Wednesday, 24 December 2008

Fiscal Autonomy

6.31 The Independent Expert Group concluded that to the extent that a region with full fiscal autonomy is to all intents and purposes independent, full fiscal autonomy is not consistent with the maintenance of the Union; the Commission agrees.
- Calman Commission, First Report, Page 64

However, as this post on the Tartan Army Message Board makes clear, the former part of that sentence would then mean that the following British Crown Dependencies and UK Overseas Territories have just been declared independent by the Calman Commission because they have fiscal autonomy:
It is the former part of the quoted sentence - "full fiscal autonomy is not consistent with the maintenance of the Union" - that gives the game away for the above dependencies and territories are not part of the UK whilst remaining united with the UK.

It is a case that shows that the Calman Commission is not addressing the issue of unity but retention of the constitutional legal position that retains power at Westminster.

It is avoiding addressing the issue of what is best for Scotland in terms of taxation but what is best in retaining the constitutional status quo of power at Westminster. It allows for the continuation of taxes to be set at Westminster regardless of whether their effect would be detrimental or beneficial to Scotland.

Since none of the examples above send MPs to Westminster it is retaining the partisan position that is the priority for the political parties involved.

However even that position is not under threat when one considers that the dependencies and territories pay for those matters they do not exercise such as defence and foreign affairs. The question could be asked why they are not given that privilege to send MPs to Westminster to represent them on those issues?

As Kenny Farquharson points out - "Calman seems determined to take on a bigger challenge – a constitutional version of the Theory of Everything". So if Calman can extend his remit why has he not addressed that issue unless it is to focus on retaining the Westminster power status quo?

And even if it were just to focus on Scotland as a part of the core state why is the Basque model of fiscal autonomy overlooked? Is it because such examples would embarrass the participating parties who have tried to argue that no such examples exist (even although they do within the British orbit)?

*** UPDATE ***

Interesting to see that Gordon Brown thinks "tax competition" is a good thing even within states.

"Competition between tax systems exists in the United States of America even where they have not just a single currency but a federal state. So far from the single currency requiring tax harmonisation, it is becoming generally recognised that tax competition is an essential element of the economic reform agenda. It can encourage innovation and thus more efficient ways of raising revenues; can help cut through bureaucracy and reduce compliance costs; and while tax competition must be fair and above board - the UK is working with our international partners to root out unfair and discriminatory tax competition - tax competition allows governments to respond to national preferences on the role, structure and aims of taxation."
So why the foot dragging on matters fiscally Scottish since, in his own words, it can "encourage innovation and thus more efficient ways of raising revenues; can help cut through bureaucracy and reduce compliance costs; and ... allows governments to respond to national preferences on the role, structure and aims of taxation."


Because after reading this post on Calum Cashley's blog and this post on the Tartan Army Message Board I decided to read the report for myself.

And my thoughts? Well I thought there were a lot more issues within the report that needed airing. Why? Because for something that is meant to be an "independent" report, and one the taxpayer pays for, I believe it should be factually correct and impeccably upfront and honest in its intentions.

I don't believe it is as the two posts I have referred to above show. It is historically inaccurate and its remit "to secure the position of Scotland within the United Kingdom" never spells out clearly what it means by that "union". In short the Parliamentary union of 1707 which placed the sovereign power over lives at Westminster and still does to this day despite devolution. A "union" that is far cry from the concept that is often perceived of a partnership of four equal nations; a concept which I, as an SNP voter, feel not only comfortable with but supportive. A union of unity.

However that is not the "union" the Calman Commission is "securing". It is the one that totally centralises ultimate power in the hands of 650 individuals at Westminster only 59 of which are there to represent Scotland's interests - and even then they are subject to party prejudice. Rather than a union of unity it is a "union" for competing partisan power brokers. As Winston Churchill said of the UK in 1909:

Look at our neighbour and friendly rival Germany. I see that great State organised for peace and organised for war to a degree to which we cannot pretend. We are not organised as a nation, so far as I can see, for anything except party politics
It is that political partisanship which creates a fog around the concept of the centralised "union" of Westminster sovereignty. A fog which misleads about the Calman Commission and hence why we have, I suspect, the likes of Kenny Farquharson getting the impression that it is about the devolution of more responsibilities to make life better in Scotland when it is actually about protecting that "union" which dare not speak its name.

A "union" to which Calman Commission has co-opted other unions and institutions on to as if they are integral to that "union" of Westminster sovereignty. The fact is they are either not or their existence is not threatened by the "union" of Westminster sovereignty no longer continuing.

However saying all that should not be read as the members of the Calman Commission are somehow complicit in a deceit. I don't believe they are. Sir Kenneth Calman is simply acting under the remit he has been given and I believe many of the members are actually supporters of a union of unity rather than a "union" for partisan power brokers.

In short it would be good if they (and the parties that set it up) were questioned on what union they believe in.

One that keeps all sovereign power at Westminster - like Labour and the Tories - where devolution can be ultimately overruled or even abolished by Westminster?

One - like the Liberal Democrats - where sovereignty is shared on a federal basis between Westminster and Scotland but where Westminster superior?

Or one - like the SNP's - where sovereignty lies in Scotland but that institutions and responsibilities can be shared with other nations in the British Isles on the basis of mutual agreement?

Then there is the fundamental question that appears to be amiss from the Commission's remit? Are their deliberations about what is best for Scotland or best for the "union"?

Saying both are indivisible won't wash as no man (or woman) can ride two horses at the same time. But more on that later.