Independence Day

I’m sure I’m not the only one pining for the parallel universe where Scotland voted yes, so I reckon this will be one of many alternate histories published today.

Indy Ref one year on 013
Indy Ref one year on 013.
There were a lot of foreign media in Scotland in the run-up to the indyref — as a Dane in Scotland, I was interviewed by two radio stations, two TV stations and one newspaper. However, that turned out to be hardly anything compared to the days just after the Yes vote. It felt like every journalist in the world descended on Scotland to report from the early days of a new nation.

And when the journalists had departed, the businesses moved in. A lot of them realised they suddenly needed a Scottish presence now, and I got contacted by a lot of Danish companies who asked for advice on where to place their office. Most of them wanted to be in Edinburgh, of course, so property prices there exploded — apart from the companies opening up offices there, sixty countries simultaneously started setting up embassies.

Most changes were political, though. David Cameron of course resigned the day after the referendum, and he was unsurprisingly replaced by George Osborne. (There was also a minor scandal when Cameron accidentally revealed that the Queen had been sobbing on the phone when he called her to tell her the result.) One of the first things Osborne did was to make a deal with Labour that postponed the Westminster election by one year — everybody quickly realised that conducting a general election during the independence negotiations would be mad. At the same time all Scottish MPs were excluded from the UK government, and many of them joined Salmond’s independence negotiation team instead.

This negotiation team was a true cross-party effort (albeit dominated by the SNP, of course). Nicola Sturgeon, John Swinney, Kenny MacAskill, Patrick Harvey, Danny Alexander, Jim Murphy and Douglas Alexander were put in charge of a subgroup each, reporting directly to Alex Salmond.

It soon became clear that the SNP was starting to fall apart. Now that the pursuit of independence wasn’t there any longer to unify the different strands of the party, it simply couldn’t hold together, and members started leaving. Labour was the big winner. As soon as they had cut their ties to the UK HQ, they decided to make the best of independence, which was exactly what people wanted to hear, and they soon overtook the SNP in the opinion polls. Of course the elections to Holyrood won’t take place till May this year, but everybody is expecting Jim Murphy to become the Prime Minister of Scotland at that point.

The SNP’s decline is probably in part due to the falling oil prices. It’s not an enormous problem, though, not least because of the influx of new companies from all over the world. There is also a cross-party agreement to change the taxes to tailor them better to the Scottish economy, and this will reduce the deficit significantly. However, in order to achieve healthy finances from day one, it was decided to allow the rUK to keep Trident in Scotland until 2025, but the rent charged is astronomical.

Continued EU membership turned out not to be a problem after all. As soon as it became clear that Westminster were accepting the result of the referendum, all EU governments (including Spain) were happy to cooperate, and the treaties were swiftly amended in time for Independence Day.

Normal politics has now been on hold for a while, so both in Scotland and in the rUK (or rather, the United Kingdom of England, Wales and Northern Ireland as it will be known officially from today) people are now looking forward to doing independence instead of talking about it. People in the UKEWNI are perhaps more anxious, and they seem to be blaming the Tories for the whole thing, so the latest opinion polls indicate that Labour will win the election and the Liberal Democrats will become the official opposition south of the border in May. This also means, of course, that Brexit is off the agenda for good, which is probably a good thing for Scotland, too.

I’m so happy that Scotland voted Yes, and according to opinion polls, 64% of Scots now agree with me.

Reforming council tax

I completely understand why the SNP’s proposal for reforming council tax in the next parliament are so timid and unambitious. It’s a political minefield to change it drastically during a recession (or during a very slow recovery for that matter), because no matter what you do, some people will have to pay more, and they might very well be in a position where they can ill afford to do so.

After all, you’re not necessarily cash-rich just because you’re living in a big house. For instance, just top of my head there must be many people that fall into one of the following groups:

  • They have negative equity, so they can’t sell their house without making a loss.
  • They now earn (much) less than when they bought their property, but they have paid off enough of their mortgage to make it affordable to stay in.
  • They have inherited their large house.
  • They have climbed the property ladder by exploiting rising house prices, so their salary is tiny compared to the value of their house.

During a boom, most of these people could probably remortgage to release some money for paying the new council tax, but many people don’t qualify these days, and if a tax change forces people to sell their house against their will, a lot of them will be very angry indeed.

That said, the current system is indefensible. It really should be replaced by a combination of land value taxes, property taxes and income taxes, and the value of land and property should be based on a recent valuation, not on 1991 figures that are now completely out of date.

I also find it odd that councils raise so little of their income through tax. The consequence is that if they need to increase their income by 5%, they’ll need to put up council tax by about 20% if their block grant doesn’t go up.

Of course, if councils had to raise all their income themselves, council tax would go up dramatically. Although it’s hard to compare taxes across countries, it is interesting that in Denmark most people pay more income taxes to their council than to the state.

So all in all it is very difficult to reform council tax without creating major problems.

If I had been in charge, I think I would have guaranteed that nobody’s council tax bill would go up by more than a small percentage year-on-year, but that the government would gradually introduce land value tax and a local income tax, as well as committing to a new property valuation within the next parliament. I don’t think anybody would be terribly upset if it took more than a decade to move to a fairer council tax, so long as small and sensible steps in the right direction were taken each year.

Of course the SNP’s proposal might be seen as such a small and sensible step, but it is much smaller than I would have liked.