18 February 2016
Fiscal frameworks and election season
This week the UK Government is facing crunch time on two key negotiations that will shape the future of the constitution of the UK.
The first, between the UK Government and the European Union, has seen David Cameron spend much of his time jetting across Europe trying to secure a renegotiation deal for the UK within the European Union. It would be hard to have missed that if you've been anywhere near the TV over the last week.
The second negotiation is perhaps getting less airtime outside Scotland but will impact the whole of the UK. This negotiation, between the UK and Scottish Governments, covers the attractively titled 'Fiscal Framework' to accompany the Scotland Bill currently going through Westminster.
Lest we forget, some context. Scotland of course voted to remain part of the UK in 2014. But it did so latterly with the promise of extra powers within the UK (called in some quarters 'The Vow') and in particular powers over the ability to raise money as well as spend it (that's a very simplified version). Following the Smith Commission process the Scotland Bill has been published which includes for example control over income tax as well as a number of other (and complicated) variations on tax powers. But…and it's a big but…all this depends on an agreed fiscal framework negotiated between the two governments…and this is where the problem lies.
Put simply the fiscal framework is the financial agreement that will underpin the changing of the tax system. At the moment the UK Government collects most taxes and the Treasury gives money to departments and the four nations through a funding mechanism called the Barnett formula. Fairly obviously with the Scottish Parliament keeping revenue from something like income tax the amount given by the UK Government will be reduced accordingly. And here comes the problem...how to do that in a fair way to the different parts of the UK, especially in the context of the continued commitment to the Barnett Formula, another aspect of the so called 'Vow'.
Just as in the EU negotiations it turns out that politicians don't want to do a deal that causes detriment to their own constituency and so we have the current stand-off. The crunch of this week comes because of the looming Scottish election in May, meaning the Scottish Parliament needs enough time to pass the agreement before it dissolves in March. At this stage it's not apparent whether an agreement will be forthcoming, though further talks are due on Friday.
The context of this is of course that Scottish election and as Christians that's where we need to focus our eyes and away from getting caught up in the technicalities of the financial agreement, whether or not it's reached over the next week. Whatever our politics the biggest concern has to be the good governance of Scotland (and the UK) over the next 5 years and promoting Kingdom values in Scotland that will be for the benefit of all.
To that end we're working with our friends at Care for Scotland on running a series of election events taking place in April. There will be a regional hustings event in each of the eight electoral regions and we'll also be encouraging and supporting local churches in holding local constituency events with the candidates. These will be complimented by a series of electoral resources from both Care and the Alliance and Care have also set up a dedicated election website www.engage16.org.uk which is now live.