Monthly Archive January 2019

ByQuantum Communications

Is a tourist tax the rabbit in the budget hat?

By Alan Roden

The Scottish Budget is a peculiar affair.

Sometimes, it produces great drama – such as the moment it was voted down in 2009, despite ministers passing notes in the Chamber in the hope of last-minute support.

Sometimes, it is a desperately dull moment – such as when it sailed through last year with the support of the Greens.

Generating public interest can therefore be difficult (although the devolution of income tax has made a significant difference).

This year, the stage is set for drama.

The Greens are, so far, withholding support from the SNP minority administration, demanding more money for councils in return for their support.

Taking a leaf out of Alex Salmond’s book during the SNP’s first minority term, SNP MSPs are now openly warning of the risk of an election.

Few expect that to come to pass.

But Finance Secretary Derek Mackay will have to pull a rabbit out of the hat, and Holyrood observers are keenly speculating on what that might be.

Mr Mackay has insisted there is ‘no unallocated money’ that can be found to hand to councils, but there are other options available to him.

The Herald today reports that the Greens are ready to make a deal if ‘ministers row back on ring-fencing in local government’ – that’s the money to fund central government policies such as expanding early learning and childcare.

There is also the option of introducing a tourist tax, or Transient Visitor Levy. Or, more specifically, handing councils the power to introduce a tourist tax – something the Greens (and Labour) have argued for.

Edinburgh City Council – led by a coalition between the SNP and Labour – has long been agitating for this, and a recent consultation found 85 per cent support. The proposal would raise around £11million-a-year. The Highlands is also another area where a TVL could be introduced.

There is, however, strong opposition from some business leaders, who fear it would hurt the accommodation sector.

So it’s a policy that could certainly backfire in economic terms. But, if that happens, it won’t be Derek Mackay’s fault. He will not impose a TVL on councils or set the rates – merely give them the option to do so.

Individual councils will be tasked with making it a success or dealing with the fall-out if it goes wrong.

For the SNP, it’s a win-win scenario. Announce the plan this Thursday and it might be enough to secure support from the Greens for the budget to pass, without needing to find any extra cash from government coffers for councils.

ByQuantum Communications

Brexit – the view from Brussels

By Alan Roden

In the offices, restaurants and bars that populate Brussels’ European quarter, the questions are the same as those in Westminster or Holyrood.

How is Theresa May going to get her deal through the Commons?

Will the UK actually leave the EU on March 29?

Is there going to be a General Election or a People’s Vote?

Nobody really asks in the expectation of a decisive answer – they just want the latest theories so they can shake their heads and express incredulity.

When it comes to the British Prime Minister, there is a some respect for her among the advisers and diplomats who make their living from the EU. They are clearly impressed that she keeps on going against all the odds.

But there is little sympathy for her. They believe her ‘red lines’ are the reason there is parliamentary deadlock in the UK.

The withdrawal agreement will not be re-opened unless those red lines are abandoned, they insist. The options of a customs union and/or membership of the Single Market are available, as they always have been. But they are adamant there will be no minor tweaks.

The March 29 deadline is now widely dismissed, and the expectation is that the EU27 will agree to an extension until June 30/July 1, to avoid ‘no deal’ happening by default when the two-year Article 50 timetable runs out. There is also talk of an extraordinary European Council meeting in February.

They hope Brexit will be reversed, but they don’t expect it to be. Britain’s reputation in Brussels is tarnished.

In contrast, there is huge admiration for Ireland, and the Irish in return are extremely grateful that Europe sees its border with the UK as the ‘EU border’ – not just the ‘Irish border’. There appears to be no chance of the Irish being abandoned in this process to secure a deal that will satisfy the DUP or the Brexiteers in the Commons.

On this, the EU is perhaps more united than ever before.

As for the UK’s MEPs – almost certainly the last of their kind – they are trying to get on with their job. Last week, the European Parliament’s internal market and consumer protection committee voted to crackdown on comparison websites. It’s the kind of work that happens week in, week out, but gets little attention in the UK Press.

The behemoths of the digital age – Google, Amazon, Huawei – all lobby hard in Brussels, and Brexit won’t change that. What will change, however, is the UK’s ability to influence decisions.

After Brexit, companies will still need a clear understanding of what is happening in Brussels. In fact, with no UK representation there, it could become more important than ever.

ByQuantum Communications

Intergovernmental relations

By Flavia Paterson

One of the fundamental issues of Brexit is the spotlight it has shone on the relationship between the UK and Scottish governments.

From Monday’s PM statement (21 Jan), we can expect her to discuss an ‘enhanced role in the next phase’ for the Scottish Government with Nicola Sturgeon today.

You could be forgiven for thinking that the UK Government and Scottish Government rarely meet or speak to each other. This couldn’t be further from the truth.

There are a number of forums, such as the nattily named JMC (EN), that take place month in and month out, supplemented with a large amount of additional meetings between relevant Ministers across Government and, separately, between their officials.

However, although this work is ongoing, the more fundamental issue is – can improved procedures for IGR (yet another civil service acronym – Intergovernmental Relations) tackle the issue of two administrations in conflict?

My money is on ‘No’.

Any changes in government procedures will not be enough for the SNP – the EU Withdrawal Act was rejected by Holyrood on the basis that the Scottish Government couldn’t veto common UK-wide frameworks (food labelling, nutritional standards etc) and nothing less than a relationship of equals will be good enough (although the SNP would clearly prefer independence). The UK Government won’t see that as devolution but a fundamental shift in the UK’s constitutional arrangements – which it is not willing to consider.

Prepare for a dismayed and disappointed Nicola Sturgeon.