A Glimpse Of The Future?
It was the
afternoon of Friday 7 May 2010. Following
some nail-biting recounts, the final results
of the UK General Election were in. After
months of polls showing a Conservative lead,
a collapse in the Lib Dem vote allied to a
last minute swing to Labour had resulted in
the first hung parliament at Westminster
since 1974.
The
Tories had a majority of votes and seats in
England. Labour, despite suffering heavy
losses at the hands of the SNP, still
returned 25 MPs from Scotland. There were
bitter scenes at election counts, as Labour
candidates, victorious and vanquished,
vented splenetic attacks on the ‘nats’ and
the ‘numpties’ in the Holyrood Labour group,
whom they blamed for their predicament.
Despite this, those 25 seats were enough to
keep alive the hope that they could remain
in office.
The Lib Dems,
smarting from a halving of their
representation, repeated their demands for
PR. However, there was no appetite amongst
either Labour or Conservative to comply and
after what was being seen as a disastrous
result, a consensus developed quickly that
the Lib Dems were in no position to play for
such stakes. As in the aftermath of the
Scottish elections, a feeling began to
emerge that the Lib Dems weren’t really
serious and would rather slink away to lick
their wounds.
All manner of
previously unthinkable permutations began to
be mooted in a bid to break the deadlock.
Slowly, attention turned to the sizeable
group of SNP MPs. Unthinkably, the
arithmetic had fallen in such a way that the
SNP could either return Labour to power, or
stand aside to allow the Conservatives to
form a minority administration, from whom
they could then pull the rug at any time.
Days passed.
After copious quantities of caffeine and
nicotine, rumours began to circulate of a
breakthrough. With Labour emissary Douglas
Alexander insisting that the SNP take the
Labour whip on English-only matters as the
price of any deal, and offering only a
Commission without timescale on funding
arrangements for Holyrood, SNP negotiators
found it easier than expected to walk away
and let events run their course.
Correspondents
filed excited reports from College Green.
Gordon Brown, nails bitten down to the
quick, was urged by the loyalists in the
last ditch to try and form a ‘national’
government. Receiving bad advice from a
fatigued inner circle and with willingness
to accept Realpolitik in short supply, it
fell in the end to Jack Straw and the
Cabinet Secretary to break it to the Prime
Minister that his time was up.
Things began to
move quickly. The Government Jaguar and
Special Branch Range Rover whisked David
Cameron to Buckingham Palace. As ever, the
honeyed tones of a Dimbleby captured the
moment for the benefit of an expectant
nation. And there, blinking in the sunlight,
Britain had its first Conservative Prime
Minister in 13 years, albeit one leading a
minority administration.
First Minister
Salmond was amongst the first to offer his
congratulations, even extending an
invitation to meet at an early date at Bute
House in Edinburgh. Later that afternoon, a
grinning Angus Robertson was spotted walking
along Downing Street to hold preliminary
talks with Cameron, his Chancellor George
Osbourne and the new Scottish Secretary.
Despite feverish
speculation, in the end it turned out that
no deal had been struck. Without the
interference of the SNP, the Conservatives
were – just - able to legislate in England.
However, the SNP presence was enough to
secure early concessions on Council Tax
benefit, allowing their Local Income Tax
policy to be introduced before the 2011
Holyrood elections. Attendance allowance,
withheld in a fit of pique after the
introduction of Free Personal Care in
Scotland, was also subject to a swift
rethink.
It
couldn’t last, though. English commentators
on both left and right began to fulminate
about this ‘Scotsgelt’ and demands to scrap
the Barnett formula reached a crescendo. The
SNP response was simple – their MPs would
vote to end Barnett, but only in exchange
for greater financial powers at Holyrood.
Faced with the prospect of a new election,
Tory backbenchers fell swiftly into line
with a policy which many of their senior
figures had secretly been favourable towards
for quite some time.
Meanwhile, the
Scottish Government, still riding high in
the polls, was looking forward to the 2011
election. Having won fiscal freedom from
Westminster, the so-called ‘Wendy
Commission’ had been completely outflanked
and had collapsed in recrimination.
Holyrood’s unionist majority had still voted
down the referendum bill, but despite
protestations to the contrary, no-one
seriously believed that was the end of the
matter. For one thing, even if no referendum
deal was possible in Edinburgh post 2011,
there was now an avenue which could be used
to deliver at Westminster.
David Cameron
really hadn’t wanted to go down in history
as the PM who ‘lost’ Scotland, but
eventually, it just seemed like the best
option for everyone. With a popular SNP
administration in Edinburgh and the party
holding the balance of power in London,
public opinion had swung against the union
on both sides of the border. There seemed
little point in delaying the inevitable and
by getting rid of Scotland’s MPs, he could
get the Westminster majority he craved. In
any case, the Tories had opposed devolution
all along, and could hardly be blamed for
what they had long said would be the
inevitable outcome of John Smith’s
‘unfinished business’.
Countries come
and countries go, he reasoned through the
bottom of a glass of Jura. As it burned on
its way down, he reflected that maybe Alex
Salmond had been right all along - the Scots
would make better neighbours than they had
lodgers.
The LIT Hits The Fan
SNP plans for
a Local Income Tax (LIT) seems to have
become the target of choice for the
opposition now that the budget and
council tax freeze have gone through. As
if on cue, out is being wheeled by
Labour and others the archetypal
hard-working, 2-income family, whom we
are being invited to believe will under
LIT be left subsidising pensioners in
big houses who live off bloated share
portfolios.
First things
first - comparatively few people are in
a position to live off their
investments, but presenting a more
balanced picture wouldn’t have the
desired effect in terms of trying to
whip up opposition to LIT. However, as a
strong supporter of LIT, I thought I’d
throw two very real examples into the
mix, which have resulted from my own
domestic arrangements over the past few
years, which help explain my complete
disdain for the council tax.
I
own a tenement flat in Edinburgh, which
when I lived there first, I shared with
my partner of the time. As a band ‘B’
property, the combined water and council
tax bill came to about £1,200, or £600
each. However, after we split up, even
with a 25% single person’s discount my
bill shot up to £900 – or about 5% of my
household income at the time.
Now, I
hadn’t become any wealthier in the
intervening period and made no more
demands of local services than I had
previously. However, purely as a result
of a change in my personal circumstances
my Council Tax increased overnight by
50%, while the bills of my neighbours
remained completely static.
Fast forward
a few years to the present. As work for
the moment requires that I have
somewhere to live in London, I rent a
room in a 4 bedroom semi-detached house
in the south-east of the city. Nice as
that particular bit of town is,
fashionable Notting Hill or Hampstead it
most certainly isn’t. Some of the houses
are in need of TLC, but creeping private
ownership and renovations are putting
the area on its way back to past
glories. All of this has resulted in a
very diverse ethnic mix, with a high
proportion of young families.
There’s also
a large number of homes of multiple
occupancy, including mine. There are 5
of us living together in the house –
myself; an IT consultant; a banker who
shares a room with his parliamentary
researcher
fiancée; and another banker.
Fortunately, we all get on very well,
although this may be helped by our
different work start times and the fact
we have a big kitchen and 2 bathrooms,
so it isn’t quite as cosy as it sounds.
Based on
salary alone, the five of us probably
have a combined annual income of between
£250,000 - £300,000 (myself and the
other researcher lag quite some distance
behind the rest!). However, as a band
‘E’ property, the bill for us all comes
to just over £1,500 – or £300 a skull if
we split it 5 ways – just 0.5% of the
total household income.
So, £900 for
living on my own in Edinburgh, but just
£300 for renting in an HMO in London. A
tax which is supposed to be based on
wealth means I now pay 66% less than I
did in Edinburgh for living in a house
which is probably worth 5 times more!
It’s an obscenity when you consider the
couple with two pre-school kids over the
road who have to pay an identical bill
out of just one income rather than our
five.
And that in
the end is my beef. No matter how you
slice and dice it, council tax hits
households with low incomes
disproportionately. Since it is based on
the value of the house, there is little
correlation between this and one’s
ability to pay. Worst of all, the
eventual bill you end up paying hits
those who live on their own the hardest.
While
being young, professional and childless
means we don’t make huge demands of the
services of Lewisham Council, on
balance, we’re happy that we’re making a
contribution towards policing, parks,
adult education, libraries, schools,
trading standards, refuse collection,
the fire brigade, social services etc in
the area. Splitting the bill 5 ways
makes us better off financially, but I
don’t think any of us would object
seriously to being asked to make a
bigger contribution given that we’d all
be more than capable of so doing.
There will
be winners and there will be losers in
any change to a tax system – something
which those calling for council tax
revaluations and extra bandings and
additional rebates would be wise to
remember. Instead of conjuring up
grotesque, false spectres of families
being downtrodden by the supposedly idle
rich, Labour and the Conservatives
should be honest enough to explain why
they believe that the rich man in his
castle should pay a lower marginal rate
of tax than the poor man at his gate.
Mr
Robertson said: