OUR LATEST report at Reform Scotland compares the different post-referendum proposals from each of the five political parties represented at Holyrood.  The report, “Scotland’s Future: The constitutional report card”, looks at the parties’ proposals for powers at each level of government and compares it with its own Devo Plus proposal, which aims for each tier of government in Scotland to be responsible for raising the majority of what it spends. 

One of the most interesting pieces of our analysis concerns local government. Devolution to local government is every bit as important as devolution from Westminster to Holyrood

For that reason, most of the parties set out, at the very least, a willingness to strengthen local government.  The Scottish Greens, who favour independence, and the Lib Dems, who favour more devolution, outlined a more radical aspiration for far greater local accountability.  Labour and the Conservatives both also make a point in their reports of recommending more general power for local government.

One does not. That one is the SNP, which despite the 650-page White Paper ‘Scotland’s Future’ detailing examples of how things could change in most areas of public policy following independence, has offered no greater decentralisation from Holyrood to councils.

Our report looked in some detail at the differences between the two pro-independence parties’ proposals with regard to local government. Independence would mean the Scottish Parliament being responsible for raising what it spends, but we wanted to know how ambitious the two parties are in proposals for further devolution of power to tiers of government below Holyrood. Do they seek to ensure that independence isn’t simply swapping centralised powers at Westminster for centralised powers at Holyrood?

The Green party does; the SNP does not.

It is ironic in the SNP White Paper where the central theme is one of subsidiarity, and that decisions are best made by people affected by them, that this argument is not extended to local government. The only reference to changing the current local taxation powers in the white paper was the reference to replacing council tax with a fairer and more progressive local tax.   This desire to introduce a local income tax has been repeated recently by Alex Salmond. 

Although the type of local tax is not specified, when the SNP tried to introduce a local income tax to replace council tax in its first term, it proposed a form of local income tax which involved a centrally-set, flat rate of 3 pence in the pound.  This form of local taxation is anything but local as it is set, controlled and collected by central government.  

As the Greens, Liberal Democrats and Labour acknowledge, the centrally controlled council tax freeze has arguably taken control of that tax away from councils, something these parties wish to address. On this basis, if Scotland were to become independent and the local authorities’ taxation powers remained the same as at present, or were replaced with a centrally set local tax, Scotland would instantly become one of the most fiscally centralised countries in the world, because 100 per cent of tax income would be controlled by central government.

The table below illustrates what percentage of total taxation is controlled by central governments in other countries.  It is not simply the case that large countries, by virtue of their size, have a lower level of centrally-controlled tax revenue.  Countries such as Denmark, Finland and Norway, with populations of a similar size to Scotland, have a far lower level of centrally-controlled tax revenue. 

The Scottish Government’s white paper points to the local government structure in Germany, Denmark and Sweden.  However, it doesn’t propose to copy any of them, because in each of those countries substantially more taxation is devolved from central government.  

The fact that the Scottish Greens support an “urgent need to begin to decentralise power from Edinburgh”, highlights that there is no reason for an independent Scotland to be a centralised Scotland. 

The SNP has, in a sense, understood that people want a more powerful Scottish Parliament. How curious, then, that it seems to have failed to grasp that devolution shouldn’t stop at Holyrood. The SNP has always said it wants decisions made closest to the people whom they affect. Actions speak louder than words.

Centrally controlled tax revenue for countries by population

**2011

Alison Payne is Research Director of Reform Scotland

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