Month: February 2016

We Should Welcome Tax Competition Between Scotland And England

Samuel Hooper1 Comment

Scottish Bank Notes - Scotland Tax Rates

–

Finally, the chance for variety in the United Kingdom’s fiscal policy

There is good news this week for all those who want the United Kingdom to ultimately move in a more federal direction and reconstitute itself as a country where broad swathes of powers are devolved to the four home nations, with only those critical central powers being reserved by Westminster.

The first tentative step on that journey could be about to begin, as Scottish Labour announce that they intend (if elected) to exercise Scotland’s right to vary their income tax rates from the standard UK rates set by the Treasury.

Of course, being Scotland, any divergence will be in an upward direction, as LabourList reports:

Scottish Labour would use devolved powers to raise income tax while ensuring compensation for low paid workers, Kezia Dugdale will reveal today.

In a major speech in Edinburgh this morning, the Scottish Labour leader will set out a clear position to the left of the SNP, by pledging to increase the Scottish rate of income tax to 11p – 1p higher than that proposed by George Osborne and John Swinney. Given the powers mean that income tax rates at each level have to be raised in the same manner, Dugdale will also announce a payment scheme that will boost the salaries of those earning under £20,000 by £100.

Good. It is about time that the United Kingdom saw a greater variety of fiscal policy, and this relatively modest proposal is a good way to start.

However, there are obvious shortcomings. The present mechanism for varying rates is clunky and deliberately difficult to use, with that awkward rule which states that all bands of income tax have to be increased or decreased in lock-step with each other, so that raising the top rate of tax by 1p would also require raising the basic and upper rates by the same degree. This restriction is wrong and unnecessary, and almost worthy of Gordon Brown in its devious childishness.

Why should the Scottish government not have the power to cut the basic rate of income tax but raise the top rate if it so chose? Or why should Scotland be prevented from taking measures to make income tax flatter, if hell froze over and they wanted to move in that direction? There is no just reason for denying Scotland this additional flexibility.

Scottish Rate of Income Tax - Scotland - UK - Fiscal Policy

And yet we should still be glad for this more limited proposal from Scottish Labour, constrained though it is by current laws. Firstly, we should be glad because it will inject an element of real democratic choice into the Scottish elections, and give voters a meaty, substantial policy argument to mull over instead of the endless independence question.

The Spectator celebrates:

Those of you who live in the rest of the UK will have no idea what a relief it is for us Scots to have some real politics to deal with at last. Scottish Labour’s announcement today that it wants to raise income tax for everybody in Scotland is terrific – simply because it means that this year’s election will be a real contest about real policies.

For the first time in years we are going to get an election which is not about the constitution.

[..] So, at last, Scots will face a real, political choice this May. Labour and the Liberal Democrats are on the left, promising to put up taxes and spend more on public services, the SNP is in the middle, promising to do nothing while the Tories are on the right, pledging to reduce taxes, if they can.

Secondly, we should be glad because although the impact of this policy debate will only be felt in Scotland, it may start a debate in the rest of the UK about the advantages of a more federal approach to governance of our union, allowing for variations in key policies to reflect local priorities and sentiments.

Of course, Scotland already has broad powers over healthcare, transport and many other areas of policy – a fact which the Scottish National Party was noticeably quiet about during the referendum campaign, preferring to falsely pretend that the root of all Scotland’s ills lay in Westminster. But such is the prominence of tax policy, felt by nearly everyone, that it is bound to be noticed. And perhaps when people in England, Wales and Northern Ireland see Scotland making adjustments in fiscal policy in line with their local priorities, they will start to make similar demands for fiscal autonomy.

And thirdly, this could be another potentially great opportunity to discredit left-wing orthodoxy on taxation, and begin to cure Scotland of the misguided but prominent notion that steeper taxes and a more harshly redistributive tax regime are the pathway to Utopian social democracy.

The sanctimonious glee with which Scottish Labour yearn to raise taxes is betrayed when Kezia Dugdale says:

We will tear up this SNP budget that simply manages Tory cuts and instead use the power we have to set the Scottish rate of income tax one pence higher than the rate set by George Osborne. This will provide an extra half a billion pounds a year to invest in the future.

It all sounds so wonderful until it actually happens. And then, lo and behold, everybody’s pay packet takes a hit, but any additional revenue which finds its way to government coffers fails to make much of an impact.

In this case, Scottish Labour’s generous estimation is that the move would raise £500 million pounds every year – though one strongly doubts they modelled the likely behavioural impact of this tax change when cooking up their numbers. But even in the unlikely event that this prediction proves to be solid, if all of the proceeds went to bolster education alone (and they won’t), by my calculation it would amount to little more than £700 per child, per year once measures to compensate lower earners hit by the higher tax rate are factored in – hardly the kind of bold spending increase to justify Dugdale’s crusading rhetoric about investing in the future.

Meanwhile, if Scotland raises income tax rates by 1p, the marginal person will decide not to take that job offer and relocate from Manchester to Edinburgh. The marginal person will think again about moving their family or small business north of the border. And since Scottish consumers will have less disposable income in their pockets, the marginal business will go bankrupt or close down. Their numbers may not be great, at first. But Scotland will have become a slightly less competitive place. And northern England will have become slightly more appealing.

But this is good. It is all part of the healthy competition of ideas, which for too long has been suppressed in the United Kingdom by our vastly over-centralised Westminster government. One of the reasons that the SNP have gotten away with their sanctimonious but ineffectual howling at the Evil English Tories for so long has been the absence of any meaningful counterfactual to Conservative policies. With no counterfactual, Labour and the SNP have been able to accuse the Tories of all manner of missteps and claim that their own policies would have been far more beneficial, without any need (or mechanism) to prove their claims.

That time could now be at an end. If the political parties in Scotland become more willing to use the powers of the Scotland Act 2012 to make the kind of biting tax increases that the Scottish people apparently yearn for, we will soon find out whether merrily cranking up the size of the state really does result in a happy population holding hands and singing under a social democratic rainbow, or if it actually leads to something else – the reluctant realisation that there might just be something to conservative fiscal policy after all.

My money is on the latter.

Scotland Income Tax

–

Chart: Scottish Parliament

–

Agree with this article? Violently disagree? Scroll down to leave a comment.

Follow Semi-Partisan Politics on Twitter, Facebook and Medium.

Don’t Mock Bernie Sanders – David Cameron Is A Far Bigger Socialist

Samuel Hooper4 Comments

Spot The Socialist - David Cameron vs Bernie Sanders - Semi Partisan Politics - Sam Hooper

–

Agree with this article? Violently disagree? Scroll down to leave a comment.

Follow Semi-Partisan Politics on Twitter, Facebook and Medium.

The Conscience-Free Conservatives

Samuel Hooper4 Comments

David Cameron - Conservative Party - Coke Zero Conservatives

–

What self-respecting conservative could now bring themselves to support David Cameron’s triangulating, authoritarian, soul-sappingly unambitious Tory party?

Has the time finally come for small-c conservatives to admit that they have been utterly betrayed by Cameronism, and salvage what dignity we have left by deserting David Cameron’s ideology-free Conservative Party?

Pete North argues the case convincingly in an important blog post deserving of wide coverage, in which he excoriates the modern Tory Party for its rootless, centrist managerialism:

If your values are remotely conservative, look around you. We have not seen a reduction in the size of the state. Sure, the registered number of state employees has gone down but that’s because so many functions have been farmed out instead of closed down or truly privatised. Let me remind you that outsourcing is not privatisation – and given the ineptitude of government procurement it’s not going to save you any money either.

Moreover, the so called party of defence has wasted vast sums of money on big ticket toys, most of which barely work and vastly reduce our capability. This is the party that left us without a maritime patrol aircraft and made a pigs ear of procurement.

We have seen back-tracks on free schools and education reforms, u-turns all over the shop, and whatever you might think of welfare, you don’t have to be a foaming leftist to see that it is failing those most in need. Moreover, what is it in your estimation thinks Britain is showing its mettle going grovelling to 27 other states for permission to make a marginal tweak to welfare and immigration policy?

No, the Conservative party is just a continuation of politics-free managerialism, beset by the usual nannying authoritarianism, big spend, high waste massive government and has baulked at any principled reform in the spirit of Mrs Thatcher. At best we can say that Cameron’s conservatives are marginally less dreadful than Miliband’s Labour party would have been.

I must admit that I find myself coming to the same conclusion – I now look at the party of David Cameron and George Osborne and find it utterly indistinguishable from the party of Tony Blair. Neither believe in truly shrinking the state – in fact, both see electoral advantages in keeping it bloated. Neither believe in empowering the individual over the government. And certainly neither believe in the importance of defending the nation state against antidemocratic supranational entities like the European Union.

I haven’t been a member of the Conservative Party since I left Britain for Chicago back in 2010, but when I came back there was little prospect of me rejoining the party for which I campaigned so enthusiastically that year. At the dog end of Gordon Brown’s reign of terror, a fresh Conservative agenda seemed just what the country needed. But after having somehow failed to win that election outright and entering into coalition with the Liberal Democrats, by 2012 it was very clear that in David Cameron we had found ourselves not a new Margaret Thatcher but rather a reanimated Ted Heath.

Of course, you wouldn’t know it from reading the left-wing press or the Left’s loudest voices on social media, all of whom are convinced that David Cameron’s utterly bland, uninteresting government are on an ideological crusade to drown government in the bathtub, trample human rights and sell off Our Blessed NHS to their corporate crony friends.

This would be the same Evil Tory government which has maintained international development spending at 0.7 per cent of GDP while slashing Defence to the bone, which only half rolled back Gordon Brown’s spiteful and unproductive increase in the top rate of income tax, and which ran for re-election on a manifesto pledging a paternalistic, nanny state “plan for every stage of your life”.

But it is on the question of the European Union and Brexit where the Conservative Party are now betraying their principles and their base most grievously, as Pete North points out:

Put simply, if you want to leave the EU, you have already made up your mind that change has to happen and in this there is no room for sentimentality for the brands that used to represent what we believe. Cameron’s empty shell of a party is in no better shape than Labour and if your loyalty to to a brand matters more then you are part of the problem. And that goes double for Ukippers.

If you are a conservative, Cameron is not on your side. He takes you for stupid with phantom vetoes and bogus reforms. This is a man who is lying to us all and treating us with contempt. In the final analysis it’s up to you to decide what it is you really want. If you do want to leave the EU, don’t come bitching to me for pointing out that the Tory Vote Leave operation is catastrophic. Break ranks and take it up with them.

This is absolutely right. The Tory leadership has been indulged and given the benefit of far too many doubts, and the time has come for small-c conservatives to call the bluff of every single sitting Tory MP who has ever uttered a eurosceptic sentiment – and to rain down shame and unrelenting pressure on those whose commitment was false.

Candidate after Conservative candidate won selection by their local association by prancing around as though they were the World’s Biggest Eurosceptic. But now we know that in too many cases, it was all an act. Handed an unexpected majority, a weak opposition and the lucrative prospect of uninterrupted career advancement, too many of the new generation of Conservative MPs are more interested in securing Tory hegemony in government than actually accomplishing any of the things that one might reasonably expect a conservative legislator to do in office.

Hence the sanctimonious, preachy letter signed by 74 of the new Conservative intake, lecturing their older colleagues on the importance of “party unity” and not doing anything to sow divisions during the referendum campaign. But of course, this advice only applies to eurosceptic MPs – europhiles eager to spout David Cameron’s pro-EU lines are unleashed to say and do as they please in their effort to keep Britain inside the EU. It is only the Brexiteers who are muzzled.

One might ordinarily feel sympathy for these older eurosceptic Conservative MPs, being lectured on the importance of putting the party first and not “banging on about Europe” by the new upstart generation of careerists. But then you look at what veteran eurosceptic Tory MPs are actually saying and doing, and any potential sympathy melts away, to be replaced by sheer incredulity that the people who spent twenty years posing as strong critics of Brussels have apparently given no thought at all to how Britain might best leave the European Union.

This could have been the finest hour of politicians like John Redwood, Michael Gove, Daniel Hannan, David Campbell Bannerman and Mark Pritchard. But instead they have either chosen personal loyalty to David Cameron over trifling questions about British democracy and self-determination by campaigning with the Remain side, or they are firing out contradictory statements and half-baked mechanisms for Brexit which are implausible at best, and outright reckless at worst.

And this failure to live up to their rhetoric is not on some trivial issue or arcane policy area, where political horse-trading is to be expected; it is on the single most defining, central question to face the United Kingdom in a generation. On this acid test of conservative principle, nearly all of the “big beast” eurosceptics within the Conservative Party have been found wanting. As few as five (generally second-tier) Tory ministers could end up campaigning for Brexit.

So what possible reason for the failure of the Conservative Party – given the fact that the long awaited referendum could be very imminent – to express anything other than murmurs of approval for David Cameron’s transparent act of political theatre masquerading as a “renegotiation”?

These are the only plausible motivations which come to mind:

1. Despite what Conservative candidates and MPs said when they sought selection and ran for election, they secretly believe in the EU project and want Britain to remain a part of it

2. They lack faith in Britain’s ability to survive or prosper outside the European Union, and this pessimism overrides whatever euroscepticism they have

3. They simply don’t care one way or another

4. They do want to see Britain leave the EU, but they would much rather see their own careers blossom under David Cameron’s patronage than risk isolation by campaigning against the prime minister

None of these possibilities is appealing. And none makes me eager to sprint to my polling station in 2020 to reward them with five more years.

The Conservative candidate in my own constituency of Hampstead and Kilburn (north west London) was a jabbering fool who thought that the EU was simply magnificent, the bedroom tax was actually a tax, and that Britain should unilaterally disarm and get rid of Trident because the United States would do our dirty work for us should the need ever arise. I didn’t vote for him and he didn’t win, because why would the liberal voters of Hampstead vote for a Tory who walks and talks like a Labour candidate when they could just vote for the real thing instead?

But although this breed of Conservative did not manage to win Hampstead & Kilburn in 2015, it is clear that many others did succeed in forming part of the new intake, while a similar number of longer-serving Tory MPs holding the same wishy-washy views entered the parliamentary party in previous elections.

It may sound harsh, but they are all wasting time – ours and theirs. Now is not a time for vacillating centrists and Red Tory / Blue Labour moderates. Now is not a time for fastidious, parsimonious obsession with our public services to the exclusion of all else, or a prime minister who aspires to be a lowly Comptroller of Public Services rather than a world leader. There are still far too many people trapped in welfare dependency or minimum wage drudgery for us to consider pulling up the drawbridge on radical conservative reform.

Steady-as-she-goes Blairism has now reigned for nineteen years, first under the auspices of New Labour and latterly through the coalition years and on into David Cameron’s majority Coke Zero Conservative government. And it is a dull, authoritarian, uninspiring philosophy for government, worthy of a country which has given up on playing any role in shaping human destiny going forward, preferring to jealously obsess over our public services and what’s in it for me, me, me.

I believe that Britain is better than that, and that we still have much to offer the world – particularly if we can now seize this last, best chance to break free of the European Union and rediscover what it means to be an independent, globally engaged, sovereign country once again.

And if achieving this dream means that David Cameron and the Conservative Party in its current form must be circumvented, undermined, sabotaged, attacked and sent to their Armageddon, then so be it. We will have lost nothing.

 

David Cameron - What Do The Conservatives Tories Stand For In The Age Of Jeremy Corbyn

NOTE:

I encourage you to read the entirety of Pete’s article, and to follow his blog. The analysis of the coming EU referendum and Brexit process to be found there is far superior to anything you will find in the mainstream media, and if there was any justice Pete would have the kind of platform and following usually only obtained by the C-student nepotism beneficiaries who seem to win many of the coveted gigs writing for prestige publications.

Reading Pete’s blog in particular can be a good reminder of the optimism behind the Brexit movement, and it is essential when we fight this campaign that we do not sound like dreary bores, cranks or obsessives focussing on the negatives of Brussels. For however dreary and stultifying the European Union may be, we are at our best when we present our compelling vision of a modern, forward-looking, globalised Britain which seeks to embrace the world rather than shutting ourselves off in a protectionist, mid-century regional trading bloc.

–

Agree with this article? Violently disagree? Scroll down to leave a comment.

Follow Semi-Partisan Politics on Twitter, Facebook and Medium.

Time To Get Angry About David Cameron’s Brexit Negotiation Trickery

Samuel Hooper3 Comments

David Cameron - Donald Tusk - 2

–

Whether you are staunchly pro-EU or eager for Brexit, the prime minister is playing the British people for fools with his manufactured last-minute crunch talks with Donald Tusk. Do we really want to reward this kind of behaviour from our politicians?

If the conventional media narrative is to be believed (and it isn’t), David Cameron has secured a “major breakthrough” in his talks with EU leaders on our suddenly-central concern about migrants claiming benefits.

Of course, this “win” consists solely of a so-called “emergency brake” on immigration which could only be applied with the consent of other EU members. And migrants coming to Britain to supposedly claim benefits is so far down the list of things which are egregiously offensive and wrong with the European Union that the whole pantomime is laughable. But this is all that David Cameron has, and much of the media is gamely writing it up as a meaningful event.

From the Telegraph:

[European Council President] Mr Tusk had been due to publish his final offer to the UK today, but has now agreed to hold another 24 hours of talks after Mr Cameron told him that the deal on the table was “not good enough”. The Prime Minister warned Mr Tusk that Britain could vote to leave the EU unless Brussels does more to ensure that the number of foreigners coming to the UK is reduced.

[..] Last week the EU offered Mr Cameron a watered-down version of the “emergency brake” that would allow him to temporarily limit access to benefits – but only if Brussels agrees that UK public services are being strained. It was described by Eurosceptic Tories as a “bad joke” and “an insult to Britain”.

On Sunday night Mr Tusk accepted Mr Cameron’s demand that any “emergency brake” comes into force immediately. It allows Mr Cameron to reject claims that his “emergency brake” will be subject to a veto by Brussels.

Of course, this is being breathlessly talked up by Downing Street:

“It is very significant that they have conceded this,” a Downing Street source said. “They are saying that in the current circumstances, levels of migration into the UK meets the requirement for an emergency brake. It shows that this is not a theoretical brake and that it is something that will definitely happen.”

So because Donald Tusk has generously granted that the “emergency brake” may come into force straight away, we are supposed to gratefully take our crumbs from the table and forget about the fact that as with every other area that David Cameron once airily promised to reassert British sovereignty, the critical decision ultimately rests with Brussels.

What a transparently false and cosmetic exercise this all is. If Donald Tusk was prepared to release his “final offer” to the UK today and is now only delaying publication until tomorrow, no significant changes can possibly be made in that short span of time.

David Cameron may have huffed and puffed and made a great show of telling journalists that the current deal is not “good enough”, but he will secure no more from Donald Tusk. 24 hours is insufficient time for Tusk to hammer out a new deal and get sign-off from the twenty-seven other EU member states, so if anything radically different does appear tomorrow it will have been pre-agreed by the other twenty-seven and almost certainly shared with Cameron too as part of a cosmetic, scripted act of political theatre.

At this stage in the game, Donald Tusk knows what the other EU leaders are willing to concede and David Cameron knows exactly how much he can demand if he wants an agreement to be signed off in order to ram the referendum through by June (and this still seems very improbable to me). The only ones in the dark are the British public, who were never meaningfully consulted before the prime minister jetted off to air our concerns to Brussels – concerns which he never took the time to consult over or understand before embarking on his mission.

As I and many other Brexit bloggers have pointed out for some time, there is no “renegotiation” taking place, nor has there been. But if we must persist in talking in terms of a renegotiation then we should recognise that David Cameron is sitting at the same end of the bargaining table as the other EU leaders, sharing as they do a common goal of keeping Britain within the political union. We, the British people, are at the other end of the table, on our own. Nobody is arguing our case. Meanwhile, our prime minister colludes with his European colleagues to determine precisely how little they can get away with offering while still buying our acquiescence.

Of course, all of this is quite immaterial, depressing though it may be. For there is no change or concession possible which will change the European Union from being an explicitly political, tightening union whose every act and function serves to drain sovereignty and autonomy from its constituent member states and pool it in Brussels, where it can be wielded by politicians who make the Westminster political establishment look like the model of transparency and accountability.

On this point at least, Daniel Hannan is absolutely right when he writes in CapX:

Either way, the ‘row’ between David Cameron and Donald Tusk, which journalists are reporting so breathlessly, is non-existent. There is nothing to have a row about. Either Westminster is still in charge of welfare policy, in which case the PM doesn’t need anyone’s permission to change the rules; or Brussels is, in which case any alteration requires a treaty change which, as all sides now accept, won’t happen for many years.

I realise that reporters have to write something. I’m sure someone somewhere will have been interested to read that the Downing Street menu involved apple and pear crumble. But, please, guys: the whole thing is such an utter, obvious, confection. You can be pro-EU or anti-EU. There are sincere arguments both ways. But let’s not pretend that anything is changing.

But while the back-and-forth with Donald Tusk and the eventual reveal of whatever package they have already cooked up is hardly news, it is still worth reminding ourselves of the lengths to which the British prime minister will go in order to trick the British people into believing that he has radically changed the terms of our EU membership.

And it should rightly make one wonder: if David Cameron can be so manipulative when it comes to the European Union, how can we trust him on any other matter?

EU Referendum - Brexit - Democracy

–

Agree with this article? Violently disagree? Scroll down to leave a comment.

Follow Semi-Partisan Politics on Twitter, Facebook and Medium.