What The Gord Giveth, The Gord Taketh Away

As threatened/promised, this month's article from the Scots Independent newspaper on the 10p tax rate.

Those who pay close attention to the deductions on their pay slips will likely have noticed a bit of a difference this month. Although it's been long in the pipeline having been announced by Gordon Brown in his 2007 Budget, as of 6 April this year, the basic rate of income tax was cut from 22p to 20p, with the 10p starting rate of tax being abolished to pay for it.

Overall, the effect to the UK public finances was fairly limited. The move from 22p-20p will reduce revenues by roughly £9.6bn, while the abolition of the 10p band – which doubles the starting rate of tax - is expected to bring in £8.6bn. However, the impact on the lowest paid will be anything other than limited. Overall, it's estimated that some 5.3m people – 500,000 in Scotland, including some 324,000 Scots who paid only the 10p rate - will be made worse off by the change.

The main winners according to the Institute for Fiscal Studies, will be anyone earning over £18,500. The main losers will be anyone earning less than £18,500 and who either doesn’t claim or is ineligible for tax credits. By way of an example, the changes will see a Labour MP who voted the measure through some £300 better off, while a cleaner earning £7,500 would lose out to the tune of £150 each year. Avanti popolo... it’s a wonder, frankly, that any Labour MPs feel able to look many of the House of Commons staff, who serve them daily, in the eye at present.

Yet in wrapping herself in the red flag and presenting herself as the socialist 'first line of defence', Wendy Alexander stood up at her party's Aviemore shindig to claim that “when you strip away the spin it's clear where the SNP stand. It is not on the side of those who believe in progressive taxation and public spending - but with those who favour tax cuts for the rich and what’s left for the rest”. Ladies and gentlemen, from that single sentence, I think we can diagnose with some certainty that even in opposition, Ms Alexander continues to suffer from the most acute of irony deficiencies.

The disconnect between her words and the actions of her party is jaw-dropping in its audacity and shamelessness. So consumed seem to be some in the Labour party with their own sense of righteousness that they believe themselves incapable of doing anything unjust. ‘We are the people’s party’, they say. ‘Our historic mission leads us to believe in social justice. Therefore, everything we do is, by definition, socially just and for the good of the people’.

In fact, listening to the Prime Minister, he’s even using his proprietorial demeanour to justify the fact that some people may be left worse off by the change. Graciously acknowledging the “debate” his change has provoked, Brown told the STUC in Inverness that "We have done more as a Government in the last 50 years for poverty than any other government”. Leaving aside the fact this sentence can be taken in two very different ways, the attitude seems to be that what the Gord giveth, the Gord can taketh away.

Luckily, most of Scotland moved on from that sort of tribalist mindset last year, leaving Labour to gnash its gums and weep and wail in the burning lakes of growing electoral indifference. Luckily also, at least for viewers in Scotland, is the fact that there’s an SNP government determined not just to deliver improvements in services, but also to let people keep more of their own earnings in their pockets.

While prescription charges go up by 25p in England, they’re coming DOWN by £1.85 in Scotland. Council tax has been frozen for the term of the Parliament. Payments for free personal care are being uplifted in line with inflation. The iniquitous ‘graduate endowment’ tax of £2,289 has been scrapped. Tolls have been removed on the Forth and Tay Road Bridges. A £73m tax cut is in the pipeline for 150,000 of Scotland’s small businesses, which will promote economic growth and help revitalise our town centres. All of this has been delivered in the first year of an SNP government, in the teeth of bitter opposition from the self-proclaimed people’s party.

So, while one party huffs and puffs about social justice and prosperity, there’s a party in Scotland getting on with actively delivering it. Judging by the opinion polls, it’s an approach which is finding favour with the Scottish public, in terms of approval ratings and support for both Holyrood and Westminster elections. Crucially, people now seem to be more open than at any other time in recent history to consider the arguments for Independence. That doesn’t make independence inevitable by any means, but it does mean that there is a momentum building towards further powers which will be increasingly difficult for anyone to stop.

I’m sure that scrapping the 10p rate must have seemed like a good idea at the time. After all, very few politicians would press ahead with something they knew to be a rotten idea. However, this measure has finally undermined for all time the argument that a Labour government in Westminster is in any way a guarantor for the interests of the lowest paid in Scotland.

Wendy Alexander’s argument about the Labour party being a ‘first line of defence’ has been completely shot through. How ironic it would be if, set against the achievements of the SNP government in Edinburgh, this measure were to be the spur for Labour’s remaining pro-independence voters to take the final step towards the SNP. This is a potent retort to a perennial unionist question which few of their number ever want to hear an answer to. It’s 10p, it’s arrived on a payslip near you - it’s the cost of not being independent.

S&I Elsewhere - destiNATION

I'd like to tap the side of my glass and bring you all to order for a brief moment, for I have a couple of announcements to make.

First of all, a happy St George's day to one and all. With any luck, there'll be roast beef in the canteen, and I may even sink away a pint or two of Boddingtons, or London Pride if I can't find any of that, after work as I watch Manchester Utd take on Barcelona in the Nou Camp.


Now, the main business. My good friend and former colleague, Julie Hepburn, she of the 'Bid for Freeedom' blog; SNP Westminster Candidate for Cumbernauld & Kilsyth; wife of Jamie Hepburn MSP and all round good egg, has embarked on a new project. As if she didn't have enough to do already...

It's a website called destiNATION Scotland, which in her words is intended to be "an online forum for progressive political debate from a pro-independence perspective". The idea being to pull together articles, and prompt an online policy debate in Scotland, without having to pay over much heed to the restriction of the present powers of Holyrood.


If you have time, go take a look. If you can bear it, I've contributed an article on local taxation - some of my arguments you may be familiar with from previous posts, but don't hold that against it :-)

I've also been busy writing for the 'Scots Independent' newspaper, this time on the 10p tax rate fiasco. I'll post it here once the paper comes out, but in the meantime, do please go and read what Labour blogger Kezia Dugdale has to say on the subject. I admire her for regularly sticking her head above the parapet, but would it be uncharitable to suggest that for all the spit and fire, there's maybe just the hint of an element of her trying to persuade herself here that it isn't as bad as it seems?

Anyway, here's a quote from the 1997 Labour manifesto, which is worth dwelling on for a moment:

"Our long-term objective is a lower starting rate of income tax of ten pence in the pound. Reducing the high marginal rates at the bottom end of the earning scale - often 70 or 80 per cent - is not only fair but desirable to encourage employment. This goal will benefit the many, not the few".

Couldn't have put it better myself...