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Calman’s conclusions are as clear as mud – Sunday Times

Joan McAlpine
Sunday Times: Ecosse, 7/12/08

It was to political junkies what visiting that muddy Lapland theme park in Hampshire was to children who believe in Santa Claus — something of a disappointment. The Calman Commission has so far taken seven months, 160 written submissions and cost about £550,000. And all it has to show is a sackful of non-conclusions.
At least the reindeers have cause to cheer the commission’s interim report. It tentatively suggests there may be grounds — without getting too carried away in the moment — to devolve the issue of animal health to the Scottish parliament. More consideration will, of course, be required before Calman can make the wildly radical recommendation that Holyrood determine Rudolph’s fate.

As with Bambis, so with firearms, the misuse of drugs and energy policy: all might be better decided in Edinburgh . . . maybe. That’s not a “Definitely, Maybe”. It’s a “Possibly, Maybe”. Every other paragraph contains a phrase such as: “We are seeking further representations . . . ” or: “This [topic]is too complex to consider in sufficient detail . . . ”
The summary describes the report as “not so much an end point as a stepping stone”. If so, it is a slippery one and the authors were terrified lest they fell into the river of constitutional change. The commission was a bit more sure- footed on what it didn’t want to do, ie, answer big questions such as how Scotland raises and spends its money.

Semi-autonomous regions around the world raise their own revenue — from American states to the Basque country. Calman’s expert group of economists found flaws in them all. One of them, Andrew Hughes Hallett, professor of economics and public policy at the George Mason University in Virginia, suggested Westminster intervened in the report. “Had it been a criminal issue, you could call it tampering,” he said.

Hughes Hallett is firmly on the side of conspiracy over cock-up. If he is wrong and Calman is just a cock-up, it means the central issue of accountability flummoxed a panel headed by the chancellor of Glasgow University and including a former lord advocate, several captains of industry, academics and peers of the realm.

The commission was set up by the unionist parties, with funding mainly from London, ostensibly to improve devolution. Finance is central to that remit, so why be shy about it? Probably for the same reason Calman refused to have open town hall meetings, selected those giving evidence and vetted contributions to its website. It refuses to hear uncomfortable truths.

Both unionists and nationalists believe the Barnett formula of giving Scotland a block grant is damaging. It suggests a dependency culture and causes resentment among English people who believe Scotland gets a bigger public goodie bag than them.

Nationalists feel it fails to recognise Scotland’s contribution to the exchequer through North Sea oil and to acknowledge the riches lavished on southern England through central government spending, such as on the London Olympics.

So it is particularly embarrassing for the Calman Commission that another, truly independent body, examined the revenue issue and published its own report a week earlier. The think tank Reform Scotland asked the eminent economist Graeme Blackett and the leading tax lawyer James Aitken to find a fairer system. Their paper, Fiscal Powers, is confident and clear.

Blackett and Aitken recommend London retains all National Insurance contributions, 40% of Scottish income tax, VAT and oil revenue to meet the approximate £20 billion it spends north of the border. Holyrood would set all other taxes to fund its own spending of £30 billion. This would require an exchequer and a chancellor in Edinburgh. We would grow up at last and replace our pocket money with respectable earnings.

Reform Scotland does not advocate independence, but offers a way forward that is more dignified and fair. Calman, by contrast, is in denial. That is everything to do with politics and little to do with economics. Its own report blatantly favours the status quo, saying: “Greater tax devolution would be associated with less shared social citizenship [with the rest of the UK].”

The concept of shared social citizenship, and the Britishness that has allegedly bonded us since the Blitz, is a favourite theme of Gordon Brown’s. That is not to suggest that the prime minister intervened directly in Calman. He did not need to. One of Labour\’s appointments to the commission is Lord Elder, his confidant, friend and adviser.
Perhaps they felt the nation’s mind was elsewhere — like whether we will have jobs next Christmas — and wouldn’t notice the cynical stone-walling. Confidence is dented by the collapse of our once venerable banks. Comparisons with Iceland did make Scots stop and think. The financial crisis is the first test of the nationalist government and its attempts to build a movement for independence.

But the shock of the banking crisis is proving short-lived. Fright is being replaced by searching questions. A collapse in sterling may be around the corner. Our debt is as unsustainable as our financial sector is diseased.

Never mind Scotland, it’s UK plc that resembles Iceland on steroids. The eurozone looks like a safer place to be and if the nationalists are clever, they will remind the voters of that in the hard weeks and months ahead.

Unionists may live to regret Calman’s complacency.