IN response to Westminster’s cynical mini-Budget, John Swinney says “Scotland is at the mercy of UK decisions” (Handouts for the rich underline the need for indy, says Swinney, Sep 24). This is only true so long as Scotland fails to use the devolved tax powers for which the SNP and Greens fought so hard.
The report by the Scottish Government’s own Social Justice and Fairness Commission in June 2021 urged the introduction of land value taxation (LVT) as part of a reform to replace council tax, business rates and Land and Building Transaction Tax. Campaigning organisation the Scottish Land Revenue Group went even further in a 2018 paper, calculating that a partial shift towards LVT would enable the scrapping of those three taxes and a huge reduction in income tax, slashing the basic rate to zero and the higher and top rates to 20%.
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If that sounds too good to be true, the Scottish Government should liaise with Adam Price, the Plaid Cymru leader, who later in 2018 made a strikingly similar proposal, using LVT to enable council tax and business rates to be scrapped and income tax to be reduced by 9p across the board. While the UK Government gambles by funding its tax cuts with borrowing on a massive scale, Scotland could use the huge revenue-raising potential of LVT to balance its books.
The great economists agree that LVT is economically non-distortive. The 2011 Mirrlees review “Tax by Design” for the IFS states: “Taxing land ownership is equivalent to taxing an economic rent – to do so does not discourage any desirable activity.” And: “Economic activity that was previously worthwhile remains worthwhile. Moreover, a tax on land value would also capture the benefits accruing to landowners from external developments rather than their own efforts.” In his 2012 book The Price of Inequality, Josef Stiglitz asserts that “it is highly efficient to tax rents because such taxes don’t cause any distortion. A tax on land rents doesn’t make the land go away.”
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In a separate article, Michael Russell observes that “one of the main sources of the wealth that underpins privilege in Scotland is land” (This group is central to Scotland’s landowning problem, Sep 24), and acknowledges that we have not tackled land reform as thoroughly as we should. LVT is the key to neutralising the privilege of land monopoly. Those who claim to own the country would be responsible for its running costs.
We cannot allow ourselves to be wrong-footed by the irresponsible actions of a UK Tory government. LVT provides the crucial link between land reform and tax reform. The Scottish Government must recognise that and make creative use of its devolved tax powers.
John Digney
Buchlyvie, Stirling
I AM sure that almost everyone in Scotland has benefitted from some of the extras provided by the Scottish Government.
Scotland has a long tradition of public services, a free or subsidised health service existed in Scotland long before the establishment of the National Health Service, and I am both pleased and proud that our devolved parliament decided to make this the norm in Scotland.
I have not tried to assess the cost of what I have received or how much extra I have paid in tax over the years, so have no idea whether I am a net beneficiary or contributor, but I am happy to pay my share of extra tax for the additional benefits that have been made available for anyone living in Scotland.
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It will be some time before the full effects of the mini-Budget are apparent as this UK Government’s published information and predictions can never be taken at face value because of U-turns, broken promises and vague or misleading statements.
For example, pensioners have to take into account almost £500 per year of real money that they would be receiving now if the Tories hadn’t reneged on the triple lock, and every home is affected by the UK Government’s “saving” on energy bills that is only postponing part of the crippling increase.
Since devolution the Scottish people have elected successive Holyrood governments that have implement social policies that have diverged so far from those of Westminster governments that we have reached the parting of the ways.
Fortunately we are in a voluntary union that can be amicably dissolved with goodwill on both sides. We can remain friends and allies while pursuing our own ends.
John Jamieson
South Queensferry
ACCORDING to the Chancellor of the Exchequer, Conservative governments have tried redistribution of wealth but it has not worked. Perhaps this is a reference to the National Insurance rise brought in to pay for under-funded social care, now reversed.
In any case, it seems redistributive initiatives are now old hat, although income tax in Scotland is a devolved matter. The uncosted fiscal event points towards trickle-down economics, or what was called Reaganomics back in the day, with the tax giveaway conceivably providing enough of a consumer bounce to see the Conservatives through the next election.
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At a time when inflation and interest rates are rising, tax cuts will be paid for through increased borrowing and quantitative easing. In its attempts to attract businesses and high earners, the other element of the plan is likely to be further deregulation of certain sectors and continued austerity in wage settlements.
An alternative manifesto for long-term, sustained investment, education and training, to support the diversification of industries, in addition to fiscal support for firms operating in the London financial services market, remains a vague aspiration. The same goes for any countenance by either of the main UK parties for closer links with the EU, the world’s largest consumer market, contrary to the wishes of what is now a clear majority.
Peter Gorrie
Edinburgh
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