We Were Right to Vote No, by Alastair Cameron

If Nicola Sturgeon and John Swinney had got their way, Scotland would be preparing to become an independent country on March 24th.

Right now, the UK and Scottish Governments would have been locked in talks to negotiate the break-up of a 300-year-old union against a backdrop of falling oil prices and uncertainty over currency, EU membership and border controls.

Fortunately, the majority of Scots decided going it alone was not the best future for our country and voted decisively to stay as part of the UK.

Instead, the two government have been in talks of another kind. The stakes aren’t as high but they are still complex and fraught. The issue is the fiscal framework which will underpin the new tax powers which are coming to Holyrood.

And the long, drawn out efforts to strike a deal with the Treasury on the fiscal framework proves why we were right to vote No in the referendum.

The prospect of these new tax powers has sparked a live and vital debate that goes to the heart of what politics is about: taxation, and how to deliver good public services while ensuring dynamic economic growth.

In this new phase for Holyrood, Labour and the Liberal Democrats have put forward bold plans to increase the rate of income tax to invest in education while the Tories are looking to reduce the tax burden by introducing a new income tax band and abolishing stamp duty. This kind of meaningful choice is essential in healthy democracies, and debate along these lines must be good for Scotland.

So it is unfortunate that the only people not to coming to the party are those seemingly best placed to win the election: the SNP. It is the great paradox of Scottish politics that those with the most revolutionary agenda – breaking up the UK – have the feeblest prospectus for government.

When it comes to paying your way in society, few of us could match the enthusiasm of the famous American legal scholar Oliver Wendell Holmes Junior for handing over his hard-earned cash.

He insisted that he like to pay his taxes, explaining: ‘It buys me civilisation’.

His approach may be an exception, and even among the many who accept the principle of progressive taxation, paying our taxes isn’t our favourite use of money. So being the one responsible for collecting them is one way to risk becoming unpopular.

Perhaps that explains the SNP Government’s reluctance to set out how they would use the powers over tax and why they seemed so reluctant to strike a deal with the UK Government.

The Scottish Government has maintained that it was simply trying to get the best deal for Scotland and would not be forced into a deal until they believe it was the right settlement for the country.

The devolution of income tax does bring both risk and reward and it was reasonable for the Scottish Government to play hardball in the negotiations to minimise the pitfalls.

But the First Minister seemed to go a step further: demanding that the UK underwrite the Scottish economy however badly it performs and however incompetently it is managed. In other words she seems addicted to the security that the UK provides and the comfort of being able to hold office without risk or responsibility.

If so, then perhaps the First Minister should reflect that this is a luxury not of her making.

After all, had she got her way in the referendum, we would not be able to negotiate fiscal transfers and Barnett adjustments with the UK Government to deal with challenges like low population growth, falling oil prices and uncertain tax receipts.

If she had secured a Yes vote, we would have faced all of these problems on our own and most experts agree we would be considerably worse off now and probably in the future too.

We would also have been unable to prolong these negotiations endlessly until we got the right deal, as the Nicola Sturgeon has been doing.

The Scottish Government’s original proposal was that we would be an independent country just 18 months after the referendum.

The negotiations would have been far more complex than the current talks between the Scottish and UK Government – they would have included strained discussions over division of oil and gas revenues, a fiscal pact, a common energy market, possible border controls, financial services oversight and most vexed of all, potentially a currency union.

If we were barely able to conclude a deal on a fiscal framework in the time since the referendum, how would we have managed to negotiate the break-up of a 300-year-old country within 18 months and what kind of deal would we have got?

Had there been a Yes vote, Scotland would have been preparing to break away from the UK in just a few weeks.

The difficulties surrounding the fiscal framework show that Scotland was right to vote to stay in the UK and maintain the wider pooling and sharing arrangements which protect us from the worst of the economic shocks.

A recent survey of leading policy experts by Scotland in Union showed that the key powers that affect economic growth – including control over taxation – now rest with Holyrood.

So with the Scotland Bill set to fully devolve income tax in 2017, we are having an unprecedented debate on fiscal policy at Holyrood which has invigorated political discourse in this country, moving on from what we spend our money on to how we best raise it.

I am delighted that a deal is now done on the new tax powers in time for this welcome choice on taxes come the Holyrood election. I think it would be good for the country to move past the ‘alibi’ politics which have characterised too much of the post-devolution debate.

But I am thankful Nicola Sturgeon had the luxury of time to negotiate the best deal for Scotland, including fiscal transfers from the rest of the UK. After all, that is what we voted for in spite of her best efforts. 

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