There has been much comment over the apparent failure of the SNP government to renew the facility with HMRC whereby the Scottish Government can vary income tax.
The First Minister has written to the Scottish Secretary laying out the situation, and correcting the mistakes in his letter. As Mr Moore decided to make his letter to the FM public, Alex has done the same thing with his.
I reproduce it in full here for those who are interested.
The First Minister has written to the Scottish Secretary laying out the situation, and correcting the mistakes in his letter. As Mr Moore decided to make his letter to the FM public, Alex has done the same thing with his.
I reproduce it in full here for those who are interested.
(Hat tip to Cynical Highlander)
Your letter of 18 November about the Scottish variable rate of income tax (SVR) is a travesty of the position. The reality is as follows:
The then Scottish Executive paid the UK Government £12 million in 2000 to add SVR functionality to Her Majesty's Revenue and Customs (HMRC) tax collection systems. Thereafter, an annual fee of £50,000 was paid.
HMRC said in 2007 that additional work was needed to maintain the readiness of the IT system, and in summer 2008 made clear that they would be installing a new IT platform. Scottish Government officials attempted to elicit information on what this meant for Scotland and the functionality of the 3p tax power.
We were finally asked on 28 July this year to pay over the sum of £7 million to HMRC for this purpose. Why nowhere in your letter did you mention this demand?
Anyone proposing paying this £7 million to HMRC would need to explain where the equivalent cuts would be made in Scottish public spending.
And even if we had paid it - at a time when Scotland is on the receiving end of massive cuts to our budget from your government - the SVR under the new system could not have been implemented until 2012/13: another key point which you failed to mention.
In any case, at that stage it seemed an academic debate because the SVR itelf is set to be replaced under any version of the legislation which you intend to introduce in the next few weeks.
On 20 August, Scottish Government officials offered talks with HMRC on the issue of the SVR - an offer which has not been responded to. The first we have heard from the UK government on the matter since 20 August is your letter of yesterday.
It is clearly unacceptable that Scotland should be asked to pay, again, for something which millions of pounds have previously been paid for. If HMRC choose to replace th
eir IT systems, that is clearly a matter for them. However, anyone would expect them in specifying their new systems to replicate the functionality of the old.No Scottish administration has used the 3p tax power, none of the main parties in Scotland advocate using it now, and it is intended to be overtaken by the Tory/Lib Dem Calman financial proposals - flawed measures which, had they been established for the start of the current spending review, would have resulted in the Scottish Budget being £900 million lower in 2009/10.
The real issue, therefore, would appear to be about the future.
You stated - as did Danny Alexander in his letter to me of 20 October this year about the Spending Review settlement - that: "it is an established principle that the costs of devolution should be met from the Scottish Budget."
This is not the case - in fact, the opposite is true.
HM Treasury's recently-updated Statement of Funding Policy states at paragraph 3.2.8 that:
"Where decisions of United Kingdom departments or agencies lead to additional costs for any of the devolved administrations, where other arrangements do not exist automatically to adjust for such extra costs, the body whose decision leads to the additional cost will meet that cost."
The clear impression can only be that your letter was not about the cost of financial powers that are going to be superseded, but rather about establishing a precedent for the Scottish Government paying to instal and administer the Calman tax proposals - which unlike the SVR will require to be used every year.
Given the huge pressures on the Scottish public purse be
cause of your government's spending cuts - and the further threat to our budget from the Calman proposals themselves - we need answers to these key questions as a matter of urgency:How much is the UK Government intending to ask the Scottish Government to pay for the Calman tax powers - measures which could reduce Scotland's budget, as indicated above?
When do you propose asking the Scottish Government, and therefore the Scottish people, to pay?
Exactly when would these financial powers be capable of being implemented?
A copy of this letter goes like yours to Annabel Goldie MSP, Iain Gray MSP, Margo MacDonald MSP, Tavish Scott MSP and Patrick Harvie MSP, and David Gauke MP, and also to the leaders of the Scottish parties at Westminster: Angus Robertson MP, Ann McKechin MP, and David Mundell MP. I am also sending copies to John Swinney and Fiona Hyslop.
Given that you released your letter to the media, I am also releasing this.
ALEX SALMOND
Alex in kick erse mode again!
ReplyDeleteMy God that Moore is a total idiot. I wonder how Iain Gray FM would have dealt with this? I do hope that Alex is re-elected if for no other reason than I can't be bothered memorising the names of a new cabinet. The only ones I can remember are Jabba and Andy Kerr so I hope they both get jobs (save my memory) who is that daft drab that sits next to Iain and is his deputy but never speaks?
I've just looked her up so to save folk the trouble its Johann Lamont
ReplyDeleteOk folks for those of you that like me cannot remember the name of Labour's half witted shadow team they are:
ReplyDeleteLeader: Iain Gray MSP
Deputy Leader and Chief of Staff with special responsibility for Equalities: Johann Lamont MSP
Parliamentary Business Manager: Paul Martin MSP
Chief Whip: David Stewart MSP
Shadow Cabinet Secretary for Europe, External Affairs and Culture: Pauline McNeill MSP
Shadow Cabinet Secretary for Finance and Sustainable Growth: Andy Kerr MSP
Shadow Cabinet Secretary for Education and Lifelong Learning: Des McNulty MSP
Shadow Cabinet Secretary for Health and Wellbeing: Jackie Baillie MSP MP
Shadow Cabinet Secretary for Justice: Richard Baker MSP
Shadow Cabinet Secretary for Rural Affairs and Environment: Sarah Boyack MSP
Shadow Cabinet Secretary for Elections and Campaigns: John Park MSP
Munguin:
ReplyDeleteHow come there are six cabinet secretaries, and 12 people in the Shadow cabinet?
Alex is quite happy(even deliriously so) to make the Scottish people pay for a council Tax freeze which benefits the most wealthy in society.
ReplyDeleteHe even resorts to Gangster Politics threatening over elected representatives of the Scottish peoples with financial retribution if they do not carry out his orders.
He is unwilling to pay 7 million pounds for a power which the Scottish people voted for(stuff your sovereignty says Alex when it doesn't suit his malevolent schemes)
and could be used to militate against the worst of the Tory cuts by asking those with the most to pay a fairer share(Alex as a Nationalist doesn't do fair)
Given 75% yes 75% of the elected (by the people of Scotland)representatives have accepted the Calman proposals then he as a minority first minister in a minority led Government should accept the settled will of the elected representatives of the Scottish peoples.
Or move aside and let others lead the Scottish peoples which will happen in a few months any way.....
Then Alex and his crew can resume their chip on the shoulder bellyaching back on the opposition benches(for the next 300 hunred years or thereabouts)
Niko:
ReplyDeleteCouncil tax freeze helps poor people who simply haven’t got any money to spare for increased council tax. If we had LIT the poorest (mainly old people) would not pay anything at all. I have relatives who live in “relative” poverty who would be £1000 a year better off. It is a scandal that the labour party opposed that. Only because the SNP backed it. Shocking.
Why on Earth should we pay for them to have their computers reprogrammed when it was an agreement in the beginning that they would make that facility, and they were too stupid to get it done when they bought new computers?
As neither your party nor ours would ever countenance using it... come to that neither would the Libs or the Tories, it seems like a waste of money.
The power hasn’t lapsed and should Mr Gray become first minister (god help us) he can, if he wishes, use £7 million of our money to get the facility reinstated. It remains a power, we just don’t use it.
I tried to post on this this morning but there were technical difficulties.
ReplyDeleteSo I have spent the day thinking about it and I have read Ecks' reply at least three times, and I have to say that it does not approach answering the problem.
"...HMRC said in 2007 that additional work was needed to maintain the readiness of the IT system, and in summer 2008 made clear that they would be installing a new IT platform. Scottish Government officials attempted to elicit information on what this meant for Scotland and the functionality of the 3p tax power. We were finally asked on 28 July this year to pay over the sum of £7 million to HMRC for this purpose...."
Why was the £50,000 not paid in 2007 and 2008?
Why was no negotiation entered into on the £7 million?
What happened between 2007 and 2010?
If the SNP made aconscious decision to reject the tax raising powers in 2007 or 2008, why is it only becoming public now? Are they ashamed? Had they forgotten? Did they want to hide the decision from public scrutiny?
The SNP has never been shy at picking fights wioth Westminster over any trivial issue. Here was a real issue: why no fight and no fuss?
Anyway, why is it not worth paying to maintain the one power we have to vary the economic basics in Scotland as compared to the UK?
John Swinney mentioned in his budget speech last week that he had decided not to use the tax raising powers, but if he already knew that the powers had been relinquished, why did he not mention that? Why pretend he had considered and rejected the use of the powers if he already knew that he didn't have them?
The SNP is always going on about increased powers for Scotland: here was one increased power we already had and they let it go, and they told no-one.
Sorry. Not believable. Not credible. I'm not swallowing it and neither will the Scottish public.
It's a joke. A sick joke. And it's not funny.
Having read Braveheart's post on other forums I am not surprised at his selective reading. The crux of the matter is HMRC's bill from them to pay for their updated computer system.
ReplyDeleteHM Treasury's recently-updated Statement of Funding Policy states at paragraph 3.2.8 that:
"Where decisions of United Kingdom departments or agencies lead to additional costs for any of the devolved administrations, where other arrangements do not exist automatically to adjust for such extra costs, the body whose decision leads to the additional cost will meet that cost."
It's a joke. A sick joke. And it's not funny. To quote a poster
I'd ask Alex 3 questions.
ReplyDelete1. Why do you support windmills ?
Denmark tried that. 6,000 windmills later. Run out of money. No power stations shut down. CO2 emissions increased. No scenery left. Elect bills are 2 X Uk bills
2. Why do you support more immigration ?
The result is less vacancies for local workers. Reduction in pay levels. More agency workers. Employers can hire or fire workes as the work ebbs and flows. No wories about redundancy payments etc.
3. Why do you support the EU ?
It scraps sovereignty and forces countries to beg to be EU members. Their debt will be used as a tool of control.
Alan said;
ReplyDelete"...The crux of the matter is HMRC's bill from them to pay for their updated computer system...."
The HMRC's bill is important, no doubt, and I said so (see*. below). But it's not the "crux", it's a part of the bigger picture.
And the bigger picture is as I outlined and asked above;
"...Why was the £50,000 not paid in 2007 and 2008?
Why was no negotiation entered into on the £7 million?*
What happened between 2007 and 2010?
If the SNP made a conscious decision to reject the tax raising powers in 2007 or 2008, why is it only becoming public now? Are they ashamed? Had they forgotten? Did they want to hide the decision from public scrutiny?
The SNP has never been shy at picking fights wioth Westminster over any trivial issue. Here was a real issue: why no fight and no fuss?
Anyway, why is it not worth paying to maintain the one power we have to vary the economic basics in Scotland as compared to the UK?*
John Swinney mentioned in his budget speech last week that he had decided not to use the tax raising powers, but if he already knew that the powers had been relinquished, why did he not mention that? Why pretend he had considered and rejected the use of the powers if he already knew that he didn't have them?
The SNP is always going on about increased powers for Scotland: here was one increased power we already had and they let it go, and they told no-one.
Sorry. Not believable. Not credible. I'm not swallowing it and neither will the Scottish public.
It's a joke. A sick joke. And it's not funny. ..."
A lot of questions beyond the £7 million. I note they are being avoided here.
Interesting discussion between Alan and Braveheart, who seem to be doing very nicely without me.
ReplyDeleteI'd just say that I've never seen the point of having limited taxation power. You can't fairly compete with otehr parts of teh Uk if you have only one tax to manipulate, hence the reason that Labour, the Liberals and the SNP have never used the facility.
As I understand it, on payment of £7 million, either by the UK government or our own government, the powers would be reinstated. Theyw ere granted by an Act based on a referendum. Surely they must remain.
As not one of the three parties which have been in power has shown the least inclination to use the facility it seems at waste of time paying the £7 m which in any case is disputed.
I'd love to hear Eck's answers Monty.
ReplyDeleteI wouldn't dream of answering for him.
Windmills: I'm personally unsure about them. But then I'm not even slightly green and not hugely concerned about the future of the planet. Selfish I know, but there are so many problems I really can’t afford the time to worry about the maybes of possible, uncertain, not proven, climate change 50 years ahead.
Immigration: The problem with our native population is that it is getting older and we lack people now with the right skills to do the jobs that there are. The problem goes back years involving poor education and a drift from tradition type jobs into high tech without the attendant change in education.
There is no doubt that immigration is a problem when it goes too far, as some would say it has in London, England. (It wouldn't be for me personally; I see no difference in people because of their race or religion, colour or place of birth. I don’t see that some teenager with 4 kids to different fathers who has never paid a halfpenny in tax, is any more deserving of my tax payments than a girl from Somalia who has also never paid a penny in taxes. I feel no more affinity with one than the other. However, I accept that many people, also taxpayers, think that a white Scottish, or British person has more rights to a job, or welfare here than a person who is not white or not Scottish/British, so I accept that the problem exists).
On the question of the EU, I have always supported Britain’s membership, on the basis that Britain is so horribly badly run that almost any outside interference would be welcome. After all we seem to have total acceptance that we do whatever the USA tells us, but because the Germans and the French speak a foreign language there is an issue with them telling us what to do. I’m not, incidentally, accusing you of these attitudes but I know that there are many who take then nonetheless.
I probably wouldn't support OUR membership on the basis that Scotland would be far better run than the UK, and wouldn't require the close interference that the EU brings. EFTA membership would be fine for Scotland.
@tris 12.00pm
ReplyDeleteYou are entitled to reject tax powers if you want, but the SNP campaigned for these powers...
I remember standing in the street with SNP members handing out a joint Labour/SNP leaflet in support of the Yes/Yes campaign (I think I still have the t-shirt somewhere!).
Now they have quietly dropped that support, three years ago, without telling anyone and so secretly that even John Swinney refers to them in his speeches without apparently realising they have been abandoned!
As I said to Alan, the demand for £7 million from the Treasury is part, but only part, of the whole matter.
The SNP has a lot of questions to answer, not least why they campaigned for, and persuaded the Scottish people to vote for, these powers, only for them to be quietly dropped...
..and nobody was told, not even the SNP Finance Minister.......
I suppose that the years have shown that it is unusable, and in any case about to be superceded by teh coalition's Calman proposals.
ReplyDeleteAs I say, I doubt that what was enacted by parliament after a referendum of the people's will has been wiped from law. It is simply in abeyance, and can be reserected on the payment, or not, depending on who you are... Michael Moore or Alex Salmond, of £7 billion.
sorry ... that was £7 million.
ReplyDeleteEven the brits aren't that hard up that they want £7 billion from us.... yet.
tris said...
ReplyDeletesorry ... that was £7 million.
Even the brits aren't that hard up that they want £7 billion from us.... yet.
November 21, 2010 2:07 PM
Actually they have had more than that in the past few years. That helped to pay for the Tories privitisation, unemployment and sickness benefits, helped Labour fund their illegal wars etc.
LOL. I stand corrected (again!) Alan.
ReplyDeleteI should have said "yet another £7 billion"
@Tris "..simply in abeyance..".
ReplyDeleteOn the 17th of November, John Swinney said in Parliament;
'Within the Parliament's existing revenue powers, we have explored options for
maximising our income. We have been mindful of the need to consider the effect of
the significant tax rises that the UK Government has announced before we act I
therefore confirm that we will not raise the Scottish variable rate of income tax. '
So last week the SNP Finance Minister thought ( or appeared to think) that he still had these powers...
Why did he think that?
Was he telling the truth when he said it (did he really think he could use the powers or did he know that they had been scrapped, and was his speech a smokescreen)?
Who, if not the Finance Minister, put the powers into "abeyance"?
Why didn't they tell the Finance Minister what they had done and that that he no longer had the tax varying powers?
Why was the will of the Scottish people defied without notice, discussion or consultation?
Tris, you know full well that, if Labour had done this the blogs would be awash with cries of "treachery" and "lies".
The real point is Labour would not have done it or if they wanted to, they would have announced it and taken the flak, not sneaked it through without telling the serving Finance Minister...
Cutting the Finance Minister's powers without even telling him is pretty strange behaviour.
Cutting powers voted on by the Scottish population is a disgrace?
Do you agree?
If not, what do you think?
Tris, Munguin (and abody else),
ReplyDeleteI was over at another blog looking at a discussion on the same topic, and it occured to me that (i posted this over there too) Moore's letter doesn't acutally say the prior arrangement lapsed *because* the Scottish govt didn't pay what it needed to back in 2007.
It does say that the arrangement lapsed back then, it does say that the Scottish Govt didn't chuck money (7m?) at it on request this year.
I think there's a lot of premature speculation going on here.
Also, HMRC claim to still be prepared for SVR on request according to their site -
http://www.hmrc.gov.uk/manuals/pommanual/PAYE13145.htm
Looks to be a straightforward address based mechanism too for what it's worth.
btw- loving the rampant conflations of 'the power', with the mechanisms by which the 'the power' is implemented. Righteous! lol!
good posts T&M, have youz no got jobs? ;)
keep 'em coming.
BH. If the finance secretary didn't know about his right or non-right to vary income tax when he was compiling his budget, I agree completely that this is bizarre. if he did know and decided not to mention it, I still think it's bizarre.
ReplyDeleteIf, however, Labour had ever agreed not to waste £7 m of our money by sending it straight back to London, I would not just be surprised, I would be delighted, but probably only after I woke up from the dead faint into which I would have fallen.
I think it is worth reading what 'somepapfaaedundee' says below.
Dundee: I see what you are saying. It becomes more and more strange.
ReplyDeleteActually, when would the demand for money have come in 2007? That would have a bearing on the matter...
Thanks for the link. I agree that, unless HMRC is in such a mess that it is telling the Scottish government that it owes money when in fact it does not, or they have just forgotten to update their webpage (strange given the fact that a First Minister and a Cabinet minister are in discussions (in public) over this at present, the SVR is still available, and a great deal of fuss has been made over nothing.
Michael Moore of course doesn't appear to know his bottom from his elbow, and HMRC are in meltdown, so anything is possible.
It may be in fact that the Scottish government, including The Cabinet Secretary for Finance thought that the facility was still available, given that the website seems to indicate that it is.
Call Miss Marple!
Aye righteous indeed.
Thanks for the compliment about the posts. I'm always happy to read your comments on them. They certainly add a lot to the discussion.
If you ever feel inclined to write a guest article, don't hesitate to let me know!!
Ah... if Douglas Hurd could write novels whilst being the Foreign Secretary of this great country of ours, also (hat tip to Sarah Palin for that phrase), then I can manage a wee post and a joab...sans problemes!
Mind you... there's three weeks’ dishes in the sink!