Monday, 18 April 2016

Scottish Parliament elections - Grahame Smith's speech to Congress

Congress, the election on 5 May is the most important to take place since the Scottish Parliament was re-established. 
The next Scottish Government will wield new powers on tax, welfare, employment programmes and Tribunals - powers with the potential to make a substantial, positive difference to the lives of working people in Scotland.
These new powers broaden the canvas on which new, bold and progressive public policy can be written.
The new Government must break from the conservative mind-set that has afflicted successive Holyrood administrations. The next Scottish Government really has to aspire to more than just managerial competence.
Unfortunately, the campaign going on around us doesn’t yet reflect the possibilities offered by these new powers. In all the leaders’ debates, hustings and newspaper features there has been nothing of substance said about economic development in Scotland; no serious programme set out to reduce inequality; and the increasingly precarious nature of employment has hardly rated a mention. 
It is as if the financial crisis, the consequent recession and the years of austerity and stagnation which followed weren’t sufficiently painful to provoke new and radical thinking.
The General Council statement before you today includes 10 key demands of the parties contesting this election. If acted upon, these demands will lead to a fairer, more resilient economy and a more equal and democratic society.
Let me focus on two of these.
The first is tax. Much political wind has already been expended on this issue.
Unfortunately, the proposals we have heard so far have been generally weak and, in some cases, they blatantly contradict the wider social and economic objectives they are apparently designed to achieve.
Tax policy needs to be bolder and more creative – particularly from the parties of a social democratic bent.
We haven’t, as yet, had an opportunity to study the SNP and Labour manifestos, but we have a good idea what they’re likely to say about income tax and local taxation.
To be fair, Labour and the Lib Dems have signalled their intention to increase income tax in an effort to mitigate the impact of public spending cuts, particularly those forced on local authorities.
The SNP’s position, especially the pathetic excuses for refusing to increase the marginal rate of tax on earnings over £150,000, is hugely disappointing.
I’ve said it before and will say it again: the Nordic style society the SNP continually say they aspire to, simply cannot be created and sustained on current levels of taxation.
The second of our demands I’d draw attention to is on inequality.
It is remarkable, and very encouraging, that reducing inequality has, over the last few years, become a mainstream issue and has been given such prominence by the current First Minister.
However, it is deeply disappointing that no Party has come close to presenting a credible, coherent plan for reducing inequalities of income, wealth and power in Scotland.
Too often a welcome focus on poverty reduction has been used as cover for refusing to take action on runaway incomes at the top. An effective strategy must tackle inequality from both ends.
We need bold, ambitious policies that addresses some hitherto intractable problems in the Scottish economy and society, policies based on the evidence of what works rather than their populist appeal or soundbite suitability.
In health, where you live should not determine how long you will live.
How well you do in school, college or university or in the world of work should be about your ability and how hard you work, not your social class.
Some of our communities have not recovered decades after the loss of traditional industries.
Addressing these longstanding issues should be the priority for our politicians.
We should expect nothing less of our political leaders.
All of them need to raise their game.
Current levels of inequality weaken the economy, reduce societal cohesion and undermine democracy.
The Panama Papers have pulled back the curtain on the lives and attitudes of the wealthy to reveal nothing but sneering contempt for their fellow citizens and the rules by which any decent society must adhere.

The rich can shift their wealth offshore and absolve themselves of any responsibility to contribute to the society that allowed them to accrue that wealth in the first place.
And then, of course, they invest that wealth in lobbying for a politics which is increasingly hostile to any substantial redistribution and the role of unions and collective bargaining in bringing that about.
Of course, we won’t hear any talk of offshored wealth from the Tories contesting the Scottish Parliament election – they’re too busy rebranding themselves as cuddly, progressive sorts who have the best interests of Scotland’s workers at heart. Aye right!
Ruth Davidson certainly presents a more convivial demeanour than George Osborne. Hardly a difficult task!
But by failing to seriously challenge austerity, welfare reform and the Trade Union Bill she is entirely complicit in the UK Government’s attack on society’s most vulnerable people, on workers and unions – and no amount of one-liners or photo opps will conceal this inconvenient truth.
Ultimately the Tories attempted transition to the non-nasty party is almost as funny as the malicious buffoons of UKIP in Scotland trying to masquerade as a serious political organisation.
During Congress we will hear from the leaders of our two main parties.
We expect to hear that they understand the real issues currently facing workers and their communities;
  • that they are willing to use the knowledge and experience of unions and their members to shape policy; and
  • that they have a vison for Scotland that matches the ambition of its citizens for sustainable economic and social progress.    
This election should be a marker in the development of Scotland’s democracy. The ability of the new Scottish Government to introduce policies in support of the people we represent is about to be considerably strengthened.
The demands the General Council has set out today provide the template for a new Scotland.
We need a Government with the courage and passion to grasp the opportunity.
Let’s hope such a Government is elected on 5 May.

Congress, I commend the General Council statement to you. 

Trade Union Bill - Pauline Rourke, CWU speech to Congress on behalf of STUC General Council

Congress, Scotland’s trade union movement meets this week here in my home city of Dundee to discuss and constructively debate a huge range of issues that affect the lives of ordinary working people.
The STUC is Scotland’s largest and most progressive civic organization and I’m proud to be part of it. The rights at work now taken for granted by so many are the result of the industrial and political campaigns vigorously fought by our proud forbears.
We are a great civic movement, one that has helped create a better, more just society.
Many may quite legitimately disagree with our objectives and priorities and the policies we will ultimately agree this week. But it takes a very particular and malicious mind-set to perceive the men and women gathered here today as ‘the enemy’. 
I’m afraid that is precisely the mind-set from which the TU bill sprung.
When the majority tory government came to office last May, the new business secretary identified his immediate and defining priority to be an attack on trade union’s ability to effectively represent working people. 
Not how to design and implement an effective industrial policy.
Not defending steel jobs against Chinese dumping.
Not addressing appallingly weak productivity growth.
Not strengthening historically weak wage growth or boosting low business investment.

No, Said Javid regarded an attack on trade union rights to be the single most important issue for his department of business, innovation and skills to address. Has there ever been a more outrageous example of a government getting its priorities back to front? 
Congress, the Trade Union Bill is unnecessary, unjustified and undemocratic.
The attack on facility time, on the political fund, on the right to strike, are all attacks on the right of unions to speak out against austerity; against low wages, to speak up for equality, for fairness in the workplace and on international injustices. 
Resisting this bill, as the General Council has done and will continue to do,  is not just about defending trade union rights, it is about defending fundamental civil liberties and human rights; rights that recognise that the democratic wellbeing of our society demands that workers have a meaningful collective voice in the workplace. 
It is our voice, in and out of the workplace, that this Bill is intended to silence. 
The Tories have quite deliberately set out to tie unions up in endless bureaucracy. Through a level of interference in our activities that goes way beyond what is reasonable in any democracy, they will severely restrict our ability to properly represent our members and to provide an effective voice in the workplace and beyond. 
At the core of this is the right to strike.
Without the ability to strike, workers will have no effective voice at work. They will be left with no alternative but to accept the decisions of the employer, whatever the consequences.
There will be no fairness or justice or democracy in the workplace.



Congress, the General Council has led a dynamic and successful campaign against the Trade Union Bill in Scotland.
We have succeeded in uniting political and civil society opposition to the Bill. 
The Scottish Government and a large number of local councils, have not only publicly condemned the bill, but have pledged not to cooperate with the legislation if it is eventually forced through. 
Working with the Wales TUC we have exposed the incompatibility of key provisions of the bill, including the attack on facility time and check off, with devolved competencies which is likely to result in these provisions not applying in Scotland and Wales. 
We have also received pledges from the Scottish Government, Scottish Labor and the Scottish Greens, that they will refuse to implement any aspect of the bill that conflict with the duty on the Scottish Parliament, enshrined in the Scotland act, to uphold international human rights obligations. 
I can assure this congress, that should any of our unions be forced into a position where they have to defy the law in order to effectively represent their members, they will have the General Council’s full support and the support of the collective, organised Scottish trade union movement, through the STUC.
We know that the most effective way to resist the impact of the trade union bill, to mitigate the impact of austerity, and to achieve economic and social progress is to continue to organise in our workplaces and communities and to find new and innovative ways to engage with non-unionised workers, particularly young workers.
This is exactly what we are doing with through Better than Zero; an increasingly successful campaign focused on the experiences of young workers, run by young workers. A campaign that is demonstrating right here right now that trade unions can make a tangible difference to the lives of young workers.

And we shouldn’t lose sight of the fact that unions are fighting and winning industrial disputes across the country: since congress met last year Dundee hospital porters, Glasgow care workers, further education lecturers, railway and ferry workers have all taken industrial action and won.

Congress, the Trade Union Bill is a wholly unwarranted attack on the working people of this country. The General Council is resolute in its opposition and stands ready to support and coordinate ongoing resistance to this affront to democracy. I ask you to support this composite.

Tuesday, 12 April 2016

It’s a funny old world

It’s a funny old world when the Trades Union movement and the ancient House of Lords combine to defeat a reactionary Tory Government, not once, but three times!

But that is what we did on 16th. March on the Trades Union Bill, which is attempting to shackle the Trades Union movement and slash TU funding of Labour in a way even Thatcher baulked at.

This Bill, the brainchild of Cameron and Osborne, is being pushed relentlessly by the right wing ideologue, Nick Boles MP, and the hapless Baroness Neville-Rolfe who has no authority to make concessions in the Lords.

So we have mounted one of the best coordinated assaults on a Bill I have ever seen. There has been unprecedented cooperation between the TUC, STUC and Labour Peers.

At a meeting with Frances O’Grady she identified the key areas we should fight on as the threshold in strike ballots, political funds, facility time and check off.

John Monks, Former TUC General Secretary, who made one of the most powerful speeches against the Bill at Second Reading suggested this strategy.

We then established we had the support of the Liberal Democrats, thanks to the leadership on this of Ben Stoneham, formerly of the SDP.

So we now had to work hard to get support from the Crossbench Peers who hold the balance of power in the Lords.

This was done through a meticulous canvass, planned by the movement, to approach as many as possible to explain the arguments and seek their support.

As an example, I worked closely with Karen Whitefield and Michael Wheeler of USDAW with a list of potential supportive Crossbenchers I had identified.

The arguments were then made. Why is it possible to elect MPs, councillors, Police Commissioners with no threshold but there must be one for strike ballots. Why can there be electronic voting for the Tory candidate for Mayor of London but not for TU ballots?

Why take action on the funding of Labour but not other parties as had been agreed previously. How can we have facility time elsewhere in Europe but not in the UK.

The first success was when we defeated the Government and set up a special Select Committee, chaired by former top civil servant, Lord Burns, to look into political funds. This produced, as we had hoped a compromise proposal.

But the master stroke came on 16th. March when we were due to vote on this and other amendments at Report Stage.

Our Labour Bill Committee met and agreed the strategy put forward by John Mendelsohn. All the arguments had been made in Committee. We needed to get to the votes quickly so there would be no Labour speeches from either the Front or Backbenches. The Liberal Democrats went along with it.

It had also been agreed that the key amendments would be moved by Crossbenchers. Lord Burns moved his Committee compromise on funding and another former head of the civil service, Bob Kerslake, moved the other two.

The tactics were spectacularly successful. On the two Kerslake motions on Ballots and facility time we had majorities of 140 and 88 respectively. On the Burns amendment on funding it was 148, the largest Government defeat I have seen in the Lords.

The second day of Report stage is on 19th. April when we debate and vote on Check off and we expect another victory then.

So far the Government remain defiant in spite of these defeats and it is expected they will overturn them with their majority in the Commons, although Jeremy Corbyn has promised vigorous opposition.

We will then have what is called “ping-pong” between the two Houses. This is when the Lords is expected to eventually give way to the elected Chamber where the Government claim they have a mandate.

Usually the Crossbenchers cave in under this pressure of precedent. But with such huge majorities it is not certain this time and we can try to extract compromises.

Foolishly the Government have imposed a deadline by announcing that the Queen’s Speech will be on 18th. March May so they must get their Bill through by the week before that.

Now is the time for the STUC to redouble their already powerful opposition to this Bill and to put pressure on the Crossbench Peers to stand by the principles they so powerfully displayed last month.

One thing is certain. Labour Peers will be there in large numbers to continue leading the opposition to this despicable measure. We defeated the Tories on their plan to cut child tax credits and showed that we can do it again when we think the Tory controlled Commons is wrong.

Don’t get me wrong. I still want the Lords replaced by a Chamber with democratic authority, like the Senate of the Nations and Regions Labour proposed in our Manifesto

But while the Lords exists and we can muster majorities to defeat repressive and regressive legislation we should continue to do so.

George Foulkes
Former MP and MSP and GMB member




Thursday, 26 November 2015

No Racism: Refugees Welcome Here

The St Andrew's Day Anti-Racism March and Rally this year has the theme 'No Racism: Refugees Welcome Here.' The rally will take place on Sat 28th Nov, Assemble 10:30am Glasgow Green. Below is a Guest Blog from Nicola Sturgeon MSP, the First Minster of Scotland on the importance of this March.

In September, just before a humanitarian summit on Scotland’s response to the refugee crisis I had the opportunity to sit down for a cup of tea with people who have made their home in Scotland after fleeing persecution and war in their own country. 

As we talked, it became apparent that they had been made to feel extremely welcome in Scotland and all of them were keen to contribute positively to society. Later, some gave powerful testimonies in the summit itself, describing how they had brought their families here to make a new home. 

Listening to their stories, it was clear that the decision taken by these people to leave their own countries had not been an easy one. Anyone who risks taking their family on what can be a treacherous journey does not do so without having exhausted all available options at home. 

That is why we must recognise that the desperate situation in which people arriving on Europe’s southern shores find themselves is a humanitarian crisis. These people come to Europe and the United Kingdom, not to “scrounge from our welfare state” or “steal our jobs” but because they have no choice if they want to keep their families safe. 

In responding to this humanitarian crisis, I have made it clear that we stand ready to accept our fair share of refugees. Indeed, we expect to take around a third of the total number coming to the UK before Christmas. 

That has meant an immense amount of work by local authorities and other partners such as the Scottish Refugee Council and the STUC, to ensure that those arriving in Scotland are able to integrate successfully into society. 

But it has also demonstrated the wider desire, across Scottish society, to pitch in with practical help to some incredibly vulnerable people. We have been inundated with offers of support from members of the public, businesses and organisations from all parts of Scotland. 

All of this has meant that, as the first people seeking refuge from the war in their own country have begun to arrive in Scotland, they have been assured of a very warm welcome.

Nicola Sturgeon
First Minister of Scotland 

Wednesday, 25 November 2015

No Racism: Refugees Welcome Here

The St Andrew's Day Anti-Racism March and Rally this year has the theme 'No Racism: Refugees Welcome Here.' The rally will take place on Sat 28th Nov, Assemble 10:30am Glasgow Green. Below is a Guest Blog from Kezia Dugdale MSP, Leader of the Scottish Labour Party on the importance of this March.


Scotland has a proud record of being a multicultural and welcoming country. The last few months, as the refugee crisis has escalated, we have seen this welcoming and empathetic culture at its very best.

A few weeks ago I joined a rally outside the Scottish Parliament, saying loudly and proudly that refugees are welcome here. Outside the Parliament were lined candles, messages of support and messages to David Cameron, condemning his poor response to some of the most vulnerable people in the world. I was proud to light a candle and immensely proud of the public response; young and old, of different cultures and different backgrounds, people coming together with one powerful voice. It is this collectivism and this inclusiveness that will always defeat bigotry and racism.

Scotland's response has been phenomenal. We have had families open the doors to refugees, volunteers collecting hundreds of bags and boxes of donations and fundraising pouring in. A particularly heartwarming response has come from our local authorities. Glasgow was the first UK city to accept Syrian refugees, In Edinburgh we've committed to support 100 refugees, in the Highlands 30 more, and these are just a few examples, there are countless more examples of solidarity.

Whether it was when Glasgow awarded the key to the city to Nelson Mandela or when crowds of public have lined the streets peacefully against the BNP or SDL, we have said no to racism before and I hope people across Scotland will continue to do so. We can never be complacent about bigotry, we can never assume that because we are tolerant others will be too. It is an activism that must be conveyed in or daily actions, we must all take it on ourselves to call out racism when we see it or hear it.

Silence condones it, our rallying and our protests condemn it.


Kezia Dugdale
Leader Scottish Labour Party

No Racism: Refugees Welcome Here

The St Andrew's Day Anti-Racism March and Rally this year has the theme 'No Racism: Refugees Welcome Here.' The rally will take place on Sat 28th Nov, Assemble 10:30am Glasgow Green. Below is a Guest 
Blog from Patrick Harvie MSP, Co-convener of the Scottish Green Party on the importance of this March.

Europe is facing the most severe refugee crisis for generations, and as winter sets in the human toll is already unbearably heavy. Yet in the UK and many other countries, the voices of racism and xenophobia are heard, including in government, denying the human dignity of those seeking refuge and seeking to close the door on them.

All too often people are encouraged to view refugees as a burden, rather than as fellow human beings. In reality, it is those who are forced to leave their homes, often undertaking perilous journeys, who bear a burden. Wealthy countries such as ours are in a privileged position in being able to help, and it is vital that we resist and oppose the hostility, selfishness and racism which is intended to undermine the empathy and compassion which should guide our actions.

I believe that most of Scottish society, and the majority of Scotland’s political landscape, does reject those racist attitudes. But we can never relent in making that clear and in challenging racism where it continues to exist, whether in a position of power or anywhere in our society. So the Scottish Green Party is proud to support the STUC’s St Andrew’s Day march and rally, and we will work with you to ensure that Scotland is united in offering refugees the welcome and the security which they need and deserve.

Patrick Harvie
Co-convener of the Scottish Green Party

Tuesday, 24 November 2015

No Racism: Refugees Welcome Here

The St Andrew's Day Anti-Racism March and Rally this year has the theme 'No Racism: Refugees Welcome Here.' The rally will take place on Sat 28th Nov, Assemble 10:30am Glasgow Green. Below is a Guest Blog from Ruth Davidson MSP, Leader of the Scottish Conservative Party on the importance of this March.

Nobody could fail to be moved by the humanitarian crisis which continues to unfold. 

The testimony of the men, woman and children who risk everything they have to escape an intolerable situation, is hugely affecting.

The UK is a moral nation and we fulfil our moral responsibilities.

I am proud that we are the first G7 nation to meet its commitment to spend 0.7 per cent of our economy on aid. I am pleased, too, that the UK is allocating £1 billion in aid and development programmes to help with the Syrian refugee crisis – more than any country bar America. The Prime Minister has also appointed a new Minister for Refugees

It is right too, that our country has offered sanctuary to 20,000 refugees, resettled directly from camps in Turkey, Jordan and Lebanon. 

Importantly, this approach balances the need to give shelter, with the need to discourage vulnerable families from making the dangerous journeys across the Mediterranean. 

But simply accepting refugees is not enough. 

We have to support our local communities, too. That is why we will use the foreign aid budget to help councils provide critical services, such as housing. 

The challenge now is to build on our commitments. Those coming here fleeing the worst of circumstances need to feel welcomed.

We must all continue to do our bit to ensure that Scotland’s cultural and racial diversity is seen as one of our nation’s great assets, rather than as a threat. For this diversity is something which makes our country, and, especially, our cities, such incredible places to live and work.

We all have our own part to play in championing this message. 

That’s why it is so important that this STUC No Racism rally - and others like it- continue to take place to ensure we can promote a future without racism. 

The STUC has long shown an admirable commitment to this fight and I stand proudly with them.

Ruth Davidson 
Leader Scottish Conservative Party

No Racism: Refugees Welcome Here

The St Andrew's Day Anti-Racism March and Rally this year has the theme 'No Racism: Refugees Welcome Here.' The rally will take place on Sat 28th Nov, Assemble 10:30am Glasgow Green. Below is a Guest Blog from Willie Rennie MSP, Leader of the Scottish Liberal Democrats on the importance of this March.


In recent years we have made substantial progress towards tackling prejudice and our country is a better place as a result.

But attitudes towards those seeking sanctuary in our country have been slower to change.

Too many people still view refugees as an unnecessary burden. With the Prime Minister and tabloid headlines warning of “swarms” of migrants coming to our shores, it is easy to see how these views can persist.

The refugee crisis is the biggest humanitarian challenge that Europe has faced since 1945. Our response to the crisis needs to match the scale of this challenge.

And just as we speak out against racism, we need to ensure that we are challenging those who would see us ignore our obligation to help.

We must not allow those who would use this tragedy as an excuse to pull up the drawbridge to win the argument.

We must not let prejudice and small-mindedness prevent us from helping people who need our support desperately.

The failure of the UK government to accept more than a fraction of the refugees we should be helping is enormously disappointing.

Britain has always been a country that welcomed refugees, from those fleeing religious persecution in the 17th century, to the children saved through the kindertransport ahead of World War II. Now is not the time to abandon these historic values.

We can do more to help. We must do more to help.

It is down to all of us who would see us react to the refugee crisis with tolerance, openness and compassion to speak with one voice and send a strong, clear message.

Refugees are welcome here.

Willie Rennie MSP
Leader of the Scottish Liberal Democrats

Monday, 23 November 2015

No Racism: Refugees Welcome Here

The St Andrew's Day Anti-Racism March and Rally this year has the theme 'No Racism: Refugees Welcome Here.' The rally will take place on Sat 28th Nov, Assemble 10:30am Glasgow Green. Below is a Guest Blog from NUS Scotland on the importance of this March.

NUS Scotland are proud to be supporting the St Andrews’ Day March, a demonstration of the strength of our united movements against racism and fascism. Migrants to Scotland contribute huge amounts to our society and it’s important that we celebrate this valuable contribution at every opportunity. St Andrew’s day particularly, gives us an important opportunity to show the strength of positive feeling that exists across our community to the importance of standing up for those potentially fleeing persecution, and seeking a better life, in Scotland. 

With the refugee crisis growing, and the disgraceful anti-immigration rhetoric we’re seeing from sections of the media and politicians across the UK, it’s rarely been more important to unite in opposing racism everywhere it rears its ugly head. Far too often we see negative stories about people risking everything to try and escape the destruction of their home countries, but we’ve also seen this met with positive actions to help those caught up in the crisis, a crisis caused by circumstances beyond their control.

The student and trade union movement has a strong history of supporting internationalism, and fighting racism and fascism. Even in the last few weeks, students and students’ associations across Scotland have mobilised in response to the refugee crisis we’ve seen, setting up “drop off” points, where students donated vital items to refugees in Calais. We’ve also seen campaigns up and down the country calling for better support for our refugee and asylum seeking students, leading to scholarships being introduced at the University of Edinburgh and Strathclyde. 

Our own Black Students’ Campaign has been instrumental in the campaign against the forced deportation of one of our students, Majid Ali, who was taken to Pakistan despite concerns for his safety in the country. While this is a distressing example of this government’s disgraceful attitudes to some of our brightest students, Majid’s is by no means a unique case, and it is a campaign we fight day in, day out. 

As the St Andrews Day March demonstrates, Scotland has a huge number of fantastic organisations and individuals campaigning against racism and fascism. However, it’s frankly a disgrace that the responsibility to support for asylum seekers and refugees, some of the most vulnerable members of our society, has been left solely to our grassroots activists while the government turns its back on them. 

We look forward to working in solidarity with partners across Scotland to change this, and fight the government’s appalling attitude towards asylum seekers and refugees. 


Vonnie Sandlan, NUS Scotland president

Sanjay Lago, NUS Scotland black student’s officer

Friday, 20 November 2015

We were all once refugees!

The St Andrew's Day Anti-Racism March and Rally this year has the theme 'No Racism: Refugees Welcome Here.' The rally will take place on Sat 28th Nov, Assemble 10:30am Glasgow Green. Below is a Guest Blog from Ephraim Borowski, Scottish Council of Jewish Communities on the importance of this March.

When you see the pictures of the tens of thousands of refugees fleeing into exile each day from the civil war in Syria, does it engage your compassion, or your sympathy, or your ideology? Do you truly empathise with their plight? Do you feel what they feel? Do you know what it is really like to be expelled from your home, to have to flee for your life and to risk your life to save your life, to have no-one to take you in?

Sadly, that’s a story Jewish people are very familiar with – Jewish history has more than its fair share of exiles, from the biblical narrative of the famine that forced Jacob and his family to leave their homes near Beersheba south of Jerusalem to buy food in Egypt where like so many of today’s refugees, they were subsequently forced into slavery, through expulsions by the Babylonians, Romans, the Crusades, the Inquisition in Spain, pogroms in Eastern Europe, the Holocaust, and, most recently, from Iraq, Yemen, Syria, and North Africa. 

Like many of today’s exiles, the Jewish people have always dreamed of returning home. The Exodus from Egypt is not merely an incident in history, but is mentioned daily in prayers, and commemorated in the three “pilgrim festivals” that recall each stage of the journey: the Exodus itself, on Passover, when the tribe of Israel became the Jewish nation; the revelation on Mount Sinai that we celebrate on Shavuot, and the 40 years of wandering in the wilderness, recalled by the ramshackle shelters that we build and live in for the week of Succot. Although the biblical Exodus was for us a return, a positive experience, as history has shown it was, ultimately, only a temporary relief.

So we identify and empathise with today’s refugees because exile and homesickness are so ingrained in our identity and our faith and our history. We remember the precariousness of being a refugee, taking that risk because the uncertainty of surviving the exodus was preferable to the certainty of extinction if they stayed behind. For me that was echoed in one of the many tragic stories from the current crisis, of the Syrian surgeon whose wife and daughter had drowned, but who still said that it had been rational to take that risk.

The Jewish people went as migrants to Egypt; we escaped as refugees from Egypt; we were exiled again by the Romans. We travelled across Europe – and back again. My mother’s family came to Glasgow to escape pogroms in Russia, my father to escape the Holocaust. And we are not the only ones – nearly every family in Scotland has a story of migration, from the Vikings, the Saxons, and the Normans to the Irish, the Asians, and the Eastern Europeans. Who are we to close the door behind us? It’s not “There, but for the grace of God, go I”, but “Here, by the grace of God, came I”.

Ephraim Borowski
Director
Scottish Council of Jewish Communities

Wednesday, 18 November 2015

Fiscal framework has the potential to make or break the new devolution settlement.



Deputy First Minister should refuse to sign up to Fiscal Framework unless the right block grant adjustment can be agreed.

 

STUC General Secretary Grahame Smith today warned that key new powers enshrined in the Scotland Act could become a poisoned chalice if the Fiscal Framework currently being negotiated between the Scottish and UK Governments fails to meet the ‘no detriment’ principle as agreed by the Smith Commission.

 
The STUC has been an advocate for strong additional powers for the Scottish Parliament, particularly in the area of taxation.

 

“However, we have always been absolutely clear that the value of the new powers, particularly those relating to new welfare spending and tax raising, were dependent on an appropriate Fiscal Framework.  We recognise that negotiations between the two governments are sensitive and ongoing, but there has been far too little public debate on this issue.

 
Over the next couple of weeks we will be assessing three key elements of the Fiscal Framework all of which will impact on the calculation of the Scottish Block Grant in years to come:

  1. How, will the Scottish block grant be adjusted to take account of additional spending flowing from the devolution of new powers - primarily welfare?
  2. What mechanisms will be put in place to allow the block grant to be adjusted to reflect specific UK and Scottish Parliament spending decisions where they have a direct impact on the finances of the other body.
  3. Following the initial adjustment of the block grant to compensate for the devolution of taxes to the Scottish Parliament, what method of will be used for block grant adjustment in future years.  How will this impact in Scotland?
     
  4. Today we make comment on the impact of the devolution of new taxes, primarily income tax and raise serious concerns that if the method applied for year on year adjustments to the block grant is not right, very severe detriment could result.  This would call into severe question whether the Scottish Parliament should accept the new tax powers.
  5.  
    “We have reviewed some of the relevant literature on this subject and conclude that Scotland could find itself disadvantaged to the tune hundreds of millions in a relatively short space of time if the wrong method is applied and that this figure could reach the billions over a longer time period.
     
    “In this context, it would be completely wrong for the Deputy First Minister to sign up to a mechanism for block grant adjustment which would structurally disadvantage Scotland. It would also be entirely wrong for the Scottish Government’s political opponents to characterise an appropriately firm bargaining position as the Government ‘dragging of feet’ on new powers. The Fiscal Framework is absolutely central to the impact of further devolution and it would be entirely wrong to sleepwalk into a bad deal.”
     
     Fiscal Framework
     

  1. The STUC has argued, in a view taken during the referendum and prior to the ‘Vow’, Smith Commission and subsequent Scotland Act, that the Fiscal Framework surrounding the new powers over tax and spending had the potential to ‘make or break’ the new devolution settlement.
  2. This concern is amplified by the nature of the powers finally agreed for transfer; the transfer of income tax powers isn’t balanced by a sufficiently wide basket of other tax powers.
  3. Key factors include the fact that Scotland’s share of the UK total income tax revenue is below its population share due to the concentration of high income tax earners in London and the South East of England; and that the Scottish population is predicted to grow more slowly than that of the rUK.
  4. The ‘no detriment’ principle is very difficult to apply and remains the subject of varying interpretations.
  5. The three key questions are.

  1.  How will the Scottish block grant be adjusted to take account of additional spending flowing from the devolution of new powers - primarily welfare?
  2. What mechanisms will be put in place to allow the block grant to be adjusted to reflect specific UK and Scottish Parliament spending decisions where they have a direct impact on the finances of the other body.
  3. Following the initial adjustment of the block grant to compensate for the devolution of taxes to the Scottish Parliament, what method of will be used for block grant adjustment in future years.  How will this impact in Scotland?
     

  1. This paper deals with the third of these questions and concludes that, if the wrong adjustment method is adopted, severe reductions in Scottish Parliament revenues can be predicted which would infringe the ‘no detriment’ principle and call into question whether the devolution of income tax as laid out in the Scotland should be accepted by the Scottish Parliament.
  2. The year one calculation is reasonably simple.  The Block grant will be increased by the quantum of spending currently attached on the UK responsibilities to be devolved and then decreased by the amount of revenue the Scottish Parliament would have raised if it already had the new tax powers – primarily income tax.
  3. The calculation for following years is far more complicated and outcomes are very sensitive to the methods applied.
     
    No detriment and the devolution of powers
     
    The STUC recognises that the Smith Commission’s recommendations on ‘no detriment’ are subject to variable interpretation and can be applied in different ways.  In the STUC’s view, the application of ‘no detriment’, as it relates to the calculation of the future block grant, are:
     

  1. The initial adjustment to the block grant to reflect changes in tax and spending powers should be revenue neutral. For the tax revenue component of this, the initial calculation should be a deduction from the Scottish block grant of the sum that will be derived from the newly devolved Scottish taxes.
  2. The adjustment in subsequent years should allow for different impacts where Scottish Parliament tax and spending policies differ from that of the UK Parliament.  This implies that if Scottish tax revenue should rise or fall consequent to policy decisions to alter rates or thresholds; or if there are differing levels of economic growth, the benefit/detriment should be retained by the Scottish Parliament.
  3. The adjustment in subsequent years should employ a method which guarantees (as closely as is possible) that had there been no changes in policy or variation in relative growth, the block grant deduction would retain maintain parity with the tax raised in Scotland through newly devolved taxes.  In short, if there is no difference in economic performance or tax rates between Scotland and the rest of the UK, public spending in Scotland should be no higher or lower than under the current funding framework.
     
    Thus, the principle of ‘no detriment’ as it applies to the adjustment of the block grant to reflect the devolution of tax revenue streams is maintained initially and in future years without impacting on the principle that the effect of differing fiscal policy decisions should impact on the Parliament which takes such decisions.
     
    Indexing options
     
    Clearly, the revenue derived from taxation will differ year on year.  Over a period, revenues can be expected to increase as a consequence of overall growth.  Thus, in most years, the quantum of both UK and Scottish income tax should increase, leading to an increase in revenue for the Scottish Parliament from income tax and a larger deduction in the block grant reflecting overall growth in tax receipts. 
     
    The initial adjustment figure is a lump sum, which requires no formula save an agreed figure for what constitutes the Scottish share of income tax receipts (principle a).
     
    Subsequent adjustments cannot be made using the same method otherwise the calculation would fail to recognise potential policy variations (principle b) and therefore a formula is required by which changes in UK tax receipts and Scottish tax receipts can be reconciled with the appropriate deduction to the block grant.
     
    The STUC has reviewed the currently available literature on methods of adjustment[1] There is more than one way in which this future adjustment can be calculated. Remembering that the overall figure might vary as a consequence of different growth rates or tax policy, it is still possible to predict how the various methods for the adjustment would impact on the revenues of the two parliaments assuming no divergence in policy or growth (principle c).
     
    All of the options for indexation retain the same Year 1 adjustment figure as is consistent with principle a), but take a different approach to how the increase in the block grant deduction is calculated.
     
    Option 1 – Level deduction (population share of rUK change in tax receipts is added to baseline deduction each year)
     
    This option would calculate the additional amount by which the block grant is to be reduced by each year based on Scotland’s population share of the change in comparable tax receipts in the rest of the UK (rUK). 
     
    This method would create a disparity between the block grant deduction and the increase in Scottish Parliament income tax receipts. This is because Scottish income tax receipts are lower per capita than across the UK as a whole (largely driven by the concentration of higher rate tax-payers in London and the South East).  Scotland accounts for 8.3% of the UK population but 7.3% of UK income tax receipts, the annual block grant deduction will therefore be greater than the growth in Scottish income tax receipts – even when income tax receipts are growing at the same rate in Scotland and the rest of the UK.  This indexation method therefore guarantees that even when Scotland matches the economic performance of the rest of the UK its budget will be smaller than that provided under the current funding framework.
     
    This breaches the no detriment principle outlined earlier that the effect of the devolution of income tax should be revenue neutral, assuming comparable growth rates and non-divergent tax policy.
     
    The effect of using this method would be that, over a period, Scotland’s public spending relative to the rUK would be significantly damaged.
     
    Option 2 – indexation against relevant UK tax receipts in the rUK
     
    Option 2 would index the annual block grant deduction to the overall increase in comparable tax revenue in the rUK.  However, as rUK population growth is expected to exceed Scotland’s, the annual block grant deduction will, over time, exceed the growth in Scottish income tax receipts – even if per person receipts in Scotland and the rest of the UK grow at the same rate. 
     
    Scotland does not have key devolved powers such as migration policy, which might enable it to proactively increase its population relative to rUK. This method of indexation therefore also conflicts with principle c), that all other factors being equal, Scotland’s relative fiscal position should not deteriorate. 
     
    Option 3 – indexation against relevant UK tax receipts in the rUK adjusted for population growth
     
    The best, and in the STUC’s view, fairest approach, is to index the initial baseline adjustment to the growth in relevant rUK tax receipts (Option 2) but to make a subsequent  adjustment taking into account the change in relative population growth between rUK and Scotland.  In the case of income tax, this would mean indexing the initial block grant adjustment to the growth in per person income tax receipts in the rest of the UK.
     
    This method gets closest to compensating for the disparity in tax base between Scotland and rUK which is [largely?] a consequence of UK macro-economic and fiscal policy; and the predicted slower rise in Scotland’s population relative to the rUK, a trend the Scottish Parliament does not have the powers to substantially influence.  It means that if income tax receipts per person grow at the same rate in Scotland and rUK, and tax rates are the same in both countries, public spending in Scotland will be exactly the same as it is under the current funding framework.  This therefore achieves the Smith Commission’s no detriment principle
     


 

Appendix 1

 

Level Deduction Worked Example
Year 1
Year 2
Rest of UK Income Tax Receipts[2]
£145 billion
£167 billion (15% growth)
 
 
 
Scotland – Income Tax Receipts[3]
£11 billion
£12.7 billion (15% growth)
Block Grant Adjustment (BGA)
£11 billion
£13 billion
Impact on Scottish budget
(Scottish Income Tax – BGA)
£0
-£300 million
Calculation for the BGA in year 2 is as follows
Year 2 BGA = Year 1 BGA + (Scotland’s population share[4] of change in rUK receipts))
Year 2 BGA = £11 billion  + (9.1%* (£167bn - £145bn))

 

Indexed Deduction per capita Worked Example
Year 1
Year 2
Rest of UK Income Tax Receipts
£145 billion
£167 billion (15% growth)
 
 
 
Scotland – Income Tax Receipts
£11 billion
£12.7 billion (15% growth)
Block Grant Adjustment (BGA)
£11 billion
£12.7 billion
Impact on Scottish budget
(Scottish Income Tax – BGA)
£0
£0
Calculation for the BGA in year 2 is as follows
Year 2 BGA = Year 1 BGA * Growth in rUK Income Tax Receipts per capita, multiplied by Scottish population growth
Year 2 BGA = £11 billion  * (1.15/1.06) * 1.06
 
Notes
For simplicity, the calculations assume that the population grows at the same rate in Scotland and the rest of the UK (0.6%). In this case, tax receipts per head would also grow at the same rate in Scotland and the rest of the UK and indexed deduction and indexed deduction per capita yield the same result.

 

The above examples illustrate the differences between the level deduction and  indexed deduction methods under the assumption that population growth is similar in Scotland and the rest of the UK.  However, latest population projections indicate that Scotland’s population is expected to grow less quickly than in the rest of the UK. In this case, if tax receipts per capita grew at the same rate in Scotland and the rest of the UK, Indexed Per Capita Deduction  would ensure that Scotland’s budget is no better or worse off following the devolution of income tax whilst Indexed Deduction would not. This is because even if per person receipts in Scotland grow in line with the rest of the UK, aggregate receipts may not due to slower population growth.


Dave Moxham