The Powers of the Scotland Bill
The big question with the Scotland Bill is this – are ‘powers’ and ‘power’ the same thing? Is power the ability to do something or the ability to change something? If I have the power to press a button but all it does is put on a light saying ‘stop pressing the button’, am I powerful?
And spoiler alert for those who don’t want to plough through paragraph after paragraph on stuff like the Commissioners of the Northern Lighthouses, ‘powers’ and ‘power’ are not the same things. Much of the media and certainly the anti-independence political parties would like you to gawp at this new array of buttons that the Scotland Bill puts at Scotland’s disposal and will now spend their time demanding to know why the Scottish Government isn’t pressing them all. The Scottish Government has to have the confidence to ignore this background hum – but to do so it must make much bolder use of the real powers it already has.
I want to start by making clear that at Common Weal we are absolutely committed to working on two parallel goals at once. Yes, we are all committed to working in any way we can towards an independent Scotland. But at the same time, we are committed to the social justice cause of arguing for what can be done now. I continue to believe that the next referendum will be in 2021 so that leaves us five years. In the meantime, what is to happen to low-paid workers struggling to make ends meet, those whose benefits have been sanctioned who just aren’t making ends meet at all, small businesses being forced out of business by an economy that is rigged against them, communities which feel powerless to tackle the decline in their social infrastructure?
That was our starting point with the Book of Ideas. We did not set out to prove what couldn’t be done (lengthy though that list is), but rather to find out what could be done, now, with the powers he have or are about to get. So, sceptical as we are about all the motives behind and game-playing around the Scotland Bill, we looked at it seriously to try and figure out what it would let us do that we can’t already.
So let’s start with what we can do with it. The one thing the Scotland Bill does do is give substantial power over income tax. We should not dismiss this. I’ve argued since the establishment of the Scottish Parliament that being able to raise the basic rate of income tax without being able to raise (never mind create) other rates of tax was asking the Parliament to place the burden of any attempt to find new investment in public services disproportionately on those on lower incomes. It was wrong.
But that’s not a complaint I can make any more. Scotland can create new tax bands and these can be powerful. In Scotland we don’t have many of the super-wealthy (they live in London). That’s why, valuable as the symbolism is, raising the 45p tax rate on those earning over £150,000 won’t generate much money. Scotland’s personal income wealth lies in what might be called the ‘upper professions’ and the ‘profitable business sector’, the sort-of £50k to £150k income range. The Scotland Bill, for the first time, allows us to ask that group to make a modest contribution to invest in public services. We’re proposing a tax rise of about two or three pence in the pound on incomes over £50k. It would raise probably around £400m.
I would strongly argue that we should not be sniffy about the income tax powers. They may be designed as a trap, you might not agree with tax rises, but they are real powers and we should take that seriously. The assignment of VAT however is worse than meaningless. I’ve spoken to economists the newspapers would describe as ‘respected’ and ‘mainstream’ who think the proposal is madness. And otherwise that’s pretty well it for tax.
The next area you’re going to be told we have real powers over is welfare. Here I disagree, and pretty strongly. Broadly, Scotland is being given the power to spend but none of the power over policy. For me this is a bit like being put in a corridor with a mad man pulling pins out of grenades and being told you have the ‘power’ to run around after him to catch the grenades and try and put the pins back in. Or perhaps its more like having the ‘power’ to replace all the dishes your children as smashing but not being allowed to tell them to stop it.
It is kind-of power, but it’s power without control. And the consequences are already being felt. We already have a Labour Party (which very clearly doesn’t think it’s getting anywhere near office any time soon) throwing out uncosted policies on restoring cuts in tax credits without even giving the appearance of having thought it through. If you’ve spent all the money you don’t have helping those on tax credits, what about everyone else? Labour seems to me to have almost explicitly said ‘if you’re unemployed, disabled, a carer or on any other form of benefit you’re on your own because we’ve blown all the money we have trying to make the SNP feel uncomfortable’. There is simply not a hope in hell of finding the money to replace all the benefits Osborne is cutting from within the Scottish budget or with what can be raised from income tax rises alone. So someone is going to suffer, and potentially suffer very seriously. It may be clever-clever politics for Labour to pick one of those groups and say ‘we’ll give them the money because it’ll force the SNP to say they’ll do the same’. A sensible, well-rounded policy on the impacts of the UK Government’s war on the poor it most certainly is not.
At Common Weal we tried hard to take a more serious approach, and it was by far the thing that caused the most disagreement and debate in producing the Book of Ideas. We roughly modeled what the £400m we were proposing could be raised by income tax could do on benefit top-ups. You know, £12 for the unemployed, £20 for the disabled and so on. We did this because we fundamentally believe in universality, the philosophy which says people facing poverty should not be means-tested (just to add to their humiliation). But at every turn this approach fell down. For one, as soon as this money is committed, it could never be adjusted. No matter what other dire social consequence Tory rule had on Scotland in the future, we would never be able to redirect that money without the Scottish Parliament taking on the role of ‘cutting benefits’. We have only a fraction of the tax powers Osborne has but we have to absorb 100 per cent of the consequences? The numbers just don’t add up.
But to understand why top-ups are such an unhelpful policy, think about what happens to those who are sanctioned by the Osborne regime and have all their benefits removed (top-up and all). What is to happen to them? All the money would have been spent on top-ups and those sanctioned would be on their own with nothing. That is the inevitable consequence of having the power to pick up the bill but not having the power to change the policy. Benefit top-ups enable you to posture – but it may well come at the price of the ability actually to care for those in most need.
In the end (and against our universalist instincts), we concluded that instead of using top-ups the only option was to create a ‘Scottish Social Security Fund’ that would be flexible enough to really support those in need (be it as a result of cuts in tax credits, Jobseekers Allowance, disability benefits, housing benefits, carers allowance or whatever new terror Osborne decides to inflict) – and be honest enough to admit that it can only mitigate the worst of what is coming.
We actively want to have higher benefits but after months of scratching our heads we can’t work out a way to use the new powers effectively. For me that strikes at the heart of the difference between having ‘powers’ and having ‘power’. Another great example is the changes in regulations over renewables in the Bill – which is almost explicitly the power to make some slight regulatory changes to the development of an industry that Osborne has just killed off through the catastrophic (for Scotland) cut in subsidy support for renewable energy. And as for the rest of the powers, some tidying up, some one-use powers (an aggregate levy here, a transport police transfer there) and some tinkering with legislative process. And that’s about your lot.
(I add one caveat here which is that there may be some creative things which can be done with the new powers over the Crown Estate but we have not yet had time to look at this properly.)
Power is about the ability to affect change. It is not just the ability to ‘do things’. We approached the powers in the Scotland Bill with a genuinely open mind and tried hard to think what we could do with them. Apart from tax, we just couldn’t find anything substantial enough to include.
Government is not about pushing buttons. Government – good government – is about integrated programmes of action. It is about recognising that you live in one of the most unequal countries in the world and that this can only be tackled with industrial democracy policy, macroeconomic policy, monetary policy, employment regulation. It is about realising that we’ve managed the economy in such a way that it has replaced good jobs with bad ones, replaced productive industries with speculative ones. It’s about not being the last person in the room to realise another financial crisis is round the corner and to tackle banking and the national balance of trade. But these are all things that remain well out of Scotland’s reach, powers (and they’re powers with real power) all carefully clutched to Osborne’s chest. It’s not that Scotland can’t do anything about these problems, it’s just that almost everything we can do is already contained within the powers we have. This Bill adds very little.
But then, we’re supposed to be leaving the indyref behind, along with that brief, wonderful moment when Scotland was allowed to think big thoughts and face head-on the big issues facing our economy and our society. The newspapers want you to believe that it’s back to Jack McConnell-era ‘slightly better management of public services’ and with the Scotland Bill unionists seem to believe that we should all be preoccupied debating whether to change the speed limits.
It’s up to the Scottish Government to lift its head up above this morass of mediocrity. The pressure is on to accept that Scotland has become newly powerful. Some in the Scottish Government may be worried that not ‘going with the media crowd’ on this one will look churlish. Don’t be cowed by this. Don’t let Scottish Labour’s half-baked soundbites bounce you into pressing all the new buttons just because they’re there. Step back. Look at all the powers you have (they’re mostly there already). Do something bold and transformational. Push at the limits of the powers you have. The people will quickly realise that this is yet one more false dawn on the road to ‘Home Rule’.