IAIN AD Mann (Letters, October 9) suggests that when a proportion of Calman Income Tax (10p currently half the basic rate) is collected in Scotland from April 6, 2016, and when the whole amount is collected here under Smith Commission proposals, maybe from as soon as 2017, the Barnett formula allocation would be cut on an ongoing basis, if a Scottish Government increased income tax rates for instance to pay for more generous welfare benefits. Such an exercise would be utterly pointless. From that date there will be a separate Scottish HMRC collecting Income Tax, a proportion initially, and the consequent reduction in the Barnett formula will be once and for all. Scottish HMRC will collect the devolved tax here in Scotland; it remains here in Scotland.
It will be important to scrutinise that once-and-for-all split very carefully, as simply to split on population basis will be to Scotland's disadvantage. We don't yield as much as the proportion of our population, 8.4 per cent. We do yield disproportionately more on consumption taxes such as VAT. Negotiations about the income tax split are currently ongoing and Mr Mann would be better to focus his attention on that rather than make incorrect claims.
And our annual budget has not been reduced every year since 2010. For 2015/16 in real terms it is higher than it has been for each year since 2011/12, and higher than it was up to 2008/09. In 2009/10 and 2010/11 the devolved budget was higher in real terms, by an aggregate of just under one per cent. What the nationalists attempt to mislead us with here is that preallocated government expenditure, what can be predicted in advance, has been reduced. Expenditure as you go along, what can't be exactly predicted in advance, has risen. And that isn't because of poverty - more claimants. Benefit payments hitherto haven't come out of the Scottish budget.
Devo-max needs a Scottish central bank acting as a lender of last resort. It would be no panacea.
Neil R Allan,
4 Dundarroch Road, Ballater.
IAIN AD Mann (Letters, October 9) expresses his frustration at how additional powers and related tax raised will incur a balancing reduction in the block grant under the Barnett Formula. It is only SNP spin during the referendum that has created the myth that getting more powers - or through independence all of them - will somehow magically create an additional pool of money.
The point of the additional powers is to enable future Scottish Governments to have more say over the difficult decisions of where limited resources are to be used. More money to spend on various poverty easing measures for example, could come from cutting spend elsewhere or increasing the rate of tax raised.
As for that Barnett formula, most dispassionate observers view it as being reasonably generous to Scotland, certainly compared with devolved funding going elsewhere in the UK. It would hardly be fair to expect there to be no proportionate adjustment for tax raised at present rates and retained in Scotland under the new arrangements.
The big challenge for the SNP Government is to now demonstrate that it can be as effective in using new powers as it has been with its rhetoric in blaming others. The daily news of performance issues, resource shortfalls and low morale in those services that the Scottish Government has been responsible for to date does not auger well in that regard.
Keith Howell,
White Moss, West Linton, Peeblesshire.
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