SNP, OIL AND WESTMINSTER

The oil and gas industry in Scotland is having a difficult time with the low oil price and the lack of help from Westminster.   OK, they reduced the tax levels slightly but some say they could still have done more.    Why did they do so little – perhaps because they believe that Scottish Independence cannot happen without oil revenues?  That without North Sea Oil the SNP have an inadequate economic argument to support independence?

There are plenty of stories circulating of there not being much oil left to produce and that the production and exploration costs are too high to make it economically viable.   Why then are the large operating companies still investing in new fields?    There are potentially large finds in our West Coast waters which were announced immediately after the NO result in 2014.   Why was this not announced in the run up to the 2014 referendum?

There is a history between Westminster, the SNP and North Sea oil.    BBC Alba did an excellent documentary in 2013 detailing how the SNP proposals have been thwarted by various UK Governments.   It may well answer some of the questions being asked today.

Scottish Government stood up to Osborne

Chancellor George Osborne almost sank the Scotland Bill with a last-minute technical objection which could have cost Scotland £200 million.

THE deal to deliver new powers for Holyrood almost fell apart at the last moment after George Osborne refused to sign it off, the Sunday Herald can reveal.

After months of negotiations and an apparent agreement between Edinburgh and London, the Chancellor blocked the Scotland Bill last week, jeopardising a critical Holyrood vote on it.

His refusal to sign off on a technicality caused consternation in Whitehall, and led to a cross-border stand-off between the Conservative and SNP administrations last week.

Nicola Sturgeon held a series of urgent phone calls with John Swinney before rejecting a Treasury demand for a change that could have cost Scotland up to £200m a year.

Her decision meant the final, high-profile vote on the Bill by MSPs was almost cancelled.

After 26 hours of wrangling, Osborne finally blinked and backed down and the Bill was passed by MSPs on Wednesday, allowing it to continue its passage through Westminster to become law.

However insiders say that, behind the scenes, the Chancellor came perilously close to sinking the Bill – a blunder that would have handed the SNP a propaganda coup for the election.

It is understood the Scottish Office and Cabinet Office put pressure on the Treasury in order to avert a political disaster.

“I think the Treasury did it to test our resolve,” said one Scottish Government source. “They thought that, even if they made a late change that cost us money, we wouldn’t have the balls to say no to more powers, but we did. They got the fright of their bloody lives.”

Sticking to her promise not to accept any deal that caused a “detriment” to Scotland’s finances, Sturgeon rejected the Treasury’s demand and refused to lodge the motion.

The full story can be found at The Herald.

Scotland Bill – Next Stage

committee_photo_September_2015
Devolution (Further Powers) Committee Members

The Scottish Parliament’s Devolution (Further Powers) Committee published their 200 page report today (11.3.2016) the conclusion of which was to support the Scotland Bill and the associated five year financial deal also known as the fiscal framework.

If MSPs vote to approve the Bill on Wednesday of next week it will then continue its process through Westminster after which new powers will be passed on to Holyrood.

The convener of the Devolution (Further Powers) Committee, Bruce Crawford MSP, described the report’s unanimous recommendation to support the legislation as “a significant milestone in a remarkable political process”.   He did add the committee believed there were some areas where the Bill falls short “of the spirit and substance of Smith” particularly in relation to the devolution of employment programmes and the future operation of the legislative consent provision.

There remains concerns around the lack of transparency particularly in relation to the key documents relating to the fiscal framework which was blocked by the Treasury and also the lack of detail on what happens at the end of the five year fiscal deal if both governments do not agree on the next steps.    However, despite these concerns,  the Committee recommends that MSPs approve the Bill.

To find out more information on the Devolution (Further Powers) Committee click here.

 

 

 

 

Council Tax Reforms

Today (2 March 2016) Nicola Sturgeon set out the SNP’s plans make the funding of local services fairer – in a way that’s reasonable, measured and balanced. At the same time the proposals will boost investment in our schools, provide additional support for children in low income households, and ensure councils continue to be properly funded while becoming more accountable.

Here’s what you need to know about our plan to make council tax fairer.

1. £100 million extra will be raised and invested in schools every year
Greater contributions from those living in the highest value properties will generate an additional £100 million every year. We are committed to working with local authorities to ensure this extra funding is invested in our schools.

2. At least three quarters of households will pay the same – or even less – than they do today.
We’re committed to a tax system that is proportionate to people’s ability to pay. That’s why our plans will ensure those living in lower-band properties A to D – at least 75 per cent of all households in Scotland – will pay the same, or even less, than they do today in council tax.

Our proposals mean that the average band E household will pay around £2 per week more, while the average household in the highest band will pay around £10 a week more.

3. We’re providing financial relief to low income households.
In the face of Tory austerity and calls from Labour and the Lib Dems to hike taxes across the board, we will provide further financial relief to low income households.

We’ll extend the council tax reduction scheme to low income households with children. This will directly benefit 77,000 low income households by an average of £173 per year, including 140,000 children.

Many low income families living in high band properties will already be in receipt of council tax reduction, but we’ll extend this to put in place an exemption for higher-band households who are below average earnings – up to a maximum of £25,000 net income. This will exempt 54,000 households from changes – a third of them pensioner households.

4. Households in Scotland will still, on average, pay less than households in England.
Since 2007, we’ve put in place a council tax freeze in Scotland, providing households with financial relief in tough times. Meanwhile, between 2007-08 and 2015-16, council tax in England has increased by 12 per cent and soared by 32 per cent under Labour in Wales.

Our proposed changes mean that households in Scotland, across all bands, will still benefit from lower average council tax bills than households in England do. And, bills across all bands will be lower than they would have been had the council tax freeze not been in place for the past eight years.

5. Councils will continue to be properly funded and become more financially accountable too.
From April 2017, the council tax freeze will be lifted. Local authorities will be able to increase council tax by a maximum of 3 per cent a year, which could generate an additional £70 million.   This will ensure we do not return to the sky high annual council tax hikes we saw in the past. In the years before the SNP took office, council tax had risen by 60 per cent, with many people paying more in council tax than they were in rent or mortgage.

Councils will continue to benefit from the £70 million every year the Scottish Government has provided to allow them to freeze council tax. This means that any revenue they choose to raise by increasing council tax will be genuinely additional.

If re-elected this May, we will also consult with councils on the assignment of a portion of devolved income tax raised in Scotland, which will reduce reliance on grant funding from central government.

The Vow, The Smith Commission and The Scotland Bill 2015

vowWe are agreed that:   The Scottish Parliament is permanent and extensive new powers for the Parliament will be delivered by the process and to the timetable agreed and announced by our three parties, starting on 19th September 2014.  We agree that the UK exists to ensure opportunity and security for all by sharing our resources equitably across all four nations to secure the defence, prosperity and welfare of every citizen.  Because of the continuation of the Barnett allocation for resources, and the powers of the Scottish Parliament to raise revenue, we can state categorically that the final say on how much is spent on the NHS will be a matter for the Scottish Parliament

Smith CommissionThe Smith Commission

What were the key recommendations set out by the Smith commission in November 2014?

 

The Scottish Parliament is to have:

  • UK legislation to state that the Scottish Parliament and Scottish Government are permanent institutions. The parliament will also be given powers to legislate over how it is elected and run.
  • the complete power to set income tax rates and bands.
  • to receive a proportion of the VAT raised in Scotland, amounting to the first ten percentage points of the standard rate (so with the current standard VAT rate of 20%, Scotland would receive 50% of the receipts). However, the Scottish Parliament would not have power to influence the UK’s overall VAT rate.
  • increased borrowing powers to support capital investment and ensure budgetary stability. These powers are to be agreed with the UK government.
  • to have power to extend the vote to 16 and 17year-olds, allowing them to vote in the Scottish Parliament general election, 2016.
  • to have control over a number of benefits including Disability Living Allowance, Personal Independence Payment, winter fuel payments and the housing elements of Universal Credit, including the under-occupancy charge (popularly known as ”the bedroom tax”).
  • to have new powers to make discretionary payments in any area of welfare without the need to obtain prior permission from the Department for Work and Pensions.
  • to have all powers of support for unemployed people through employment programmes, mainly delivered at present through the Work Programme.
  • to have control over Air Passenger Duty charged on passengers flying from Scottish airports.
  • responsibility for the management of the Crown Estate’s economic assets in Scotland, including the Crown Estate’s seabed and mineral and fishing rights, and the revenue generated from these assets, to be transferred to the Scottish Parliament.
  • the licensing of onshore oil and gas extraction underlying Scotland to be devolved to the Scottish Parliament.
  • have power to allow public sector operators to bid for rail franchises funded and specified by Scottish ministers.
  • The block grant from the UK government to Scotland will continue to be determined via the operation of the Barnett formula. New rules to define how it will be adjusted at the point when powers are transferred and thereafter to be agreed by the Scottish and UK governments and put in place prior to the powers coming into force. These rules will ensure that neither the Scottish nor UK governments will lose or gain financially from the act of transferring a power.
  • MPs representing constituencies across the whole of the UK to continue to decide the UK’s budget, including income tax.
  • The Scottish and UK governments to draw up and agree on a memorandum of understanding to ensure that devolution is not detrimental to UK-wide critical national infrastructure in relation to matters such as defence and security, oil and gas and energy.

The Scotland Bill 2015

What is included in the Bill (at Commons stage) and does it meet the recommendations of the Smith Commission.

  • The Scottish Parliament and the Scottish Government are a permanent part of the United Kingdom’s constitutional arrangements and it is recognised tickthat the Parliament of the United Kingdom will not normally legislate with regard to devolved matters without the consent of the Scottish Parliament.
  • A tax charged on the carriage of passengers by air from airports in Scotland is a devolved tax.tick
  • Tax on the exploitation of aggregates is a devolved tax.
  • Additional income tax, above the UK  base rate, is devolved as is the income tax rates and bands.
  • Employment support through work programmes similar to UK Work Programme.
  • First 10% of Scottish VAT receipts devolved.
  • Disability, industrial injuries and carer’s benefits are devolved.
  • Social Security remains reserved for Westminster.   Not devolved are Employment and Support Allowance, Jobseeker’s Allowance, Pension Credit cross-1and Universal Credit.
  • Top ups of reserved benefits (Housing, Tax Credits, Welfare Foods, Winter Fuel) are devolved but not where sanctions have been imposed by DWP.
  • Creation of new benefits is devolved but must come out of the Scottish Consolidated Fund and must be agreed by Westminster if cross-1these benefits stray into reserved areas i.e. Social Security, Pensions.
  • Award of Onshore Petroleum licencing devolved but not the licence fee.
  • Crown Estate management and revenue is devolved but not where assets are in a limited partnership agreement.

There are a number of other devolved areas and you can read the Explanatory Notes to the Bill here.

The Bill is currently going through the House of Lords where various amendments are being discussed.   The major change is the additional clause introduced by Lord Foulkes stating a second tier of government in Scotland is required via a Senate.

We await the final bill, the agreed fiscal framework and whether the Scottish Government accepts the Bill in its amended form.

Dec. 2015

 

Scottish House of Lords?

Lord Foulkes of Cumnock (aka George Foulkes, Labour) and Baroness Suttie (aka Alison Suttie, Liberal Democrat) are suggesting the following new clause be inserted into the Scotland Bill.

Scottish Senate

(1)     There shall be a Scottish Senate which shall be the second chamber of the
Scottish Parliament.

(2)     The Scottish Senate shall consist of 46 members, to be elected using the
Single Transferable Vote system in each region of Scotland, in elections to
be held on the same day as the elections for the Scottish Parliament.

(3)     Each electoral region shall return the following number of Members—

(a)   Central Region: 5 members
(b)   Glasgow: 6 members
(c)   Highlands and Islands: 4 members
(d)   Lothian: 7 members
(e)   Mid Scotland & Fife: 5 members
(f)   North East Scotland: 7 members
(g)   South of Scotland: 6 members
(h)   West of Scotland: 6 members.

(4)     The Boundary Commission for Scotland must keep under review the
regions and the number of Members to be returned for each region, and if
appropriate make a report to the Secretary of State recommending changes.

(5)     Any reports by the Boundary Commission for Scotland under subsection
(4) are subject to the requirements, and to the provision for the
implementation of recommendations by Order in Council, contained in
Schedule 1 to the Scotland Act 1998.

(6)     The proceedings of the Scottish Senate shall be regulated by Standing
Orders agreed by the Senate.

(7)     Standing Orders agreed by the Senate shall include provision for the Senate
to—

(a)   undertake pre-legislative scrutiny of proposed Bills;

(b)   consider and propose amendments to legislation agreed by the
Scottish Parliament for future consideration by the Scottish
Parliament before it is submitted for Royal Assent;

(c)   debate and pass resolutions on devolved matters; and

(d)   establish committees with the power to call or require Scottish
Ministers to give evidence on any devolved matter.”

Extract from Scotland Bill Amendments to be Moved in Committee: published
4 December 2015.

Scotland Bill – Final Reading

I spent some time watching the televised House of Commons final debate on the Scotland Bill.   The Bill had some 200 amendments, 80 of which were added to the previous rendition of the Bill by the Government, and the paper was 76 pages long.

I was disappointed at the lack of interest by other parties on debating the subject (probably my niaivity) and the lack of any principled opposition by the Labour Party.   They actually abstained on crucial amendments relating to welfare and tax credits thus providing no opposition to the Tory Government.

Sitting on the benches was our full complement of SNP MPs, and amongst them, Independent Michelle Thompson, but only a handful of Labour and a handful of Tory MPs were in attendance.  It wasn’t as if their colleagues were not in the building as they all appeared when it was time to vote.

Both Tory and Labour MPs used up valuable time by talking about matters other than the Scotland Bill.   One Labour MP spent 30-40 minutes talking about English independence and had to be reminded about the subject of the debate.

Our SNP MPs did well in challenging the speakers to give way and raise questions.   Tasmina Ahmed Sheikh asked Mr Mundell if people in Scotland were paid “top ups” to offset cuts in tax credits would that constitute “income” to HMRC and who in turn would claw it back through taxation.   Excellent question.   Mr Mundell did not have a satisfactory answer.

Tommy Shepherd made his views clear when he spoke during the debate:

We sought a mandate and we got a mandate and whatever happens here today please understand that this bill does not satisfy the aspirations of the Scottish people for greater control over their own affairs and no matter what happens today this is not over.   We will be coming back within the next five years to this chamber to argue again for more powers for the Scottish people and to satisfy the aspirations of the Scottish people and if that takes another Scotland Bill at some stage later on then so be it.

Tasmina Ahmed Sheikh gives an account of the event in her Nov 11th article as does Mhairi Black in her article of the 14 November.   Both a good read.