Discussion regarding whether or not there is spare money to pay for various projects

[Highland37]

I was on the 158 from Inverness to Aviemore yesterday and it was pretty awful and certainly not close to what many other countries are doing with similar routes. Then there is the other routes out of Inverness. The 158s are ready for retiring soon and with the expansion of services we need to plan ahead.

Keeping with 170s and 158s just widens the gap to other countries. Personally I would support electrification and next week I will be in Norway, maybe on the Flam line, where traffic is light but the service excellent. However, I recognise that the UK is basically broke and can't afford to do this which is a shame. The MML should be electrified for example.

 

[najaB]

However, I recognise that the UK is basically broke and can't afford to do this which is a shame.

The UK is far from broke (for now). We can afford do electrification on a massive scale but choose not to.

 

[Highland37]

I would agree but the reality is that in this part of the world, we don't control the income. The Scottish Government is basically a massive local authority.

The UK is pretty much broke. Is there a public service anywhere that is not in decline due to budget cuts? Scotland Office maybe?

 

[Railsigns]

The UK is pretty much broke. Is there a public service anywhere that is not in decline due to budget cuts? Scotland Office maybe?

As najaB rightly says, the UK is far from broke. The present government would like to you think that it is, so as to build a perception that their ideological austerity drive is justified. In reality, the UK remains one of the richest countries in the world.

 

[Highland37]

Totally get that. The current lot are trying their best to move the capital from the state to their own private interests and have been pretty successful if you support this sort of thing, the railway being a good example.

However, I am going to disagree and say the UK is one of the richest countries in the world if you choose certain narrow indicators such as what the BBC, London press and those who are well off tell you. I used to be a social worker and I can tell you that there are millions of people living in poverty in the UK. One of the reasons I gave up was that most people are simply not willing to look beyond the "he UK remains one of the richest countries in the world" message and don't want to hear of information which challenges this view.

By capital, yes we are, but not by trade or debt.

 

[tomatwark]

I would agree but the reality is that in this part of the world, we don't control the income.

YES we do.

Scottish Government can set its own income tax, so therefore for it can raise the money for this and other public transport schemes.

It won't do this, as the SNP are already planning for the next election and are not going to raise taxes for the average man in the street to cover projects like this.

They will just spend a few hundred thousand here and there on surveys and reports to make it look like they are doing something.

 

[Highland37]

No we don't. Income tax makes up a smaller part of taxation than the total. Also, if there is an increase in take, the block grant is reduced.

VAT, corporation tax, spirits (the largest export of the UK) etc are not controlled in Scotland. Also, tax for the average man has actually fallen. If you earn more (above £45k from memory) you will pay slightly more. Hardly the end of the end of the world.

Have you noticed the investment in rolling stock, some of which is going well and some not? I suggest not if you last sentence is indicative.

 

[mcmad]

YES we do.
Scottish Government can set its own income tax, so therefore for it can raise the money for this and other public transport schemes.
It won't do this, as the SNP are already planning for the next election and are not going to raise taxes for the average man in the street to cover projects like this.
They will just spend a few hundred thousand here and there on surveys and reports to make it look like they are doing something.

You missed the recent budget where anyone not on minimum wages ends up paying more in tax then?

 

[Highland37]

No I didn't and that statement is not factually correct. Some people not on minimum wage will pay more (see above) but not those in the mid £20ks which is above minimum wage.

 

[tomatwark]

No I didn't and I will be, but don't think they would dare raise it an more.

 

[Highland37]

OK, they could raise it to 100% and it wouldn't make much difference on income as there is a reduction in grant from Westminster then. It's a pretty pointless tool they way it's been set up if more revenue is your objective. Useful for changing the balance of where income tax is levied in terms of salaries but not much else.

 

[JohnR]

No we don't. Income tax makes up a smaller part of taxation than the total. Also, if there is an increase in take, the block grant is reduced.

VAT, corporation tax, spirits (the largest export of the UK) etc are not controlled in Scotland. Also, tax for the average man has actually fallen. If you earn more (above £45k from memory) you will pay slightly more. Hardly the end of the end of the world.

Have you noticed the investment in rolling stock, some of which is going well and some not? I suggest not if you last sentence is indicative.

There is no such thing as Whisky Export Duty.

http://www.gov.scot/Topics/Statistics/Browse/Economy/GERS/queries/008

 

[Highland37]

There is no such thing as Whisky Export Duty.

http://www.gov.scot/Topics/Statistics/Browse/Economy/GERS/queries/008

I know but my point is that Scotland, as the largest exporting part of the UK, contributes very significantly to the UK "balanced of payments" (it hasn't balanced for decades but that is another discussion) but critically doesn't have any control or income from any of that activity. Corporation tax is another one as is VAT. Oil revenue? No none of that either. Etc. It's very clear that the income from some parts of taxation is devolved but in a very narrow way and most is still reserved. That's the point of devolution.

GERS is widely discredited and open to multiple interpretations. I have given up on it as it can make a case for anything you want depending on your view and doesn't include important parts of the economy.

 

[mcmad]

We get the point that you want Independence for Scotland but at the moment the majority of the public in Scotland didn't agree so can we please tone down the SNPgood rhetoric on this and other threads so we can get back to talking about the trains rather than politics?

 

[Highland37]

I am not making any political points. Merely factual about where taxation powers are etc.

I don't think I have made any points about independence and am not here for that (I too am tired of the ongoing discussion) but it is not fair to make continual assertions which are not based on fact then extrapolate arguments from that point.

Surely we can at least agree the facts of the matter?

 

[JamesT]

No we don't. Income tax makes up a smaller part of taxation than the total. Also, if there is an increase in take, the block grant is reduced.

Do you have a reference for this? From what I've read, the block grant was reduced at the point of the powers being devolved by the amount of tax raised at that point. Any future variations the Scottish Government make to that tax have no effect on the block grant.
https://fraserofallander.org/2017/12/11/an-introductory-guide-to-this-weeks-scottish-budget/ is one source I've used which states it works in this way.

 

[Highland37]

Not immediately to hand, no. I gave up on the battle of the links some time ago when I realised that usually a link can be found to support any argument.

Thanks for you link. It does in general agree with what I say and notes that increases in tax take are "adjusted" by a change in the block grant. A complex and costly system to say the least.

 

[clc]

Do you have a reference for this? From what I've read, the block grant was reduced at the point of the powers being devolved by the amount of tax raised at that point. Any future variations the Scottish Government make to that tax have no effect on the block grant.
https://fraserofallander.org/2017/12/11/an-introductory-guide-to-this-weeks-scottish-budget/ is one source I've used which states it works in this way.

That is my understanding too, and the guide you linked to bears this out.

 

[Highland37]

We are getting off topic here but if you look at Figure 1.1 you notice that the adjustment is made each year, not just once, and also based on foretasted tax revenues, not actual.

 

[clc]

We are getting off topic here but if you look at Figure 1.1 you notice that the adjustment is made each year, not just once, and also based on foretasted tax revenues, not actual.

You seem to think that if the Scottish Govt increases the rate of income tax, thereby increasing it’s tax revenue, the Treasury reduces the block grant by an amount equivalent to that increase in tax revenue. That’s not how it works. There is an annual adjustment to the block grant true, but this adjustment will be the same whether the Scottish Govt sets income tax at 10% or 90%.

 

[Highland37]

That's my point. Sorry if I have no explained it well. There was someone above saying that income and expenditure were controlled from Scotland which is not the case at all.

 

[JohnR]

That's my point. Sorry if I have no explained it well. There was someone above saying that income and expenditure were controlled from Scotland which is not the case at all.

Actually, it IS the case. Hence why the SCottish Government - and Derek McKay the finance minister say that their small changes to the tax system will mean more money for the Government to spend. And saying expenditure is not controlled from Scotland is quite plainly wrong - especially from a rail perspective which is what we are supposed to be talking about.

 

[dcsprior]

That's my point. Sorry if I have no explained it well. There was someone above saying that income and expenditure were controlled from Scotland which is not the case at all.

Actually, it IS the case. Hence why the SCottish Government - and Derek McKay the finance minister say that their small changes to the tax system will mean more money for the Government to spend. And saying expenditure is not controlled from Scotland is quite plainly wrong - especially from a rail perspective which is what we are supposed to be talking about.

Some income (i.e. tax take) and expenditure in Scotland are controlled by the Scottish Parliament/Government or by local government within Scotland, some by elsewhere.

A quick google hasn't given me data on what percentage of total Scottish tax take is set within Scotland vs from elsewhere; or what percentage ends up being spent on devolved vs reserved matters - a bit of a shame as seeing these figures (and how they've changed since 1999) would provide good context. But regardless, I think we can all agree that both those percentages are neither 0% nor 100%, are higher than they used to be and lower than @Highland37 would like (They're also lower than I'd like, but I'm in favour of steps in the right direction.)

 

[JamesT]

Not immediately to hand, no. I gave up on the battle of the links some time ago when I realised that usually a link can be found to support any argument.

Thanks for you link. It does in general agree with what I say and notes that increases in tax take are "adjusted" by a change in the block grant. A complex and costly system to say the least.

We are getting off topic here but if you look at Figure 1.1 you notice that the adjustment is made each year, not just once, and also based on foretasted tax revenues, not actual.

No, you've entirely misread that article if you believe that.
The block grant is yearly, because the UK government does its spending yearly. The block grant will change from year to year due to inflation or changes in spending policy at Westminster (the infamous Barnett formula). So 16/17 Block grant was about £26.5bn, 17/18 £26.7bn. The adjustment is then that Scotland effectively already has some of the money through the tax powers being devolved. But this is set at the actual level of the last year the tax wasn't devolved. So for income tax this is 2017, £11,313m. For 2018, that figure is modified by an inflation rate, but it has nothing to do with the level the Scottish Government sets income tax at.
Figure 1.1 is a description of what the Scottish Government have to play with in their budget. They get the block grant, minus the adjustment, plus the money they've actually raised in tax in Scotland. It's forecast, because that's what governments do in their budget. 2018's spending is paid for by 2018's revenue, we don't have a crystal ball so it's a forecast.
From the article:

Figure 1 shows how this can be determined. In short, if the sum of the revenues raised from the devolved taxes is greater than the sum of the BGAs, then the Scottish budget will be better off than it would have been without tax devolution.

 

[EIKN]

The UK is far from broke (for now). We can afford do electrification on a massive scale but choose not to.

Out of interest if so many lines are electrified yet money is being spent on ' new State of the art DMU ' Plus the class 68 is it ( that futuristic loco for the Cumbria coast and Fife lines for example ) hauling real trains again . I'm no DMU can or emu fan . Proper locos and proper rollimg stock for comfort.
But re Electrification.
There had to be a point along with electric cars and eventually electric busses and freight on the roads .
Plus ever more devices new houses etc.
Where are we getting the power from?.
This country has not spent a penny building a so flexible new power station anywhere for well I can't recall. Perhaps after the war ?.
The time taken to design pass through planning , enquiries . Design build commission just one nuclear powers station it would not be ready before 2060 at this rate . By which time blackouts will be so common .
The rail companies will be ( you get in cheek here ) borrowing steam locos ..