation on to personal expenditure is the direct cause of the problem, and underpins austerity itself. This idea is at the heart of trickle-down, which is predicated on the assumption that those with the most pay more.

Sadly, this is not the case, and the low-paid and middle-income families pay a far greater proportion of their available incomes in tax than the wealthy. The reason for this is the transfer of that excess wealth into offshore bank accounts and trusts where it does no good for the economy as a whole. We have ample evidence over the past 14 years that clearly demonstrates that trickle-down does not and cannot work. What is inescapable is that trickle-up works because everyone takes some benefit from the flow of money upwards.

And to return to the trope, yes it is Westminster’s “fault”. We pay our taxes for public services to HM Treasury and they are allocated to the devolved nations by the Chancellor of the Exchequer broadly on a population pro-rata basis. Therefore, Holyrood, the Senedd (below) and Stormont have to manage their services based on what they are given. None of the devolved administrations have any substantial power to gain additional funding or even manage significant parts of the wider economy to any great extent.

In effect, due to the population disparity, whatever England votes for is what the other nations have to follow. While economic development may be devolved, the opposition parties complain that not enough is being done. But on what basis, and how? As well as the consequences of the English-imposed Brexit that has and was predicted to harm economic development, 50% or so of any potential Scottish development benefits get retained by Westminster anyway.

It should be noted that on many measures, Scotland is managing things better than England, and while we complain about things here, they are usually worse there. That doesn’t mean we should accept low standards but principally, we need to reflect how bad things would be without devolution. We would again be directed by an autocratic Secretary of State, subject to the direct unchallengeable whims of whoever is in power at Westminster. As we know (and also often forget), the voting system for Holyrood was based on achieving compromise by a collaborative means, not the adversarial system at Westminster. Therefore, it is appropriate for Holyrood to engage in constructive debate, rather than the imported yah-boo example down south.

The principal devolution problem is that England does not have its own administration detached from a whole UK Government. Our devolved opposition parties miss the opportunity to engage with their colleagues at Westminster and instead turn their complaints to Holyrood. In this, the so-called block grant is misunderstood – it is not charity given to us for nothing to keep us quiet but a proportion of our taxes. Returning to the issue of austerity – future “growth” which may or usually may not occur does not and cannot pay for service improvements now.

Opposition parties would do much better by applying pressure on their counterparts in the Treasury instead of continually running us down. That way their criticisms may have some validity and purpose. Holyrood is about doing best for the people of Scotland not as some launch pad for British power politics. What they also forget is that if the SNP weren’t running the administration, it would be one of them faced with the problem!
Nick Cole
Meigle, Perthshire