IAIN AD Mann (Letters, September 8) appears to be of the view that should the Scottish Government decide for its own reasons to increase its spending in Scotland on "improved welfare benefits or to stimulate the economy in any way " then that increased spending should not have to be funded by the Scottish taxpayer. His underlying reasoning seems to be political because that would be "a poisoned chalice", aka a vote loser. Presumably for the same reason, he would not wish to have to fund it by the Scottish Government cutting back on expenditure elsewhere in Scotland. Should the Scottish Government go its own way and increase spending on devolved matters, one obvious consequence will be for it to "man up" and face the consequences of having to fund that increased spending from its own resources rather from the UK Treasury.
Alan Fitzpatrick,
10 Solomon's View, Dunlop.
I AM grateful to Iain AD Mann for his comments that complement those in my letter (September 7) about the flawed income tax powers vis-a-vis the Barnett formula.
He prompts further clarification which might serve to complete the narrative.
The Barnett formula will continue; its basic calculation would have to remain, even notionally, using the respective English and Scottish block grants – that means a one per cent squeeze on our Westminster funding, which would lose us about £250 million on £25billion.
As Mr Mann explains, we would retain the transferred income tax proceeds. These would be determined annually by HMRC and their estimated figure would be incorporated into the Holyrood budget, starting in 2016-17. Apart from doubts about assessing accurately that revenue, much of the money would trickle in well beyond the end of that year.
Had we proper access to the tax proceeds, we could have increased income tax by 1p (£500m) every two years to make up the Barnett shortfall, but we cannot do that because that would only trigger a further reduction in block grant. And if HMRC fails to produce accurate figures, and on time, we could have a budgetary black hole requiring filling by borrowing – at extra cost to taxpayers.
The most significant phrase in Mr Mann’s letter is “[It is] a poisoned chalice for any Scottish Government, no matter what political colour”. It is disingenuous for Scottish Secretary David Mundell to bait the SNP regarding what use they will make of the new welfare powers when they did not want these powers, although they are content to regard then as no more than a stepping stone. The real challenge should be to the three Unionist parties, whose powers they are, because by targeting only the SNP he is unwittingly ceding victory to them.
It was inevitable that any new tax proceeds should be deducted from the block grant, because the English consider we are subsidised by their tax payers since we can’t be self-sufficient, so if we can afford more tax, we don’t need their subsidy. And it is they who dictate the terms. So, it is lose-lose under the Smith proposals.
Douglas R Mayer,
76 Thomson Crescent, Currie.
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