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Friday, December 16, 2016

Canny management, no sense of direction

I am sure most of us have seen how bees feed from the heather. They arc around in eager loops, sniffing curiously here and gathering nectar there. Derek Mackay's first attempt at a budget using our new tax powers yesterday brought this to mind.

He flitted from little titbits for small traders, to small giveaways for councils, back to business rate reliefs, on to education, a quick attack on the bedroom tax, a nod at growth, solemnity on support for those in need. This was finely tuned managerialism, focussed on the needs of politics, showing the present minority government as responsible in its handling of new powers.

It's not enough.

In our blog this week, we said that we hoped to see a sense of direction, an understanding of how the trend in policy needs to be made clearly in favour of an agenda that will allow Scotland to grow strongly, reduce its deficit dramatically and redraw the state's responsibilities. Instead we got busy-bee management with no visible sense of direction.

Of course we expected little more from a stoutly social democratic government, but the vacuum here was deep; this was a budget worthy of a county council not a national government. And state sponsored capitalism and corporatism still infest Scottish Government thinking.

That's a shame because we are left with another vacuum, any sense of logical principle.

So much of what Mr Mackay offered was in the guise of "I know this hurts but believe me it needs to be done". If you offer tax relief to small business this is an admission that your taxes are creating damage. If you offer big business a threshold increase on an arbitrary additional rates levy you are saying that you know you are destroying jobs and trade in that sector. If you avoid a 50 percent income tax on the grounds that it will not raise revenue, but deny a threshold increase on a 40 percent rate on the grounds that the revenue is needed for the vulnerable, you are offering a peculiar on/off logic about human behaviour. And all for a tiny static gain in revenue within the grand scheme of billions raised from income tax.

Scotland needs more. Our nation lacks confidence, somehow the politics of identity has put social support through socialist means above all else as the fuel for a better tomorrow. Catalysed by a huge lobby replete with vested interests who see access to public money as their reason for being, our political class are reduced to endless vote buying; yet the management of electoral success is a lousy way to run a country. It's even worse as a way to help those in need.

A peculiarity is that this approach is from a government who say they offer salvation for Scotland as an independent nation. Through that claim, they have raised expectations that they have a vision, a direction towards a vibrant, caring, society. Given the powers to move that way, it is sad to see the new levers they now have to do something purposeful, principled and truly progressive are being used in such a traditional haphazard manner, like hungry bees flitting around the taxpayer honey pot. Ultimately, management with no sense of direction gives the impression of bureaucratic self-indulgence; political choices by the electorate will migrate soon enough when outcomes are seen to be wanting.

We believe in fiscal self-determination for Scotland; we need it in the same way as the UK needed to depart from the EU; de-centralised power exercised in tune with the sense of place, culture and legal tradition held by those over whom that power is exercised is a vital bulwark for individual freedom. And it is that freedom alone, in economic matters particularly, that can guarantee a better future for Scotland. High taxes and more state spending certainly can't.

POSTED BY EBEN WILSON - DIRECTOR, TAXPAYERSCOTLAND 

 





'Government is the great fiction through which everybody endeavours to live at the expense of everybody else.'
Frederic Bastiat