Here's how it was set up in the Calman Commission. The mechanism of who pays who and how may be different in the actual bill but the amounts remain the same.
The Scottish Government will be funded by taking 10p out of every Scottish taxpayer and tax band. That 10p element taken from the total income tax base in Scotland will be made up to the Barnett Formula by the addition of a block grant element calculated by Westminster.
The Scottish Government now also has a new variable income tax rate to play with under Calman of 10p rather than the current 3p. If they reduce income tax by 10p in the pound then they effectively refund all the tax monies they get back to the tax payer but the block grant remains the same. If they increase income tax by 10p in the pound then they get double the income tax cut out of everyone in Scotland but the block grant still remains the same. The block grant element is always based on the assumption that Scots are paying the same tax as the rest of the UK. It is calculated by Westminster on the basis that the Scottish Government takes their 10p worth of tax, no more or no less whether or not they decide to raise or lower the actual income tax rates in Scotland.
This funding mechanism has a consequence and whether it is intentional or unintentional is a matter of opinion.
Forget about the 10p variable rate for this part as it assumes the Scottish Government keeps the tax rates at the same level as the rest of the UK. Since the 10p in the pound element for the government varies with the economy and the size of the total income tax base then the block grant element is reviewed now and again, although we don't know how often yet, to ensure that the 10p tax element and the block grant element of funding don't diverge from the Barnett formula too far up or down.
This means that if the income tax base grows the block grant is cut. If the income tax base falls the block grant is increased. Even if the Scottish Government could influence the economy there would be no point because they always get close to the Barnett formula because the block grant element is always recalculated to do that. Any additional monies would just go to Westminter. It's a recipe for Scottish Governments to sit on their hands and makes a mockery of the, "accountability", part of Calman.
What Calman does: 1. It gives Scotland a 10p SVR not a 3p one.
2. It bases part of Scotland's funding on the volatile income tax base so the amount of money coming in each year is uncertain between block grant reviews.
3. If the Scottish economy grows the Scottish Government gets no more money, if the Scottish economy shrinks the Scottish Government gets no less money.
4. Scotland still gets the Barnett formula amount of funding from Westminster.
However, it was entirely legitimate to pursue the issue of fiscal autonomy, given that it is the suggested alternative to the measures in the Scotland Bill and has been advocated by the Scottish Government, drawing upon work by the two profs. More to the point, there is now a substantial argument about the evidence offered - and the Scottish government interpretation.
It was not legitimate to pursue the issue of fiscal autonomy as an alternative because this was the wrong place and time to do it. Fiscal autonomy is not in the bill and it wasn't a recommendation from the Calman Commission whose output was used as the basis of the bill and in fact it wasn't even discussed in the Calman Commission.
Wendy Alexander tried to use the committee to prove that the evidence in the paper that Professors Scott and Hughes Hallet wrote and that the Scottish Government used to call for fiscal autonomy was flawed. What she did was to use the committee as a platform not to gather evidence on the Scotland Bill but as a platform to attack an alternative to the Scotland Bill put forward by the Scottish Government. It was an odd way to scrutinise a bill. She wasn't interested in comparing the economic provisions in the Scotland Bill with the current methods used in the financing of Scotland but was focused entirely on trying to discredit both the professors and the Scottish Government's alternative. I don't know of many bill committees where the convener's focus is not on the provisions in a bill but on alternative proposals which haven't made it into the bill in an attempt to either justify or obscure the actual contents of the bill in question.
In their joint opening statement Professor Drew Scott said, "However, before I do so, I want to make two contextual points for the sake of clarity. First, as economists, we have focused exclusively on the economic implications of the bill's financial provisions as set out in the accompanying command paper. In our evidence, we do not comment on any other aspects of the bill or on the political or constitutional implications of the proposed funding regime.
Secondly, our evidence presents an economic analysis of the Scotland Bill's provisions. We do not offer any commentary on the relative or absolute merits of alternative financial arrangements, including fiscal autonomy, which we have written about quite extensively. I say this for two reasons: first, as we understand it, the committee's purpose is to examine the Scotland Bill, not alternatives to it; and, secondly, we want to alert the committee to the fact that, when we invoke comparisons either implicitly or explicitly in our evidence, our comparator is the status quo ante—in other words, what we have just now or what one might call the full Barnett model."
In a nutshell they said 1. We're only going to look at the economic aspects of the bill 2. We're not going to talk about alternatives to the bill such as fiscal autonomy 3. We're only going to compare the bill to the current funding arrangement.
And straight after that opening statement Wendy went into full swing about fiscal autonomy. It can only be assumed that from the preparation she had done and from the fact that she ignored their opening statement that she had planned to use the committee to avoid discussion of the Scotland Bill and to attack the both Professors and the Scottish Government and their alternative from the outset. This wasn't a discussion which had veered towards fiscal autonomy during the presentation by the professors but was a deliberate and staged use of the committee for party political gain and to avoid evidence from those critical of the bill.
This blog post actually follows the script that Wendy Alexander followed in the Committee. Firstly the focus on fiscal autonomy not on the contents of the Scotland Bill and secondly by trying to throw doubt on the figures in the paper written by Scott and Hughes Hallet and used by the Scottish Government.
Though the order says party descriptions are not permitted on the constituency ballot paper and must come second on the regional ballot paper any registered party can prefix their registered name with the word, "Scottish", which then appears in full on both ballot papers as if it was the genuine registered name of the party.
What that means is that though the SNP cannot now use the party description of, "Alex Salmond for First Minister", on the constituency ballot paper and have to place it second on the regional ballot paper the Labour Party, Conservative Party and the Liberal Democrats have all been given a back door to use their party descriptions both on the constituency ballot paper and in first place on the regional ballot paper.
That's British democracy for you. It must have hurt the three unionist parties when they were forced to stop using the prefix, "Scottish", on the European election paper.
Most right-wing parties use patriotism and national identity as an element of their identity but as Brian points out, they're patriotic about the wrong country in Scotland. Parties on the right are also usually very establishment and are loyal not only to the country but to the establishment and traditions in that country, whether it is the flag, the monarchy or its governmental institutions.
It's actually more difficult for the Tories than you might think as the political situation in Scotland is complicated by the fact it is part of a state made up of various historical nations. The SNP have made themselves the patriotic Scottish party while at the same time being anti-establishment and Labour, though once anti-establishment a long, long time ago, have now become the defenders of the Union and the party of the British State and Establishment.
Both of the customary planks used in the political identity of a right wing party have been usurped by others. The Tories have simply been squeezed out.
Branching out11:30am on 26 Nov 2010#8 Wee Scamp The problem of persuading the Tories to support a lot of financial autonomy or even independence for Scotland is that you're not persuading a Scottish Party of the merits of either as there is no Scottish Conservative Party and as I point out above all "Scottish" policies have to be approved by the Conservative Party leadership.
Unless the Conservative Party as a whole changes its view about granting a large degree of financial autonomy to Scotland or even to Scottish Independence these ideas will never become policy in the Scottish region of the Tories.
If Conservatives in Scotland break away and form their own party, which is very unlikely, then you might have a chance of them agreeing to these ideas but there will be snowfights in hell before that happens.
3% on income tax using SVR would raise "approximately £1 billion" according to John Swinney earlier this year.
Yes, quite correct. I should have re-checked my figures before posting. All the revised sum does is shift the need to raise Council Tax and Business Rates by 20% to the next year. With the new figures, by year 5 the Council Tax and Business Rates will need be raised by approximately 90% not 100% to cover the shortfall.
The Treasury estimate in Budget 2009 is in Chapter A, A10, p156.
If income tax went up by 3p in the pound that would mean an increase of £321,510,000 in funding for the Scottish Government.
Since the projected cut in the block grant is going to be in the region of 3%, around a £1,000 Million, then as the income tax increase will only cover about a third of the shortfall the only way to make up the rest is to increase Council Tax and Business rates in order to fill the gap. That could only be done with Council Tax and Business Rates increases of around 20%.
Nothing the Scottish Government did in the past with the income tax powers or with Council tax and Business Rates have had any impact on the current economic situation and any increases will only burden Scots with much higher taxes than the rest of the UK and slow down Scotland's economic recovery. Remember that any increases in income tax, council tax or business rates would only be to keep services as they are not to improve anything and the other important thing to remember is the assumption that the block grant is going to be cut year on year for the next five years by roughly the same percentage. At the end of five years since the 3p in the pound revenue from the income tax is going to be unchanged the only way to make up the shortfall would be with Council Tax and Business rate increases of at least 100%.
Labour are going to fight the next election based on some mad idea that they will in some way be able to protect Scotland from the coming cuts in funding from central government and since 1 in 8 in Scotland appear to believe that the cuts are in fact the fault of the SNP they may actually get away with it. The only way to escape the cuts is for Scotland to become independent and the SNP must point out that the Labour mantra is better Tory cuts than independence.
"So we both agree that Wee-Scamp doesn't know what he's talking about."
Well, I would agree with wee-scamp that the carriers are limited but I'd say the main problem is not that they can't land other NATO carrier aircraft it's that they can't launch them again which is pretty much the same thing unless you're just collecting them for storage.
The JSF won't be cancelled but the carriers are not involved with the main JSF progam just with the problematic VSTOL F-35B variant and if they are cancelled or the Government decides that they are just too expensive then the carriers will be floating helicopter platforms.
No-one's managed to build an electric launch catapult yet and a "navalised" version of the Typhoon has never been on the cards.
In May 2001 Sir Robert Walmsley, Head of the Defence Procurement Agency, when asked about the possibility of a navalised Eurofighter if JSF was cancelled said: "It is not currently designed so that it could use a carrier. We could change the design but we would be faced with a huge piece of work. The materials would probably have to be changed in order to avoid corrosion; the weight of the undercarriage would have to be doubled to support carrier landing which would eat into the payload margin; and the wing roots would have to be strengthened in order to take the full inertia forces on landing. That sounds to me like a very substantial redesign. It is always possible, but it would cost a huge amount of money and it would certainly add very considerably to the cost of the aircraft".
The problem with the new carriers is that they are designed for a Vertical Take-Off and Landing (VSTOL) aircraft, namely the F-35B version of the JSF. They don't have catapults because they don't need them with VSTOL aircraft.
They have been designed with the ability to retrofit a catapult but that brings up a further problem. They are not propelled by steam but by a gas turbine/electric drive system so they don't have steam to drive a conventional catapult. They can either go with an electrically driven catapult, but no-one's built a working model yet, or they can retrofit a bulky steam generator and water supply so they can use a standard steam catapult which will cause its own problems. In their present configuration they will only be able to fly harriers if the F35-B is cancelled and that's a big problem because the harrier is being phased out.
1. Four NATO countries have carriers: UK, USA, France and Italy. Yes.
2. RN carriers can and will be able to land US Harriers, JSF's (which are slowly replacing USN's F-18s and will also be in service with the RN) and all helicopters. They will be able to land JSF's but only launch the F-35B VSTOL variant. The F-35C conventional carrier variant can't launch without a catapult. The F-35B is not replacement for the F-18, that's being replaced by the JSF F-35A and F-35C which are not VSTOL.
3. Our carriers can and will land all Italian naval aircraft; fighters and helicopters. That's because the Italian naval air arm use Harrier AV8's.
4. The next French carrier is the same design as the UK carriers. There are doubts the French will use this design now but if they do they are going to build a steam catapult in from the start so they are not restricted to VSTOL aircraft.
5. You don't even need an angled deck to land aircraft. The point of the angled deck is to be able to land and launch aircraft simultaneously. True.
6. In an emergency, RN carriers will be able to land other jets. NATO regularly conduct exercises for this. They might be able to land them but unless the are Harriers or some other VSTOL they won't get off again as they need a catapult to launch.
The new carriers have been designed to launch the F-35B and that's a problem because the F-35B is not as good an aircraft as the F-35C conventional carrier variant and if the F-35B is not purchased or cancelled there are no alternative VSTOL aircraft around to replace it, unlike the choice of conventional carrier launched aircraft.
The Liberal Democrats have a federal set-up: Tavish Scott is leader of the Scottish party, including MPs. The Liberal Democrats actually have a devolved set where there is a combined British/English party with two subsidary celtic sub-regions. If you don't believe me then try and find out who the leader of the English Liberal Democrats is and try and find their website. Tavishes authority and influence can be judged by the stone cold hotline between Clegg and Scott during the coalition negotiations. As I pointed out already there is no "Scottish Lib-Dem Party".
The Scottish Tories are grappling with the issue of extending their existing autonomy as part of their current review. But Annabel Goldie is Scottish Conservative leader - not "leader of the Conservatives in the Scottish Parliament." Careful words Brian, where you avoided calling her the leader of the "Scottish Conservative party" which of course does not exist. The Conservatives have exactly the same devolved setup as the Lib-Dems with a British/English party with two subsidary celtic sub-regions.
When Iain Gray was elected Labour's Holyrood leader, the various contenders suggested a range of ways in which Labour's Scottish autonomy might develop. That implies that the Scottish part of the Labour party had some autonomy to develop.
As I recall, Mr Gray indicated that the position would develop organically: that his election by the wider party would steadily entrench the status of his role and thus of the Scottish party within the wider Labour movement. There is no Scottish Labour Party and Iain Gray's call to be on the NEC just emphasises his minor role in the party hierarchy at the moment. After 11 years of the Scottish Parliament why are Labour only now thinking of giving the Labour MSP group leader a high status post within the Labour party? Maybe Iain is just going to be the placeholder for someone else who wants back into the party hierarchy.
There already exists a power in the Scottish Parliament to vary the income tax rate by 3p up or down where the the Scottish Parliament gets to keep the extra revenue for an increased rate or in the case of the reduction has its block grant reduced accordingly. All Calman has done is change that to a 10p rate.
The 3p rate has never been used so I can't see why the 10p rate is now the best thing since sliced bread or regarded as a major change in the powers of the Parliament.