The fiscal trap

sometimes it's worth
sometimes it's worth.
Lots of people have been writing about how the new powers for Holyrood effectively constitute a fiscal trap. As Alistair Davidson said:

The Scotland Bill is terrible. We are being given the power to top-up existing benefits, but not control of the benefits system. That means we don’t save money by getting people into work, and we can’t change the system to make it more humane or more efficient. Top up benefits will be expensive or in some cases impossible to administer.

Oh and taxes – we are getting more power to vary taxes, but not power to define them. Rich people can choose to take their income through shares or capital gains, taxes not devolved, so we can tax the middle class more but we can’t tax the rich. And the Tories will still be cutting the Scottish block grant every year. A well-constructed trap, all round.

In the old days — before the advent of austerity — being able to vary a variety of taxes and benefits might have been moderately useful. However, I’m starting to think it’s going to be an even bigger disaster than people realise because the powers are insufficient to maintain a welfare state in Scotland if the Tories abolish it in England.

Imagine the Tories decided to cut public spending drastically, for instance by getting rid of tax credits altogether, and to use the money saved on something that didn’t affect Scotland directly, for instance on lowering property taxes in England. Because tax credits aren’t devolved, Scotland wouldn’t get anything out of abolishing them (the block grant is based on English spending in devolved areas, so this wouldn’t change anything), and property taxation is devolved, so Scotland would to some extent be expected to mirror this move. A majority of Scots might want to introduce Scottish tax credits to keep things unchanged up here, but there wouldn’t be any money to pay for it. To make things worse, if Scotland decided to reduce property taxes here, too, that would cost even more money. As a result, Scotland would be facing two new expenses and no new income. It’d be an absolute nightmare.

Of course Scottish Labour are making things even worse by pretending the new powers are sufficient to allow Scotland to maintain the welfare state. And why shouldn’t they? After all, they have practically no chance of getting into power in Scotland any time soon, so it’s all just a game to them now.

I just don’t understand why the Scottish Government isn’t doing more to show that it’s all a trap. I guess the hope is that people will suddenly realise what the problem is in a few years’ time, and hopefully they’ll then turn to independence. I just fear that a lot of the welfare state will be irrevocably damaged before the scales finally fall from the voters’ eyes.

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What EVEL have the Tories done?

Evil Pumpkins
Evil Pumpkins.
I’m completely in agreement with the idea that English affairs should be determined by parliamentarians elected in England. Why should Scottish MPs be able to vote on laws relating to education or health in England, when these areas are fully devolved to Scotland? However, the way to achieve this would be to create an English Parliament and an English Government separate from the UK institutions, not the EVEL plan that the Tories have put in place.

As Lallands Peat Worrier has argued, EVEL really doesn’t implement English Votes for English Laws but English Vetoes against but not for English Laws. This sounds rather innocent, but EVEL has evil consequences for all MPs representing non-English seats and any parties that rely on them.

The purpose is to give the Tories a perpetual veto at Westminster. The consequences might be minor during this parliament. However, as Iain Macwhirter has pointed out, EVEL will suddenly become important once a (possibly Labour-led) government relies on non-English MPs to pass its legislation: “It would leave UK Labour ministers for health, education and justice unable to implement the policies on which the government was elected. How could any prime minister pretend to govern when he or she can’t implement their manifesto pledges over 85 per cent of the UK population?”

A useful way to think about it might be so say that we currently have Tory governments in both England and the UK so there are no conflicts; however, if after 2020 we have a Tory government in England but any other government in the UK, EVEL will suddenly spring into action. (Holyrood politics was also a bit boring while Labour was in charge both there and in the UK and only really got interesting after the SNP got into government.)

It is now unrealistic for MPs from Scotland, Wales and Northern Ireland to reach the top. Positions such as Prime Minister, Chancellor of the Exchequer, the Secretaries of State for Health and Education and the Home Secretary will now require the holder to represent an English seat, as pointed out by Wings over Scotland. The problem is that most politicians move up through government by advancing to a more important post from time to time, so it becomes almost impossible to create a reasonable career path if you are restricted to military and foreign affairs.

It might also shut non-English MPs out of a lot of the committees (where a lot of the real law-making happens) — see for instance this story about Tommy Sheppard’s seat in the fracking regulations committee. This is all a bit odd because English MPs don’t seem to have been removed from the Scottish Affairs Committee, which has plenty of members not representing Scottish seats.

Of course, there’s also the worry that EVEL will be extended in the future. Currently it’s just implemented through a Commons standing order, which a future government can easily change. It’ll be interesting to see whether the current government after a couple of years tries to make it much harder to change by putting it into law once the dust has settled.

It will also be interesting whether the Tories will try to lump together legislation to make it impossible for Scots to block. For instance, English fox hunting legislation is now subject to an English veto, but Scots can still take part in blocking it in the final stage if it’s a close vote (i.e., if a lot of Tories rebel). Might the Tories add a Scottish sweetener to the bill to make it unattractive for Scottish MPs to do this?

It’s also worth bearing in mind that EVEL isn’t a symmetrical response to Scottish devolution. The way to determine whether something is devolved to Holyrood isn’t to ask whether it only affects Scotland but to check a long list of reserved matters. For instance, broadcasting is reserved to Westminster, so Holyrood cannot simply create a new Scottish TV channel; on the other hand agriculture is reserved, so Westminster cannot pass a UK-wide law in this area without Holyrood’s consent. It would have been straight-forward enough to attach a similar list of reserved matters to the EVEL standing order (which is surely what they would have done if they had set up an English Parliament), but instead it’s been left to the discretion of the Speaker.

It’s hard not to get the impression that the Tories have made the first version of EVEL deliberately vague so that nobody gets too bothered about it yet, and by the time people really realise what it was all about, it will already have been part of the UK’s uncodified constitution for years. That’s EVEL.

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Back to the Future: Scottish Independence

"You and Jennifer turn out fine. It's Scottish independence, Marty! Something's gotta be done about independence!"
“You and Jennifer turn out fine. It’s Scottish independence, Marty! Something’s gotta be done about independence!”
Because today is Back to the Future Day, I’ve been having some fun with fellow tweeters discussing how we’d achieve a Yes in the 2014 referendum if we could go back in time to 2012 or so.

It’s actually quite an interesting question. To formalise it a bit, imagine you could go back to any point in 2012, and you could speak to one person for an hour. You could show them evidence such as photos, newspapers or videos, but they wouldn’t be able to keep it. Who would you choose to talk to, and what would you tell them?

Would you try to convince Alex Salmond that his currency stance wasn’t credible and that he needed to publicise a Plan B?

Or would you try to convince him that Blair Jenkins shouldn’t be made the head of Yes Scotland? (I presume he was chosen because of his links to the BBC and STV in order to achieve favourable media coverage for the Yes campaign, but of course this didn’t work out.)

Or would you convince him to step down and hand over to Nicola Sturgeon much earlier? That could have backfired badly, however, if it was seen as a sign of weakness.

Perhaps you would instead talk to Angus Robertson and show him his own advice, namely to “harness the powers of younger voters to persuade grandparents and grandmothers that it was not just about an older generation but about future generations and voting for the future of the country”.

However, I think I’d go back to early 2012 and talk to Douglas Alexander. I’d show him a video of his concession speech from May 2015. I’d explain to him in no uncertain terms that practically all Labour MPs were going to be kicked out if they campaigned against independence together with the Tories. Although Douglas Alexander wasn’t the leader of either UK or Scottish Labour, I believe he was influential enough in both that he would have been able to change things. Perhaps he would even have been able to save Scottish Labour, but I believe a Yes vote would have been a consequence of this.

Would would you do?

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Tax credits and the self-employed

22nd Sept: Taxing
22nd Sept: Taxing.
When challenged about the cuts to tax credits, the Tories typically reply that most people will be compensated by a higher minimum wage. This is not entirely true (as far as I can tell, the minimum wage isn’t going up enough to fully compensate workers), but the biggest problem with it is that it assumes everybody is paid a salary.

However, there are a lot of self-employed people (either freelancers or owners of one-person companies) whose income depends on what they can sell (whether services or products) and who cannot simply increase their prices to compensate for falling tax credits.

Some politicians and economists have been wondering why productivity hasn’t been rising in the UK when employment has appeared to be doing rather well. I believe the answer can be found in a large rise in under-employed self-employment.

One shouldn’t forget that the job-seeker’s allowance (JSA) is in effect a working-class benefit, because recipients typically also get their rent paid; if a potential JSA claimant has a mortgage, on the other hand, there’s no help to get with that, and there’s therefore hardly any reason to apply for it. (It’s instructive to compare this with other countries like Denmark, where unemployment benefits are much higher but don’t include free rent, which means the system also works for people with mortgages.)

If you’re paying a mortgage, it makes much more sense to apply for Working Tax Credits (WTC) than JSA. You might only get £1,960 p.a. instead of £3,801, but you’re then free to do freelance work to top it up, and making at least two grand a year shouldn’t be too hard. (If you have kids, you’ll can also get Child Tax Credits, but let’s leave that aside for a moment.) Furthermore, you won’t be assigned silly jobs without pay by the Job Centres, and they won’t sanction you for missing a meeting, so you’ll have much more time to either make freelancing pay off or to apply for a real job elsewhere.

In other words, tax credits have to a large extent functioned as an unemployment safety net for people with mortgages, providing a certain amount of financial safety during the beginning of a freelance career or during bad years later on. (See also this article for some examples of the ways self-employment has simply become a way to hide unemployment.)

So what will happen now that the Tories cut the tax credits down to a very low level? The consequences won’t be felt by people in full-time minimum-wage jobs. Instead, it will be the large number of middle-class people who lost their jobs during the recession and who have been struggling to make ends meet by a combination of freelance work and tax credits that will potentially now have to throw in the towel, sell their house and go down to the Job Centre.

Another problem is that the way child tax credits will be limited to two children for new claimants. That will make it unattractive for people with more than two kids to accept temporary well-paid employment, because they can’t run the risk of not getting their tax credits back afterwards.

This will be a disaster for the Tories in many ways. Not only will many of the people affected be Conservative voters (at least in England), but it will also mean that the unemployment figures will start rising again (although it might be good for productivity).

Unfortunately, many of the people affected aren’t saying very much because it’s hard to come across as a successful professional or consultant or whatever if you’ve just told the world you didn’t manage to make more than three grand in the past year. It’s easier to keep shtum, grit your teeth and try even harder to find more work.

It’s interesting that whereas the problems with zero-hour contracts and salaries lower than the living wage are well-known, the hurdles facing the self-employed often get overlooked. Perhaps it’s because the issues are really hard to solve. You can’t simply legislate that freelancers and small businesses have to sell their products and services at specific prices — the consequence would often be a drop in earnings rather than a rise. In fact, tax credits are probably the single best way to help this group of people.

The Tories are going to regret this for a very long time. The SNP and the other pro-independence parties should already start to outline how they’ll solve it after independence.

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The nightmare on Sauchiehall Street

Joe Pike’s “Project Fear” is a really interesting book about Better Together and Labour’s subsequent electoral collapse, which must be considered essential reading as we prepare for the next independence campaign.

Joe Pike is the husband of Better Together’s Director of Policy, Gordon Aikman, so he’s been able to speak directly to practically everybody involved in the No campaign:

The majority of the content is based on over fifty interviews with key players, almost all conducted in person, with many speaking for the first time. Every interview — from junior staff to leading politicians — was conducted on the same off-the-record basis. Only a handful of people refused to be involved. […] Many interviewees have kindly provided emails, internal documents, polling information, contemporaneous notes and the content of text messages.

It contains a lot of wonderful wee anecdotes full of inside information, such as the following, which means the book is a fun and informative read:

If [the patronising BT lady] advert had elicited a critical mauling, another — which never saw the light of day — would have been far more controversial. This was scare tactics on steroids: a negative, dark, moody and threatening broadcast. ‘Girders were breaking, oil was spurting out. It was awful,’ said one campaigner. ‘There were kids walking up to the edge of a cliff looking over as the UK was being ripped apart,’ said another. ‘It was an “in emergency, break glass and let’s roll this bad boy out” option.’ The advert was made at a cost of £50,000, but was never deployed.

[…] Yet it was Maggie Darling who ensured voters never saw it. ‘It’s like Nightmare on Sauchiehall Street,’ she told her husband.

The lasting impression is of a campaign that was under-resourced for a long time (because everybody assumed at first they’d win easily) and completely chaotic towards the end as everybody tried to impose their own ideas on the campaign. Also, they spent a lot of money on polling but not very much on actually doing anything.

Will Better Together II be very different from this? I’m sure it will. Firstly, it will get proper funding from the outset; secondly, nobody will think of it as an easy way to get the Nationalists back into their box; thirdly, Labour won’t have an army of MPs and Westminster insiders to rely on; fourthly, the campaign itself might be organised in a way that suits the No side better (a shorter campaign, for instance); and finally, I’m sure a lot of lessons will have been learnt from the way the two campaigns were run.

I just wish somebody would write a similar book about the Yes campaign. In many ways it’d be more difficult, because the campaign was much less centralised — Yes Scotland was just a small part of it. However, it was also a hugely successful campaign that achieved much more than many people imagined was possible at the outset, so there are a lot of lessons to be learnt about what worked and what didn’t.

This is a bit different from Project Fear, which at times comes across as a series of lessons in how not to run a referendum campaign. However, there are also important lessons for the Yes campaign in it. For instance, it’s clear Better Together had expected the Scottish Government’s White Paper to be much more like a budget, and they had spent a lot of time preparing their response, so they were almost disappointed when it was published. Would it have been better if the White Paper had been more like what the No campaign expected?

I must say this is probably the best book about the independence campaign so far — and it’s all the better for including the Westminster election rather than finishing the day after the referendum.

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Predicting May 2016

Light trails
Light trails.
As one of the few people who actually predicted the SNP could win 56 Westminster seats six months before it happened, I feel under a moderate amount of pressure to say something clever about the upcoming Holyrood elections.

It’s not easy, however. What really happened in May 2015 was the SNP won all the Westminster seats apart from three local “accidents” — the non-SNP seats could just as easily have been some other ones if different candidates had been elected, or if different events had happened.

Given that the opinion polls haven’t really moved since then (and given that Scots now seem to be voting in roughly the same way for Westminster and Holyrood), the best prediction for the constituency seats is exactly the same — namely that the SNP wins all the seats apart from a few local hiccoughs. However, trying to put a name on these exceptions would be impossible and futile at this time, even though the SNP candidates have now been selected.

What about the list seats, then? Well, it all depends.

If all the people voting SNP for the constituency repeat this for their second vote (i.e., a successful “both votes SNP” strategy), the North East demonstrated in 2011 that it’s possible to win all the constituencies and still get a list seat, so it’s possible the SNP will win about 80 out of the 129 seats (the constituency seats plus seven list seats — if there are a few “accidents”, this number wouldn’t change as the list allocation algorithm would step in to compensate for them).

On the other hand, if the smaller pro-independence parties (the Greens, the SSP and Solidarity) manage to convince enough Yes voters to split their votes (i.e., a “second vote Green/SSP” strategy), it’s entirely possible the SNP won’t pick up any list seats at all (except perhaps in regions where one or maybe even two “accidents” happen), and the real question then is whether these smaller parties will get enough votes to get any seats at all. Realistically they will manage to do this in Glasgow and Edinburgh, but in the more rural regions it’ll be a lot harder).

As I’ve shown before, the way to get as many pro-independence MSPs is that the voters adopt the same tactics: “The best solution is that nobody votes Green, or that more than 25% of Yes voters do so. The worst possible scenario is that about 8% of Yes voters vote Green on the list.” Is this likely? I’m not sure. I’d be very surprised if the Greens and perhaps the SSP (RISE) didn’t do well in the largest cities, but will they manage to convince SNP voters there to vote tactically for them? Also, will the SNP manage to convince Yes voters outwith Glasgow and Edinburgh that voting anything other than SNP on the list is likely to help the Unionist parties?

It’s a strange election because the key to predicting the outcome is to anticipate tactical voting rather than reading opinion polls.

However, if I was marched down to a bookie at gunpoint and forced to put my life savings on a specific outcome, I think I’d go for this: SNP 73, Tory 23, Labour 22, Green 8, SSP 2, LD 1, Solidarity 0. There’s no science to this, only intuition. (I realise the LD figure is ridiculously low, but nobody has lost money underestimating the support for my old party for a very long time.)

What we really need is precise polls for each region. The constituencies don’t matter that much (the outcome is unlikely to change the number of seats won by each party), but we really need to know the level of support for the smaller parties in each region. Lord Ashcroft, are you reading this?

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Norwegian language lessons for Scots

(Reblogged from my personal blog.)

Norway is in some regards at least 150 years ahead of Scotland: Until the mid-19th century Norwegians wrote standard Danish, although they spoke Norwegian dialects or at the very least Danish with a strong Norwegian accent; however, for political reasons they decided to recreate a language of their own (they ended up with two separate written languages for good measure, but that’s a different story). In Scotland, there is still no standard way to write Scots, and many people have negative feelings towards the language.

Here I’ll discuss two lessons Scots language standardisers can learn from Norwegian.

Speak yer dialeck, write staundart Scots!

"Speak dialect – write Nynorsk".
“Speak dialect – write Nynorsk”.
I sense that many Scots speakers feel that a written standard would be harmful to the Scots dialects.

However, Nynorsk (the form of Norwegian that is closest to the dialects) proves this isn’t the case. For years, a common slogan was “snakk dialekt – skriv nynorsk” (“speak dialect – write Nynorsk”), and my impression is that it’s been very successful. Norwegian television is certainly full of people speaking various dialects, and I’ve seen school books teaching how to understand them.

There’s no reason whatsoever why the Scots language community couldn’t go down the same route. That is, it should be feasible to tell people to write standardised Scots while encouraging them to speak their local dialect.

Main forms and side forms

main forms and side forms
Main forms (lysbiletapparat and ljosbiletapparat) and side forms (lysbildeapparat and ljosbildeapparat).
For many years, Norwegian dictionaries have been full of so-called “main forms” (hovedformer) and “side forms” (sideformer). (The proportion tends to go up and down over time, but that’s not important here.) Both types are correct, but in official contexts (such as in school books) only the main forms can be used.

I think this is a great way to encourage some spellings without discouraging people who aren’t aware of them (for instance because the norm has changed or because their dialect uses a divergent form). Here are some examples of how a Scots dictionary using main and side forms could look:

If a word has two forms that are both considered main forms, they are shown in the same typeface:

daurk or derk adj dark.

This means that everybody has a free choice between writing daurk or derk.

If the word has a main form and a side form with no regional differences (for instance where one word has almost been replaced by the English equivalent), square brackets and a different colour are employed, and a cross-reference is created from the side form to the main one:

Dens [or Danish] adj Danish.
[Danish] see Dens.

This means that nobody would get a red mark for writing Danish instead of Dens (and spell-checkers would allow both), but school books and other official documents would always use Dens.

The same applies where the side form is regional:

bairn [or wean (W)] n child.
[wean (W)] see bairn.

I don’t see any reason why one couldn’t also add disallowed form in a separate typeface as a help for learners, e.g.:

ane num one.

Some word with main, side and disallowed forms would admittedly produce quite a lot of entries, but this shouldn’t be a problem, especially at a time when more and more people use dictionaries in electronic format:

[far (N)] see whaur.
[whair (S)] see whaur.
whaur [or far (N) or whair (S)] adv where.

If we learn these lessons from Norwegian, we can encourage both standard Scots and the Scots dialects while improving literacy in Scots and raising the status of the language.

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Scottish Independence with a Scandinavian Slant