Just As Planned

I'm fond of John Dryden's line, that "even victors are by victories undone." It contains a germ of hope for those who find themselves defeated, and it cautions those who appear to have carried away the prizes that a scorpion may lurk somewhere, undetected, in the silverware. Life, and politics, rarely work out just as planned.  

Our recent experience throws up too many examples of the best laid plans going agley fully to relate, but you can detect a few major threads in recent political surprises and disappointments. Measures adopted in the hope of weakening your opponents end up perversely strengthening them in unanticipated ways. You sometimes find short term measures which boost your fortunes lay down the railway tracks which ultimately engulf you in calamity. A swing which brings your opponent onto the punch might give you a welcome opportunity to draw some blood - but it isn't worth it, if the satisfaction of inflicting a little injury leaves you vulnerable to a knock-out blow in response. The art of politics can be deuced tricky. There are some black and white days in politics, some palpable setbacks and some undeniable triumphs. But as Dryden saw, all too often, our victories and defeats are two-edged. Most swords are. 

I approach the Scotland Act 2016, and the Holyrood election debate which it has prompted, with this kind of attitude. There is an intelligent debate to be had about the limits of the current devolution settlement, and the economic wisdom of a new model Scottish Parliament, whose tax analysis and decision-making is focused disproportionately on income. Economics is not my forte, and I'm not your man for that discussion. But let's look at the politics of this. 

Although Holyrood has, for some time, enjoyed a little theoretical wiggle room on taxation, since the SNP's abortive "penny for Scotland" policy in the early days of the parliament, Holyrood's tax raising powers have been posted missing in our election campaigns. Decisions on spending have predominated. Already, as the new Scotland Act powers march slowly towards us, serious questions of income taxation and welfare are colouring and directing the 2016 race. Bracket the economic question of the wisdom or unwisdom of devolving income tax in this way, what are the political consequences of this shift?

One analysis would see this as a cunning Unionist trap, designed to expose the SNP government to the kind of scrutiny it has allegedly long avoided. The argument goes something like this. Look at those cunning Nationalists, claiming credit for their spending decisions, but avoiding responsibility for hiking income taxes to pay for them. They claim credit when devolved Scottish services prosper, and blame Westminster when cuts are imposed.

Now, the new powers ensure Scottish ministers will take their share of potentially unpopular decision-making, which creates obvious winners and losers. Their hands are - finally - being dipped in the blood. Although income tax makes up a smaller percentage of the overall tax take than most folk probably assume, save for your council tax bill, your PAYE deductions are the most visible form of taxation going. 

If Nicola Sturgeon hikes your rate, you'll know about it, and hold her government responsible for its choices. See how long your popularity survives in the rougher winds which will blow then. Devolution might also have opened a window on the right wing for Ruth Davidson to champion lower rates. In the event, she seems to have retreated entirely to an "I agree with George" position on the rights of disabled people and the rates and bands of Scottish income taxation.

And - who knows? - this cynical argument may have something to it. Income tax devolution has already altered the political debate, and exposed the First Minister's government to some awkward choices. On one interpretation, the teeth of the trap are closing.

But for myself? I remember my Dryden, think like a calculating gradualist, and take a slightly different view. Might income tax devolution create headaches for devolved governments? No question. Might it expose the SNP to new and uncomfortable situations, inviting missteps, and making some parts of the population unhappy? For sure. But the creation of Revenue Scotland and a distinct agency to administer devolved benefits for the disabled are classically gradualist nationalist innovations. They help to bridge the chasm between the status quo and a future independence. They shorten the "leap in the dark" it might be seen as representing.

Many of the more critical, post indyref postmortems have focussed on questions of policy. How does the slump in global oil price alter the economic strategy and thinking? Does the currency policy need reappraising, in the light of hard experience and defeat? What about Europe? This is all well and good, and important, but I was to make a dumber, perhaps more obvious, point. For independence supporters, contemplating the situation in which we find ourselves, wanting usefully to bide our time, bridging that chasm isn't just a question of institutions and policy -- it is also a question of political culture and political capital. 

Yes, income and most welfare devolution will expose Nicola Sturgeon's government to sometimes harsh and unforgiving headwinds. But much more importantly, it will gradually acclimatise our political culture to talking about tax and spend decisions much more seriously, on a peculiarly Scottish economic scale. Comparisons with England and Wales are likely to continue. But given sufficient time to percolate and mature -- this has the potentially radically to revise the status quo, building greater fiscal capacity in our politicians, and among the wider public of electors. This may also build skepticism towards the Scottish Government from some quarters, but collectively, it has the capacity to build confidence too. And as a calculating, gradualist Nationalist, this seems to me a fine and useful thing.

One aspect of the devolution settlement which long concerned me was the limits it imposed on our politicians' policy visions and their industry. MSPs and ministers have an incentive to focus on questions within their competence, and to give only scanty and superficial thought to issues falling outside them.  The SNP were, for the greater part of the last two decades, uniquely exposed to this tendency, as first-past-the-post Westminster elections ensured that only a very limited cohort of Nationalist politicians were in place in the palace, scrutinising and thinking about reserved matters day to day. 

2015 represented a radical break with this modest representation. You can't expect six souls with limited support and funds at their command to engage in a comprehensive and thoroughgoing operation on critical reserved questions of taxation and welfare, foreign policy and defence. This observation is intended as no criticism of the folk composing the SNP's Westminster delegation in earlier years. There are only so many hours in a day, and only so many briefings a small cadre of advisers can assemble. 

Being the minor opposition, grounds can always be found to oppose the government of the day. But this kind of deconstructive, oppositional mode of thinking about reserved matters is not conducive to state building and advancing a considered and positive programme of your own. If the extent of your public scrutiny of government policy is a single question at PMQs, you're not going to try to present your own comprehensive plan. You'll look for the more focused, stinging, laugh line. Meanwhile, in Holyrood, as an MSP, you have no real incentive either to pick up the slack, and ponder the detail of social security or tax policy. It is a reserved matter, and your party will never be in power in Whitehall. Why bother? 

But this kind of dynamic should strike serious minded independence supporters as potentially pernicious. If the principal party of independence neglects to build its thinking beyond opposition to particular measures, and the formulation of superficial but superficially winning soundbites about Westminster perfidy, you're goosed. From this kind of material, winning campaigns for Scottish independence are not made.  

But I'd argue these two recent developments offer a route out of these understandable historical cul de sacs and leave the SNP simultaneously more politically exposed, and ultimately strengthened. In contrast with the handful of representatives whose minds are set to the analysis of reserved matters, the SNP now benefits from a massive Westminster delegation whose resources it must deploy with cold-eyed intelligence. Some of the new parliamentarians are plodders. Others stars. But aided by its short money war-chest, the party's serried ranks of MPs, and the little elves and sprites which surround them, are gradually intensifying their understanding of reserved matters, and the depth and complexity of many of the issues involved. This is unprecedented.

But I wonder if the Scotland Act "trap" might not make its own significant contribution to sharpening Nationalist thinking, focussing minds, and forcing Scottish voters to think about tax and spend - and greater independence - in a more comprehensive and programmatic way.  As you cackle as Nicola Sturgeon and her colleagues are put on the spot - think on that. And remember Dryden. And wonder if it is all, really, going just as planned.

Notes from "Middle Scotland"

Who are Scotland's "squeezed middle", and what, precisely, are they supposed to be in the "middle" of? The right wing press have begun to do their collective dingers about Nicola Sturgeon's hints yesterday, that George Osborne's decision to hike the threshold for paying the higher rate of tax looks unlikely to apply in Scotland once the Scotland Bill powers are enacted. 

In the current tax year, individuals across the UK pay 40% tax on earnings over £42,385. Come 2017/18, the chancellor intends to shift the threshold for the higher rate to £45,000. The First Minister has said cutting income taxes for "those on the highest incomes at a time when support for the disabled is being cut and at a time when our public services are under pressure, is in my view the wrong choice.”

For Alan Roden, and the Scottish Daily Mail, this is an outrage and a scandal. "Middle Scotland will pay highest tax in UK" their headline this morning screams, a "family tax grab". Mr Roden goes on to flesh out his indictment of this supposed Scottish Government larceny. 

"Nicola Sturgeon yesterday confirmed that Scotland's squeezed middle will be punished with the UK's highest taxes to pay for the SNP's vote-winning policies. The First Minister said George Osborne's tax give away for nurses, teachers and police is "not a choice I am going to make."

With the paper's characteristic combination of sentimentality and nastiness, this opening paragraph summons up a ghoulish mental picture of the SNP government, persecuting the ordinary bobby, picking the pocket of self-sacrificing and industrious ward sisters, and shellacking that lovely, soft-voiced primary school teacher you cherished as a youngster. It implies that fairly ordinary workers, earning fairly ordinary pay cheques, will be "punished" if John Swinney decides not to make the richest sections of this country even richer. Even a little rummaging shows that this a breathtaking distortion, a falsehood, a flat out, old-fashioned lie. 

First, start with the basics. The latest official figures suggest that the median annual earnings of a Scottish worker before tax is £27,045 - a mighty £15,370 short of any liability to pay the higher rate of income tax. Most Scottish workers need a pair of binoculars to see the upper rate of tax, never mind to benefit from Mr Osborne's unnecessary cuts. And what do you know? Precisely the same thing goes for each of the professions Mr Roden mentions in his forked-tongued news report. Nurses, teachers, police officers - the overwhelming majority of these public sector workers won't gain a single penny from Osborne's upper rate hike and won't lose a single penny if John Swinney refuses to play copy cat. 

First, take nurses. The NHS in Scotland helpfully publishes workforce information, including data on the salary bands of its staff. Even more helpfully, they break down the data for nursing staff and midwives. So what does it tell us? At the end of December 2015, the NHS employed 59,287 nursing and midwifery staff. These staff are paid on nationally negotiated pay scales, running from £15,385 at the bottom of band 1 to £100,431 per annum at the top of band 9, depending on their seniority. 

But the overwhelming majority of nursing and midwifery staff are employed on contracts of band 7 of lower.  And - yes, you've guessed it - the highest point in band 7 for nursing staff in Scotland is a salary of £41,373 - still just  over £1,000 short of paying the higher rate of income tax at its current level. In fact,  according to official stats, at most, only 2% of Scottish nursing staff are in a position to benefit from Mr Osborne's upper rate tax cut. 58,111 staff are employed at band 7 or lower compared to just 1,176 above that, while the overwhelming majority of nurses and midwives (36,570) are employed on salary bands 5 (£21k - £28k) and 6 (£25k - £35k). Point to me, I think, Mr Roden.

So what about the teachers Nicola Sturgeon is supposedly "punishing"? Oopsie daisy. Same problem. Scottish teachers have their own nationally negotiated bands of pay, running from £22,416 for probationers, up to £35,763 at band six. Different rates apply for principal teachers, and for the higher ups in the head-teachers' offices, some of whom would benefit from the chancellor's upper-rate tax cut. But the overwhelming majority of Scotland's 48,000 teachers? Not a sausage. Even without a hike, they're still earning £6,622 a year shy of the current threshold to pay 40% income tax. 

And police officers? Surely Mr Roden must have called at least one of these right? Surely the bollocks cannot be entirely unmitigated? Alas, alas. First, look at Police Scotland's pay and grading rules.  Police constables take home £23,493 on their first year on the job, increasing to £36,885 over long service. There are no higher rate tax payers here. But what if you are promoted to sergeant? Then your pay jumps from £36,885 to £41,451 per year. Even on the current threshold of £42,385, police sergeants still wouldn't be paying a single penny of the higher rate of tax. By contrast, the Chief Constable (salary, £212,280), and his higher ranking subordinates would have to contribute more if Osborne's cuts are not implemented north of the border. 

But just like nursing staff, and just like teachers, the overwhelming majority of police officers are not employed in senior positions, earning fatter pay cheques. The most recent statistics suggest that over 90% of Scottish police officers serve and are paid at constable or sergeant level who will not pay a penny more income tax, even if Osborne's tax plans are not implemented by the Scottish government. English police forces show a similar breakdown, by the by, with 93% of officers holding commissions as sergeants and constables.

So let's summarise. Reality, according to Alan Roden, is that George Osborne's tax cuts for the top 10% - 15% of highest earners represented a "tax give away for nurses, teachers and police" and that "Scotland's squeezed middle will be punished" by the SNP if a matching cut is not made to Scottish rates of income tax. Reality, according to the evidence, suggests that 90% of police officers would not be worse off, 98% of nurses would not be worse off, and the overwhelming majority of Scottish teachers would not be worse off, if the higher rate of tax was simply maintained at its current rate. Misinformation doesn't cover it.

So where do we find this fabled "middle Scotland"? If the Daily Mail's analysis today is anything to go with, wedged deep, deep in the midst of naked self-interest, rampant delusions, lies about our economy and and a fog of utterly misplaced self-pity.

Nicola's new appeal to self-interest

I've got out of the habit of watching First Minister's Questions, but I tuned in with interest this afternoon to see how the parties responded to yesterday's budget and the challenges it throws up for Scottish policy. Heckled by Kezia Dugdale, there were encouraging signs from the First Minister that the SNP are up for prosecuting the social democratic case that better services are worth fighting - and paying for - even if that involves maintaining higher levels of income taxation for the 10% to 15% of the population who are higher rate tax payers. 

The right wing press have responded this morning in their usual risible style, bleating about the cruel fate to be endured by "middle class families" in Scotland under this separatist government. If the First Minister's answers today are anything to go by, the richest look unlikely to be receiving Osborne's unnecessary tax bungs from Nicola Sturgeon's treasury next year, as the basic support which is extended to disabled people is ruthlessly hewn away. 

But perhaps the most interesting thing in Sturgeon's #fmqs performance today? For the first time that I can remember - she explicitly linked the idea of levying higher Scottish taxes with the provision of better public services not available in England.  Since 1998, we've existed in a curious kind of policy limbo in this respect. Scottish governments of all stripes have taken spending decisions which distinguish them from the priorities in Whitehall, whether it is the reduction and elimination tuition fees for Scottish domiciled students, or Henry McLeish's funding for personal care for the elderly, or the SNP's decision to roll out universal free prescriptions. 

While Westminster held the purse strings, these distinct spending decisions have not been linked to any argument about whether taxes ought to be higher or lower. One consequence of this output oriented analysis of public spending has been disgruntled Tory politicians south of the border, arguing that Scotland is feather bedded and claims an unfair share of public spending, allowing its politicians to distribute "free stuff" to its people which the harder pressed English representatives simply cannot afford. But we rarely ever talk about the investments Scottish Governments did not and could not make, as a result of prioritising personal care, tuition fees, and access to medicines. Or for that matter, how that surplus was spent in England and Wales. But if Sturgeon's asides this afternoon are anything to go by, all of that is about to change. 

Significantly, the First Minister appealed not only to altruism, or concern for the worst off and the vulnerable today, but also to a kind of enlightened self-interest. Short version? "Tax isn't just a sacrifice, reluctantly made for the good of others. Here's what your higher taxes get you. These things are worth paying for." Her remarks put me immediately in mind of this piece from the Atlantic magazine yesterday on Bernie Sanders' campaign for the Democratic nomination. Written by a Nordic-American journalist, Anu Partanen, the piece neatly echoes the argument Nicola Sturgeon just began making this afternoon and which I suspect we'll hear much, much more of in the coming months and years in Scottish politics. Here's the key passage:

"A Nordic person myself, I left my native Finland seven years ago and moved to the U.S. Although I’m now a U.S. citizen, I hear these kinds of comments from Americans all the time—at cocktail parties and at panel discussions, in town hall meetings and on the opinion pages. Nordic countries are the way they are, I’m told, because they are small, homogeneous “nanny states” where everyone looks alike, thinks alike, and belongs to a big extended family. 

This, in turn, makes Nordic citizens willing to sacrifice their own interests to help their neighbors. Americans don’t feel a similar kinship with other Americans, I’m told, and thus will never sacrifice their own interests for the common good. What this is mostly taken to mean is that Americans will never, ever agree to pay higher taxes to provide universal social services, as the Nordics do. Thus Bernie Sanders, and anyone else in the U.S. who brings up Nordic countries as an example for America, is living in la-la land. 

But this vision of homogenous, altruistic Nordic lands is mostly a fantasy. The choices Nordic countries have made have little to do with altruism or kinship. Rather, Nordic people have made their decisions out of self-interest. Nordic nations offer their citizens—all of their citizens, but especially the middle class—high-quality services that save people a lot of money, time, and trouble. This is what Americans fail to understand: My taxes in Finland were used to pay for top-notch services for me."

In terms of the tax and spend debate which is coming to Holyrood - perhaps a straw in the wind. 

For the SNP, taxing problems lie ahead...

In university, I had the misfortune to study the law of tax. In fairness to my teachers, they were learned, talented and clear. I didn't do badly. But the arcane, shifting, three dimensional geometry of tax law hurt my head. I had no real talent for it. At the time, jobless, incomeless, it all seemed a little arcane, gesturing towards a fantasy world of money which - as an undergraduate - seemed fantastical and remote. 

But now that I find myself holding down a job - and, ye gad - putting in tax returns - these old lessons which I neglected seem more interesting and urgent. In the House of Commons today, George Osborne presented his budget to MPs. From the headlines, it has all the hallmarks of another Tory budget chock full of unnecessary cuts to tax for folk who're already doing perfectly well, while screwing over folk with nothing. In Holyrood, in parallel, MSPs were debating the Scotland Bill, which will invest Scottish ministers with the responsibility, all too soon, with taking key decisions on taxation. Under the 2012 Calman powers, Holyrood is only entitled to set a single "Scottish rate" of income tax, which will apply across all the UK bands. 

MSPs have no control over tax allowances, or over personal allowances. This, as we've discussed before, is a famously blunt instrument. If you want to hike the tax obligations of the wealthiest in Scotland, John Swinney must also increase the bills of anyone earning more than the personal allowance. Understandably, the SNP have decided not to increase the bills of folk earning significantly less than the median, full-time salary of £27,000 per annum. Scottish Labour continues to promise a £100 workaround for the low paid via local government, but no further detail has been produced about how they would achieve this.

But in the near future, John Swinney or his successor will have the power to create a more nuanced Scottish system of income taxation. But critically, their decisions will continued to be framed in vital ways by decisions, taken by the UK treasury, over which they have no power. Scottish Finance Secretaries, with the support of the parliament, will in future be able to introduce new bands of taxation and thresholds, departing from the current UK dispensation, with its basic rate, higher rate, and additional rates of tax on income over £150,000. The economics of this are beyond my ken. But in terms of the powers themselves, Mr Swinney will have much more flexibility. 

Under the current rules, set by the UK treasury, the 40% rate kicks in £42,385. In the near future, Mr Swinney might pick a different threshold, or a different percentage. He might, for example,  introduce a basic Scottish rate of taxation, a higher Scottish rate, and an additional rate, and new, fourth, Eat the Rich rate. But the starting point for all of Mr Swinney's calculations will remain the personal allowance, which remains the UK chancellor's plaything.  Under the new Scotland Bill, George Osborne retains control over the personal allowance.

And the proverbial "direction of travel" on the personal allowance is clear - onwards and upwards, with more and more folk, and more and more income, being taken out of the income tax system altogether.  When I started studying tax law, the personal allowance was a slender £4,895 per year. Having cannibalised Liberal Democrat tax policy, the Chancellor today projected a personal allowance of £11,500 for 2017/18.

Why does this matter? Because continuing UK government control over when income taxation begins to bite means that even if John Swinney wanted to maintain the same level of tax liability in Scotland, he'd have to shift the thresholds or increase the rate of tax owed. The Smith Commission compromise - effectively - means that in order to maintain the status quo of tax in the teeth of a tax cutting UK government, Scottish ministers would be obliged - visibly obliged - to put taxes up in Scottish budgets. No harm in that, you might well think. You can't triangulate your way to social democracy. But I'm not sure this is a point everyone following Scottish politics has fully understood.

Confused? Let's try a very simple example. Imagine you are a Scottish taxpayer. Imagine also that the new Scotland Bill is now in force, and your Scottish Cabinet Secretary for Finance can decide what rates you pay, and then they bite. Say also that you earn £27,000 a year. In tax year A, you enjoy a personal allowance of £10,600, set by the Treasury. Your Scottish rate of income tax, set in Edinburgh, is 20% owed over this threshold. Your taxable income is £16,400, and you'll be handing over £3,280 to Revenue Scotland.  

But imagine that in the next year - tax year B - George Osborne decides to boost your personal allowance to £12,000. Even if John Swinney preserves the Scottish rate of income tax at the same 20% rate, your tax liability will fall significantly. Now, your taxable income will be £15,000, with reduced revenue for the Scottish exchequer of £3,000 (-£280). Small beer, you might think, but add all of these basic rate taxpayers up -- and Mr Swinney might end up with a substantial hole in his budget, as a result of the Chancellor's tax-cutting agenda.  

The key point? If you have a UK governing using the personal allowance to cut tax, then deciding to keep the Scottish and UK taxation rates at the same level is effectively a decision to cut taxes. You might pray nobody notices, and quietly give effect to it. But to paraphrase Orwell, it would be objectively pro austerity. There are good reasons not to invoke the Calman tax powers this year. But those reasons begin to evaporate very soon. This doesn't mean the Scotland Bill powers are a trap, but it does mean that Nicola Sturgeon will almost certainly find herself obliged to defend higher Scottish rates of taxation just to maintain the current tax take.

This remains one of the essential political instabilities of the United Kingdom. At least from a rhetorical point of view -- the UK and Scottish Governments have significantly different ideas about how large the state should be, and how much public money should be spent on collective projects and redistribution and responsibilities. The new Scotland Bill doesn't resolve these incoherences. Barnett leaves the two governments' spending decisions yoked together, for good or ill.

But given the ongoing direction of UK government policy expressed in today's budget, the SNP government must brace itself. With the passage of the Scotland Bill, a whole series of awkward questions arise for any Scottish Government, determined to preserve current levels of taxation, and public spending. 

And there's no triangulating your way out of that one. Very soon, the SNP will have to decide whether they are a proper social democratic party, or a nest of fearties.

Questions, questions

It is a finnicky detail, but an important one. Today, Kezia Dugdale has announced that Scottish Labour wants to increase income tax by 1 pence in the pound across all tax bands. Under the scheme, anyone earning over £10,600 or so will find themselves making a greater contribution to the Scottish exchequer. Wealthier folk considerably more. 

From a legal point of view, this is entirely in order. Under the Scotland Act 2012, Holyrood sets a single Scottish rate of income tax to be paid by Scottish income taxpayers. So how does it work? Under the 2012 Act, you take the UK tax bands determined by Westminster and knock 10% off them. Holyrood has the discretion to add a single supplementary Scottish rate over and above this, which applies to all bandings. To add 11% to the upper rate of income tax, MSPs have got to add 11% to the basic rate too. 

Notice a few important things which the 2012 Act doesn't let MSPs do. They've no control over (a) the extent of the tax free personal allowance (b) the number of tax bands in operation (c) when these bands kick in and (d) obviously cannot - at present - increase only the upper rates of taxation. But importantly, the Scottish Parliament also cannot introduce additional forms of tax relief into the code, or add permissible deductions or provision for rebates to the HMRC rules, even for Scottish taxpayers. Nothing in the Scotland Bill, before Westminster, will change any of this. For the moment, all MSPs can do is move the overall income tax slider up or down.  

This is why I'm more interested in Scottish Labour's attempt to sweeten the bitter pill of making even those on very modest incomes pay more tax, by promising the following:

“We would establish, with local authorities, a £100 annual payment to the boost the income of low paid taxpayers. This will account for just £50 million of the half a billion pounds this change will raise but will mean that we can boost the incomes of low paid taxpayers.”

Labour are defining a "low paid taxpayer" as "taxpayers" earning less than £20,000 a year. They suggest "one in five tax payers will end up better off financially" for the modest expenditure of £50,000,000 a year. The Guardian and Daily Mail characterise these payments as "rebates" for the low paid. The Daily Record calls it "cashback." Kevin Hague calls it a "refund", though Kevin rightly stresses that "the precise mechanics of how this would work are unclear". The BBC and Holyrood magazine characterise the proposal as a "payment," but offer nothing more by way of detail than Labour's press release summary.  

So what might the legal mechanics of this critical element of Kezia Dugdale's platform be? Let's be clear about a few things from the get-go. Firstly, and as-per-ruddy-usual, the Scotland Act doesn't provide a straightforward legal mechanism to realise Scottish Labour's ambitions. Holyrood has no authority to order HMRC to fork over a £100 repayment to those earning less than £20,000 gross salary per annum. This is so, even if the Scottish Government is good for the money it would cost and willing to pay the funds. This will remain so, even after the Scotland Bill comes into effect.

Holyrood has no legislative competence to introduce such a scheme, as "taxes and excise duties" remain - broadly - reserved. So this is no "rebate", no "tax refund". And critically, it couldn't be administered through the tax system, with all of its convenient access to the financial information of hundreds of thousands of Scots. 

Although is - doubtless - convenient political shorthand for Dugdale to link the two, what the Labour leader is proposing here is an entitlement scheme quite distinct from Holyrood's decision-making on the Scottish rate of income tax. Such a payment seems to fall within the - generally reserved - domain of social security. This is defined as "schemes supported from central or local funds which provide assistance for social security purposes to or in respect of individuals by way of benefits,"

“Benefits” here is defined as including "pensions, allowances, grants, loans and any other form of financial assistance." And providing assistance for social security includes "providing assistance to or in respect of individuals ... who qualify by reason of low income." Although Scottish Labour want to dress this up as a rebate or a refund -- it bears all the hallmarks of a social security benefit. If the Scotland Bill passes and comes into force, section 26 should lend Kezia a hand, but until that day, it isn't clear how Dugdale can bring her £100 payments about. The timelines for realising these powers may, or may not, neatly splice with the tax hike she is proposing. 

And because this isn't a tax repayment, there are obvious wider practical implications worth considering. Labour indicate that local authorities will shoulder the burdens of adminstering this policy (so no universal credit supplement, this). So how is it envisaged local authorities will collect the relevant financial data on potential beneficiaries? A "rebate" might suggest a convenient calculation, completed automatically by the taxman's computer, which coughs the cash directly into your bank account. But local authorities don't have this data. Will the low paid be expected to take the initiative to make some kind of local government tax return to establish their eligibility? 

And thinking of that, have administrative costs been factored into Scottish Labour's £50 million estimated costing for this policy, or is this simply an estimate of the total cash which those earning under £20,000 will be entitled to? If these figures don't include administrative costs, why not? And if they do include administrative costs, what data are these calculations based on? What assumptions have been made about the number of individuals eligibile? What's the breakdown? 

One reason why you might struggle to tell me that is that you're still a little fuzzy on who will, and who won't be, entitled to this £100 benefit. In which case, that £50 million estimate looks even shooglier. HMRC estimates that around 2.56 million Scots pay some income tax, the overwhelming majority at the basic rate. Are those earning less than the personal allowance (£10,600 in 2015/16) being classified as "taxpayers" in this scheme, entitled to an annual £100 supplement, along with those who earn £15,000? Pensioners, students, weans? Or will only those who cross the threshold of the personal allowance see the supplementary £100? But even if we're only talking about these taxpayers, making 512,000 people wealthier while taxing them more might seem a difficult circle cheaply to square.

Not insuperable hurdles, then. But questions, questions.

Notes from the Rouge Morgue...

When did Scottish Labour become so inept at politics? 

This afternoon, Gary Gibbon of Channel 4 published this blog, reporting findings from his attempt to "take the temperature" of the party's Westminster delegation on the reported volte-face on devolving all of income tax to Holyrood. Gibbon found that the Labour tribunes were not happy little bunnies, not at all. 

"The temperature is at morgue chiller levels", he reports, alongside a series of damaging quotations from disgruntled parliamentarians, suggesting that tomorrow's Smith Commission proposals will be a calamity for the Union, a "complete disaster." Income tax devolution is not represented as the intrepid, visionary and generous act of a party comfortable in its own skin, emboldened by the referendum victory, and committed to "home rule" - but a grudgingly granted and much-resented concession. 

This is madness. If, as expected, the Smith Commission endorses these plans tomorrow, these leaky tribunes will have achieved nothing save to undermine (a) confidence that Labour will deliver on the Smith compact, if elected in 2015 and (b) strangle in the cradle the already frail delusion that Labour, in its current mood, is "the party of devolution", despite its historical boasts and pieties.  

Yesterday, I argued that the Smith Commission represents an opportunity for Labour and the Tories to redraft their constitutional storytelling, to restate the Union in bold, contemporary form and to re-articulate their own places within it in a more satisfactory way. The Smith Commission plans certainly contain the resources for a compelling shift in the constitutional debate.  A powerhouse parliament. Completing devolution's work. Expressing our faith in the capacity of the Scottish people to govern themselves. And for Labour - a critical opportunity to get back on the front foot and to knock the perfidious Nats helter-skelter.

And god knows, you'd think the People's Party would be glad of the life-raft. Bilious low expectations gnaw at Labour's credibility on devolution and its institutions. You'd think they'd have learned the lessons from reluctant devo-something offer, which saw them dawdling behind the Tories, mistrustful of Scottish self-government and apparently determined - above all - to protect the party interest. But today, on the cusp of their big opportunity to make the weather, they appear determined to appear stinting and huffy. Again. Madness. 

Bitching, publicly, about something almost certain to happen -- and instead of pitching it as a glorious triumph of a renewed, confident party, comfortable with devolution and at home with governing in the UK -- it is all soor faces and grief. Reluctant, crabbit, clenching, grudging. 

And there's more bad news. If the Labour MPs are girning on about income tax, it seems unlikely that Smith will recommend the devolution of substantial social security responsibilities -- that would drive them hopping mad and cultivate an altogether different temperature. My own view, for what is is worth, is that the failure to stump up significant powers over welfare will sign the Union's death warrant. Certainly not today, and probably not tomorrow -- but in the long run, the failure of nerve and failure of confidence will keep the underlying questions of social justice burning bright and hot. 

Labour look determined to lose the post-indyref peace. Their Unionist fellow travellers, anxious about the Union's continuing frailty and anxious that that peace is won and won well -- must have their heads in their hands.