They say one man alone can’t change things.
Tell that to Alex Salmond: He just upended the tax policy of a government which he (in theory) no longer leads.
Over the weekend Mr Salmond broke ranks and joined the chorus of condemnation over the SNP’s inaction on business rates. Entrepreneurs, especially those in the tourism and hospitality sectors, had complained that rates revaluation meant their non-domestic levies were soaring.
The revaluation, the first since 2010, was carried out by an independent body but finance secretary Derek Mackay was under pressure to intervene and help businesses, some of whom warned they could go to the wall.
Mr Salmond is a mystery cat and his choice of words was sly and subtle. Rather than directly attack his former colleagues, the MP for Gordon opined: “Of course there’s an argument against some of the rates rises and of course people feeling the hard edge of it and in the north-east there’s a very legitimate case…”
Lo and behold, Mr Mackay popped up in the Scottish Parliament yesterday to announce that, Sorry, there had been a terrible misunderstanding. These crippling spikes in business rates? The ones we said we definitely couldn’t do anything about? Well, of course, what we meant was that we’ll be doing something about them.
Namely, he would be extending the small business bonus to firms valued up to £15,000, taking 20,000 companies out of the rates altogether. This meant almost half of Scotland’s rateable commercial properties were now unburdened by the charge. Rates increases on hotels, pubs and restaurants would be capped at 12.5%.
Special measures would be taken in Aberdeenshire, ‘in light of the downturn in the North Sea economy’. (The closest we’re likely to get to an oil and gas bulletin any time soon.) By sheer coincidence, the finance secretary was capping office rates rises and providing relief for renewables schemes in the very part of the country his old boss had expressed concern about.
All in all, it was quite the U-turn. Or as Murdo Fraser put it for the Scottish Tories: The SNP government ‘falls asleep at the wheel and wakes up only when it crashes the car into a wall’. Though it seems on the rates issue Mr Salmond lunged for the wheel in just enough time.
Contrary to what the little bowler-hatted man in the adverts assures us, tax does seem to be rather taxing for the SNP.
Take their totemic pledge back in the halcyon days of 2007, trumpeted on the campaign trail and emblazoned on billboards: ‘We’ll scrap the unfair council tax’. Their touted replacement was the incongruously named local income tax (LIT), which would in fact be set centrally, and attracted a broad coalition of opponents who warned it would be inadequate and inefficient. So LIT was shelved until 2011, when the Nationalists secured their Holyrood majority, but by then they only wanted a consultation on ‘a fairer system’.
Alas, that unexpected majority meant an independence referendum was now on the cards. Fairness is great and all but a bit of a drag when you’ve got a country to divide. By March 2016, the excuses had run out and the game was a bogey. The hated council tax was staying after all, with some tinkering to claw more cash from those in the top four bands.
And what of the vicissitudes of the LBTT? Not an exciting new gender category but the Land and Buildings Transaction Tax, John Swinney’s much-heralded replacement for stamp duty. The then finance secretary boasted that his reforms would see 90% of Scots paying less than homebuyers in England. The roof caved in when George Osborne, then Chancellor, pulled off his own stamp duty trickery and cut the cost for almost all properties. This would have left one in five shelling out more under LBTT and the fiscal ferret was promptly reversed.
Being outsmarted by George Osborne is like the baby stealing candy from you. But the pattern of Nationalist disarray over revenue doesn’t stop there.
The SNP has had so many conversions on income tax that the road to Damascus is blocked to all other traffic. Pitching to replace Labour in the 2015 election, the Nationalists pledged themselves to Ed Miliband’s policy of a 50p rate of tax on incomes above £150,000. Left-wing votes banked, and 56 bums on seats at Westminster, the revolution was quietly called off and the filthy rich (read: Middle Britain) got to keep their heads off pitchforks a while longer.
Twelve months on, and facing another election at Holyrood, the 50p commitment was flushed down the memory hole. ‘It would not be radical. It would be reckless,’ Nicola Sturgeon told MSPs. ‘It would not be daring. It would be daft.’ She still supported a 50% rate across the UK, mind you; she just didn’t support it in a parliament she had any power in.
At least the Scottish Government was consistent on the 40p higher rate. Mr Mackay promised to raise the £43,000 threshold in line with inflation and that was that. Ah, but along came Patrick Harvie and the Scottish Greens, with their vindictive agenda against hard-earned success. To secure Green votes and pass his budget, Mr Mackay would have to freeze the threshold and snatch back a modest tax cut from 370,000 Scots. With the Treasury upping the threshold to £45,000, taxpayers north of the border would be stung for around £400 a year more than their counterparts down south. Mr Mackay duly relented, the Greens were appeased, and families paid the price.
The SNP are terrible muggers. They can’t even pick our pockets properly.
Not all of these foul-ups were his fault but this latest one reflects poorly on Mr Mackay. His modifications will be welcomed by those for whom they ease the strain a little. Still, it’s not clear if there should be much joy over this sinner who repenteth. When Mr Mackay talks about a rates relief package, the relief is for himself. This episode was another droplet in the drip-drip trickle of suspicion that he is simply not up to the job.
Hailed as the Nationalist king-in-waiting, even those who had high hopes for him must admit he has failed to live up to early promise. All too often, he has appeared indecisive, unsure of himself, and increasingly out of his depth. He gives the impression of a trainee bank manager left in charge of the branch.
Governments run into trouble when they hike up taxes too high. When they slash too deeply they are forced to make commensurate cuts in public spending — or rack up more debt. The SNP is hither and thither, caught between its socialist self-image and the poll-driven reality of this most triangulating of administrations.
If the Nationalists gain a reputation for incompetence on tax, they will open a major line of attack for Ruth Davidson. Now more than ever, they must project confidence. That’s difficult to do when business owners look at your finance secretary and wonder if their premises are the only things that are overrated.
Originally published in the Scottish Daily Mail. Contact Stephen at email@example.com.