Never mind their recommendations – the Calman Commission has questions to answer
Stephen Maxwell, TfN
Of the forty odd proposals of the Calman Commission on Scottish devolution the one that has attracted most media coverage is for the Scottish Parliament to be given a power – and a very strong incentive – to set its own income tax rate.
The UK Government should reduce income tax rates in Scotland by 10 pence and cut its block grant to Scotland by the corresponding amount leaving the Scottish Parliament to compensate for its reduced income by levying its own income tax rate. With the transfer of some other lesser taxes to Scottish control this change would give the Scottish Parliament control of about one third of its total income.
How far these proposals would go to meet the Parliament’s accountability deficit is debatable. The Parliament has declined to use its existing power to vary the standard rate of income tax levied in Scotland by 3p up or down, for rather obvious reasons.
Income tax is the most sensitive of all taxes politically and the current power is restricted to the standard rate leaving the tax rate for higher incomes entirely in Westminster’s control. Under the new proposal the Scottish tax would apply to the higher tax band but at the same rate as to the standard band. The temptation for future Parliaments to play safe politically by striking the same standard tax as the Westminster Government in Scotland and then blame funding shortfalls on the inadequacy of the Westminster block grant covering two thirds of the Scottish budget will remain strong, particularly as the commission rejects any Scottish claim on oil revenues, which are likely to be on a rising trend even as UK public expenditure including Scotland’s block grant is severely cut back.
There are some recommendations of specific interest to Scottish voluntary organisations. Campaigners will welcome the devolution of control on airguns, speed limits and drink driving limits. There is a proposal that the discretionary element of the Social Fund, with a £430m Scottish budget, should be considered for devolution. So much for the pluses.
The minuses are more numerous.
Voluntary organisations’ claims for varying degrees of devolution of Housing Benefit and other welfare budgets, labour market programmes and health and safety are rejected.
Some health campaigners will be disappointed that devolution of food content and labelling is ruled out. SCVO’s proposal that Scotland’s share of the Lottery’s good causes budget be protected against raids by UK Ministers (think London Olympics) by requiring agreement from the Scottish Parliament is not even referenced in the Commission’s haste to label current Lottery processes as hunky dory. Perhaps the most surprising proposal is for the transfer back to Westminster of key elements of charity legislation and for charities registered elsewhere in the UK to be able to operate in Scotland free of distinctive Scottish regulation. Pop goes the Charities Scotland Act 2005.
Beyond the rights and wrongs of specific recommendations lie some questions about the commission’s credibility. For example. its case for re-reserving charity law to Westminster is supported by a claim that ‘a number of organisations’ raised the issue with the commission. But the only UK wide charity which submitted written evidence made no reference to the issue. Only the Institute of Chartered Accountants Scotland and an independent academic raised the issue and then briefly. Yet they prevailed against the submissions of OSCR as regulator and of SCVO as the main representative body of Scottish charities to the effect that the new cross border arrangements were bedding down well.
On the wider devolution issues a reader of a good sample of the submissions is likely to be puzzled by a gap between the reforming thrust of the submissions and the conservatism of the commission’s deliverance.
A second question arises on the political reaction to the commission. The Westminster parties which created the commission seem to have endorsed its central proposals within days if not hours. There has even been a headline report that the Prime Minister wants to legislate at Westminster within ten months, prior to the UK General Election.
Whatever happened to open, participative government giving the public the opportunity to express its views? Perhaps it is time to remember that the commission was a body of fifteen party political appointees (eleven of whom are holders of titles or other baubles from the British state) without any more representative legitimacy than any other fifteen of Scotland’s citizens.