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Blogs Coffee House

If Ed Miliband is the Union’s saviour then the Union is doomed

28 April 2014

2:32 PM

28 April 2014

2:32 PM

With apologies to John Rentoul, Can Ed Miliband save the Union? is a question to which the answer is God help us all.

I admit to a blind spot vis a vis the Labour leader: Looks like Gussie Fink-Nottle, thinks like a Marxist Madeline Bassett. Clever enough in a droopy kind of way but, ultimately, a gawd-help-us kind of fellow.

I wasn’t very impressed last time Mr Miliband came to Scotland and so I wasn’t inclined to be impressed by his most recent trip to Glasgow. Which is dandy because I wasn’t.

I dare say Miliband’s belief that Scottish independence would be a bad idea – for Scotland and the rest of the United Kingdom – is sincere. That this belief is in his own narrow, strategic, sectarian interest is beside the point. And, sure, we all know that Labour-minded voters in western and central Scotland are a vital constituency in the referendum campaign.

But I rather approve of Miliband’s simpering thunderous warning that an independent Scotland might be the kind of rogue state in which taxes were cut. I’d like to believe in it a little more than I do. Time – and hard learning – might bring us to that point but not before an awful lot of expensive mistakes had been made.

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Nevertheless, Miliband’s view of devolution, far less of independence, is revealing. The Labour party has proposed that the Scottish parliament should henceforth enjoy greater tax-raising powers. Not, please note, tax-varying powers but tax-raising opportunities. If Mr Miliband disagrees with the idea Scotland should be able to increase income taxes but not, by virtue of statute, be permitted the opportunity to reduce them he has not said so.

Which is telling, not just because of what it says about Miliband’s idea of devolution but also because of what it reveals about his likely approach should he ever become Prime Minister of the United Kingdom. In other words, what Miliband says about Scotland is not simply a matter of Scotland but of the rest of the UK too.

And, unfortunately, Miliband’s position is quite spectacularly incoherent. Independence is bad because it might foster “a race to the bottom” if the Scots were to cut, for example, corporation tax. Or, one supposes, any other tax. In the same way, presumably, that different levels of council tax are a more modest race to the bottom too. Tax cuts are bad, bad, bad because they inject competition between rival jurisdictions. And competition is wicked. (But in a bad way.)

Logically – if such a luxury be indulged – this might be the case regardless of the size of the jurisdiction whether it be local, national or even supra-national. It is all rather French. If taxes should be uniform within nation states, why shouldn’t they be uniform across the countries of the European Union too? Aren’t George Osborne’s corporation tax cuts also a race to the bottom unfairly penalising countries sensible enough to levy such taxes at higher rates? And if not, why not?

Still, if you could just about maintain this line on the basis that the EU is not actually a super-state it is rendered utterly ridiculous and, as I say, spectacularly incoherent by Miliband’s acceptance that a newly-empowered Scottish parliament be able to increase taxes while remaining a part of the United Kingdom.

That is, he approves of tax competition within the United Kingdom after all. A tax increase in Scotland is, in some respects, a tax break for England (or Wales or Northern Ireland). A tax advantage, certainly.

Labour, of course, are just making it up as they go along. But, again, the logic of Scottish Labour’s position – and since he does not dissent from it, presumably of Miliband’s view too – is that Westminster should not be able to reduce taxes – any tax – to a level lower than that applied in any other part of the United Kingdom. Because doing so would – must, in fact – begin a dismal race to the bottom just as surely as if that tax were cut in Edinburgh or, in time, even Cardiff or Belfast.

To sum-up then: Miliband’s Labour believes in uniformity across all the British jurisdictions. A one-size-fits-all approach to taxation. That is fine as far as it takes them but it also, logically, demands that Westminster restrain itself just as surely as it requires the devolved administrations to be hand-cuffed. Which in turn makes a fresh nonsense of Labour’s claim to believe in devolution and notional concern to make it work.

In any case, one other thing is pretty clear: Miliband believes tax increases are virtuous and tax cuts iniquitous. A useful reminder of where Labour stands as the next UK general election looms. You will pay more under Labour, wherever you live.

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