John Swinney last night said he was likely to defer the Con-Lib cuts until next year. Presumably his Liberal and Labour opponents in Holyrood cannot complain about this since it was the position they campaigned for in the UK election eg cuts this year will damage recovery.
It is important to remember that this does not constitute the injection of cash the SNP wanted in order to boost recovery. Unlike the US, Britain has no stimulus plan. Without economic powers of its own - not even borrowing powers - the Scottish parliament cannot have a stimulus plan either.
This move by Swinney is the minimum he is allowed to do and it is Westminster's gift. If the plan works, Scotland's economy will pick up, more people will be in work, businesses perhaps will make modest profits or expand. This is the best case scenario. But we will not directly reap the benefit of our increased tax take. We will get a double whammy cut in our block grant next year calculated on the performance of a UK economy that could be back on the critical list.
It's a brilliant illustration of how Scotland is served poorly by the current constitutional arrangements.
The sooner we have full economic powers in Scotland the better.
Perhaps you can enlighten me Joan. Does the Scottish govt receive any of the take from income tax collected in Scotland? (I'm pretty sure it doesn't).
If it doesn't, why not vary income tax down by 3p?(the max allowed).
This would obviate the stupidity of a system that grants us 'pocket money' according to how much is spent in England (excluding intangibles of course and projects for the entire nation's benefit like the London to Birmingham high speed rail link or the London Olympics or the London any number of other things).
It's a strange situation to be in for a nation that reveres self reliance so much.
Posted by: David Park | May 20, 2010 at 01:05 PM