Holyrood and Westminster at war over oil and taxes (long, but important).
- From: The Highlander <micheil@xxxxxxx>
- Date: Thu, 29 May 2008 17:19:15 -0700 (PDT)
Published Date: 30 May 2008
By Peter MacMahon and Hamish MacDonnell for the Scotsman.
BIG guns were wheeled out yesterday in the battle over independence:
their ammunition – oil and taxes. It is a battle that has been
building for 21 years, ever since two Scots, then aged 33 and 32,
entered the House of Commons as young and inexperienced MPs on the
same day in June 1987. Yesterday, they clashed, not just as Scottish
MPs from rival parties but as politicians at the height of their
powers.
Alistair Darling, the Chancellor and Gordon Brown's closest political
ally, was one; Alex Salmond, the First Minister and leader of
Scotland's first Nationalist administration, was the other.
Mr Darling was first into the fray, using an interview with The
Scotsman to launch his most sustained, detailed attack to date on the
SNP's flagship policy of local income tax.
He didn't stop there. He also dismissed the SNP's call for oil tax
revenues to be distributed to Scotland and for a "fuel tax regulator"
to limit the rising price of fuel.
Within half an hour, Mr Salmond was on his feet at Holyrood, telling
of the "fury" in Scotland over the UK government's refusal to use its
oil-tax windfall to help families and companies cope with crippling
fuel prices.
"A massive national outrage" was how he described Scotland's position
as one of the world's top oil producers but with nothing to show from
the massive extra revenues being generated as a result of rising
prices.
Yesterday's clash showed how central the arguments over oil have
become to the future, both of the government in Westminster and of the
Union itself.
Faced with fuel protests in London, anger over rising domestic fuel
prices and an economy under severe strain, the Chancellor knows the
Labour government's hold is precarious.
The First Minister knows that, too, but he also suffers from the
frustration of watching billions in extra revenue, which he believes
should flow straight into Scottish coffers, propping up his political
opponents in London.
Mr Salmond has had a fairly easy first year as First Minister – but a
tough past week. For the first time, he has appeared on the defensive
as experts and political opponents have undermined flagship policies
on local income tax, the Scottish Futures Trust and his pledge to cut
early-years class sizes.
It was in that context that yesterday's war of words took place.
The Chancellor was adamant: the SNP's "sums do not add up" and local
income tax would be a "massive mistake". He went on to claim that,
despite its claims to be waiting for answers from the Treasury, the
Scottish Government was "refusing to talk" to the UK government.
Mr Salmond was equally clear about what he regarded as a betrayal by
the UK government of Scotland's interests.
"I believe that we must, as a parliament and as a country, make a
claim on the huge additional resources flowing into the United Kingdom
Treasury as a result of sky-high fuel prices. That must be done,
because that is where the financial flexibility is available to meet
the pressures," he said.
Until now, the Scottish Government has isolated a number of issues,
such as firearms legislation and control over fishing negotiations, as
issues of contention.
Yesterday's decision to challenge the UK government so directly over
oil showed that Mr Salmond is now prepared to put this issue right at
the heart of his fight with ministers in London.
For the Chancellor, his intervention on the SNP's tax plans represents
a clear signal of the determination of the UK Labour Party to take on
the Nationalists on their own ground.
'Daft tax that will damage Scots on world stage'
ALISTAIR Darling yesterday warned the SNP's plans for a local income
tax (LIT) would be "a disaster" for Scotland's vital financial
services industry.
The Chancellor argued that the Nationalists' tax plans would act as a
deterrent for Scottish firms trying to attract high-flying business
executives north of the Border.
Mr Darling also maintained that Alex Salmond's government had not
approached the Treasury to seek to use Her Majesty's Revenue and
Customs (HMRC) to introduce the tax.
Last night, Mr Salmond would only say that his administration was "in
the process" of discussing the move with the Treasury.
The Chancellor's broadside – ahead of a meeting with leaders of
Scotland banks, insurance houses and investment businesses today –
signals an intensification of Labour's anti-SNP rhetoric.
Mr Darling, who has been under attack over everything from possible
fuel duty hikes to threats by firms to leave the UK due to higher
taxation, attempted to throw the focus back on the Scottish
Government.
He said: "Local income tax would be a disaster for the financial
services industry.
"If we are going to attract the best to come to and remain in
Scotland, to tell them that you are going to be paying more income tax
would be the completely wrong thing to do."
The Chancellor added: "I meet the Scottish industry a lot and it's the
first thing they mention. They are concerned by this proposal.
"In terms of the analysts, the experts, the people who make this
industry work, if you start losing these people who say, 'I think I'll
go and work in London or another part of the world', that would be
hugely damaging. That is why the industry is so exercised about it."
Executives in banks and insurance companies have remained silent in
public on the issue, but Mr Darling's remarks are sure to strike a
chord with them. Senior figures in the financial services industry –
which accounts for around 7 per cent of Scotland's GDP and employs
86,000 people – have grave reservations over LIT.
Mr Darling refused to be drawn on reports that the Treasury believes
the Scottish Parliament does not have the power to introduce LIT. He
said: "There are lots of arguments as to whether it is legal or not.
Our criticism is that I don't think it's workable. Scotland would lose
out if we had a higher rate of income tax."
He added: "At a time around the world when, frankly, all governments
are under pressure to reduce headline rates of tax, to be travelling
in the wrong direction here is just daft.
"It is not just a UK argument, this is argument people all over the
world will be looking at it. I think Alex Salmond and his colleagues
should just put their hands up and say, 'Yes, we made a mistake, let's
just abandon this', because it would be completely damaging."
Mr Darling also claimed that the SNP was not talking to the Treasury,
which controls HMRC, over the issue.
He said: "To be blunt about it, the Nationalists are refusing to talk
to us about it. If they thought this (policy] was a goer, you would
have thought they would open up with us and say, 'Can we use the HMRC
computer systems' but they have not done it."
Yesterday, the First Minister refused to go into detail on contacts
between the Scottish Government and Whitehall.
Asked specifically about the issue, he told The Scotsman: "We are
always raising issues and sometimes we get an answer, sometimes we
don't. We are happy to discuss it. We are in the process at the
present moment. We have a set of proposals."
Mr Salmond maintained: "We wouldn't introduce a taxation that would
deal a blow to the competitive base of any industries in Scotland."
'Outrage' of soaring fuel prices in oil-rich Scotland
THE impact of rising fuel prices was yesterday branded a "massive
national outrage" by Alex Salmond, who called on Alistair Darling, the
Chancellor, to use some of his oil tax windfall to cushion the blow of
high fuel prices in Scotland.
The First Minister said Scotland had been left in an "extraordinary
position" with soaring prices at the pumps while every other oil
producer in the world was benefiting from increasing revenues.
Mr Salmond told MSPs that the UK Treasury was expected to reap an
additional £4 billion in North Sea revenues – on top of the £10
billion predicted from initial forecasts.
"There seems to be plenty of room for manoeuvre in order to implement
some of the policies to reduce the impact of sky-high fuel prices on
the people and industry of Scotland," Mr Salmond said during First
Minister's Questions.
The SNP has been basing its demand for Scottish independence on oil
for the last 30 years, but recent price hikes, which put oil at $130 a
barrel yesterday, have given the Nationalists added impetus.
The price of oil has increased the amount of money going to the UK
Treasury in tax – revenue which Mr Salmond believes should be coming
to Scotland.
The subject of oil was raised in the Scottish Parliament by SNP MSP
Jamie Hepburn, who claimed it was a "bittersweet irony" that Scots
were missing out on increasing oil and gas revenues in the North Sea.
Mr Salmond replied: "I think the mood actually is becoming one of fury
in Scotland.
"That we alone among the oil producers of the world, producing ten
times – ten times – our consumption of hydrocarbons at the moment,
should be faced with an extraordinary position that while every oil
producer, through sovereign funds and the build-up of huge sums of
capital, has the resources available to power their economy into the
future, what's left for the people of Scotland is paying sky-high
prices at the pumps and the industries of Scotland facing escalating
costs.
"A bittersweet irony? A massive national outrage – and it's time we
did something about it."
Mr Salmond added: "I believe that we must, as a parliament and as a
country, make a claim on the huge additional resources flowing into
the United Kingdom Treasury as a result of sky-high fuel prices."
The SNP's plan for the first 100 days in government included a
commitment to put in a formal demand for a share of oil revenues to
come to Scotland. That was done in a low-key and largely symbolic
fashion last summer and since then John Swinney, the finance
secretary, has written to Mr Darling asking for oil and gas revenues
to be transferred. He has yet to receive a reply.
This, though, is the first time Mr Salmond has used the public
platform of First Minister's Questions to launch such a co-ordinated
and acrimonious attack on the UK government over the issue.
The SNP wants Downing Street to introduce a fuel duty regulator which
would use the increasing revenues from VAT to reduce the duty itself,
helping the consumer.
This has secured limited support from a small number of Labour MPs,
but not from the UK government.
Mr Salmond has often used Norway as an example, principally because
the Norwegian government set up an oil fund ten years ago, saving oil
revenues. The fund is now worth £170 billion.
But the Norwegians also pay the most in Europe for petrol, at £1.21 a
litre, just ahead of the Dutch, who pay about £1.20. The average price
in Britain is about £1.14 a litre.
However, yesterday's assault showed Mr Salmond is prepared to pick a
fight with Gordon Brown and Mr Darling on an issue which is not only
reserved to Westminster, but is central both to the UK economy and the
case for Scottish independence.
No place for Brigadoon or Braveheart in the global economy
Scotland's financial sector must roll with the punches, reports Martyn
McLaughlin
IF GOOD old Scottish prudence is to prove the buoy which keeps afloat
the nation's financial services industry at a time when the tide of
the global economy is turning, there can be no better example than
Andy Hornby's last-minute decision to rename the title of his address
to the country's key financial movers and shakers.
Having taken stock of the current economic climate, the 40-year-old
chief executive of HBOS took his speech, initially branded "A Global
Success Story," and amended it to "Delivering in a Tough World".
"We are," Mr Hornby confirmed to no-one's surprise at the inaugural
Global Financial Services Conference (GFSC) yesterday, "in tough
times."
Having started out as a squeeze before turning into a slump, the
subprime mortgage troubles have, ten months on, accelerated into a
full-blown international crisis. The blame may lie largely with US
institutions, but Scotland's 300-year-old financial services sector is
not immune from the fallout.
It is a frustrating situation, but one which Mr Hornby and his
competitors yesterday sought to overcome. Held at the Edinburgh
International Conference Centre, the GFSC gathered a spectrum of
economists, senior officials, and academics to navigate a safe course
through choppy waters.
Mr Hornby was optimistic, a feeling echoed by his colleagues in the
industry. "We have to wait until well into 2009 for the return to what
we might call a sense of normality," he said.
Caledonia, it transpired, had much to be proud of, traits which could
help the sector roll with the punches.
"Scotland is a very successful brand, but it needs careful management
and branding," said David Nicol, chief administrative officer of
Morgan Stanley.
Dr Ken Lyall, chair of Walter Scott & Partners Limited offered a more
offbeat take. "The Brigadoon and Braveheart image served to
differentiate us in the 1980s. We exploited it ruthlessly," he said.
"But as we developed, that kind of idea was marginalised. We're now
operating in a global world."
Petrol 41p a litre without taxes
BRITAIN would have the second cheapest petrol and diesel in the
European Union if government duty and VAT were removed, figures
revealed yesterday.
Without the taxes, petrol would be 41.2p a litre and diesel 48.8p a
litre.
Petrol costs around £1.14 a litre at the pumps and diesel £1.26 –
provoking hauliers to demand a 25p per litre cut.
A 62 per cent tax share on unleaded was the third-highest out of all
EU member states, the quarterly Energy Trends and Prices statistics
produced by the Department for Business, Enterprise and Regulatory
Reform revealed.
Philip Hammond, the Tory shadow Treasury minister, said: "Gordon
Brown's claim that world oil prices are to blame for the soaring cost
of motoring has been exposed as a sham."
He also attacked controversial plans to restructure vehicle excise
duty, which could see drivers of less efficient older cars facing a
big tax hike next year.
A Treasury spokesman insisted that the UK was generally a low-tax
economy compared with other EU states.
BA prices begin to take off
BRITISH Airways is to hike the price of tickets as a result of the oil
crisis – with holidaymakers and business passengers flying long-haul
hardest hit.
The airline will increase its fuel surcharge by £60 from Tuesday on
return flights lasting more than nine hours. Short-haul return flights
will go up £6 while long-haul trips lasting under nine hours will
increase by £30.
The move means passengers will pay from £32 to £218 in fuel duties on
a BA return ticket.
BA said it would also increase its fuel surcharges by similar levels
in markets outside the UK.
On Wednesday Sir Richard Branson's airline Virgin Atlantic announced
fuel surcharge rises, although the carrier said that those sitting at
the front of the aircraft would face higher charges than those in
economy-class seats at the back.
In recent weeks airlines have announced cutbacks in services because
of the sky-high oil prices while some carriers, including some
operating between the UK and the United States, have gone out of
business.
£225m plan for elderly
FURTHER details on how £225 million of funds being provided by energy
companies will be used to help pensioners living in fuel poverty are
due to be announced at Westminster today.
The government is to provide the firms with personal details of people
claiming pension credits so they can receive fuel rebates and energy-
saving grants to keep their homes warmer.
The move comes as Stephen Ladyman, a former Labour transport minister,
called on Gordon Brown, the Prime Minister, to "strike a new deal with
the motoring public" and cut the tax on fuel when prices at the pumps
are being driven up by global oil prices.
Mr Ladyman said a system akin to the "fuel duty regulator" proposed by
the SNP should be introduced. This would return any increased VAT
revenue received by the government from higher fuel prices into a cut
in the fuel duty paid at the pumps – currently 50.3p a litre.
He said motorists were more likely to ditch Labour than give up their
cars.
Sir Tom calls for a quick vote on independence.
ALEX SALMOND has welcomed the intervention by Sir Tom Hunter,
Scotland's richest man, who called yesterday for "common sense" and a
speedy referendum on independence to sort out the wrangles over
Scotland's future.
Sir Tom said a vote was needed to allow the nation to move on – either
as an independent country or as part of the UK. The billionaire tycoon
and philanthropist said he wanted a "considered debate" followed by a
referendum.
In an article in yester
ADVERTISEMENT
day's Scotland on Sunday, Sir Tom accused Scotland's political parties
of "posturing, positioning and pontificating" over attempts to reform
the constitution. Despite this, his call for a referendum was welcomed
by Mr Salmond.
The First Minister said: "Opinion is coming down between those who
believe in the right of the people to determine Scotland's future – a
position carrying 80 per cent support – and those who don't.
"The SNP's first choice is to have a 'for or against' referendum on
independence and that 2010 is the right sort of timescale."
Sir Tom's intervention in the debate comes after Labour, the Liberal
Democrats and the Conservatives announced they planned to support an
independent commission to examine more powers for Holyrood, but
without full independence.
But Sir Tom also attacked a suggestion by Mr Salmond that a referendum
might be held under the Single Transferable Vote (STV) system. Under
the system, voters list their preferences in order.
The tycoon said that such a system – which he describes as "Simon
Cowell's X Factor voting system" – could not be used to determine
Scotland's future.
The SNP wants a referendum in two years on whether Scotland should
become independent, but, at present, lacks majority support to get
this through Holyrood.
Scottish Labour leader Wendy Alexander said: "Sir Tom Hunter is
certainly right that there's no way we should go down the route
suggested by Alex Salmond.
"It's an absurd notion that he could gerrymander the vote and break up
the UK without a straight majority."
.
- Prev by Date: Re: Culture shocks in killing fields as Scots train an army of Allah
- Next by Date: Re: Salmond backs plans for Islamic faith school
- Previous by thread: Ping Madra Dubh
- Next by thread: Kidnappings
- Index(es):
Relevant Pages
|
Loading
