VAT bombshell for a separate Scotland

A separate Scotland will lose the right to apply zero rates of VAT to a range of goods, the European Commission has confirmed to the Scottish Conservatives.

In a move that could cost the economy billions of pounds in the event of independence, the EC said any new member would have to apply a minimum of 15 per cent VAT to all goods, with “one or two” areas receiving a special rate of five per cent. That means a huge list of items would instantly become more expensive, including newspapers, books, equipment for the disabled and children’s clothes.

In addition, huge sections of construction like shipbuilding and aircraft repair would also lose the right to zero per cent VAT. And not only would it cost business and consumers significant amounts of cash, it would also make an independent Scotland less competitive than its neighbours in the rest of the UK.

In a letter from Donato Raponi, head of unit at the EC taxation department, the stark situation was set out clearly. He said: “Under the current EU VAT rules, member states are obliged to apply a standard rate of at least 15 per cent and may also apply one or two reduced rates, set no lower than five per cent." and "Once the accession treaty is agreed along with any VAT derogations, it is no longer possible for a member state to introduce special VAT rates. The member state must apply the EU rules.”

The UK only enjoys zero per cent VAT on 54 areas because of a longstanding agreement, which Scotland would not be able to apply should it break away. It is the latest in a line of demands an independent Scotland would have to comply with in order to gain entry to the EU.

Little mention is made of the VAT issue in the Scottish Government’s separation White Paper, although Alex Salmond’s adviser Sir James Mirrlees has suggested VAT should be extended to almost all spending.

Scottish Conservative leader Ruth Davidson MSP said: “Yet another potential cost of independence has been exposed. We know that within the UK families don’t have to pay VAT on vital items such as books or children’s clothes. The European Commission has now confirmed that, as a new member, an independent Scotland would be forced to give up those hard won tax breaks which help ordinary families every year. That means a minimum five per cent increase on thousands of goods. No ifs, no  buts – those are the rules for any new member.

“It’s not just Scottish families that would be affected, but Scottish business too. Thousands of people in Scotland are employed across the construction sector in areas like shipbuilding and aircraft repair – areas which benefit enormously from VAT exemption and would be hit hard by such tax breaks being taken away under independence.

“None of this has been spelled out by the SNP. We now need Alex Salmond to tell us fairly and squarely – what will VAT rates be on all these household items after independence? How much more will already hard-pressed families have to pay for children’s clothes and books?”

Scottish Conservative MEP Struan Stevenson said: “This is a massive tax bombshell which will have a huge impact on business and industry in a separate Scotland. HMRC list 54 different items that currently enjoy zero-rates of VAT in the UK, ranging from children’s clothes to books and newspapers, and even large swathes of the construction sector like shipbuilding and aircraft repair. Placing a mandatory five per cent or higher VAT rate on these goods will cost Scotland a fortune. It will make us less competitive than our main trading partners in the rest of the UK, who will continue to enjoy their zero-rated VAT derogations.”

King Street gully

I was contacted by a resident about flooding that occurs at a gully on King Street near to the Ambrose Street junction. Apparently it has previously been reported to the council but without any outcome.

Having raised the matter with the council’s city engineer requesting that it be investigated I was advised that an order has been issued for a repair to be made to the gully with a provisional start date programmed for 6 March.

A meeting with Dr. Ian Duncan

Last night I attended a meeting in Broughty Ferry that was addressed by Dr. Ian Duncan who is the lead candidate for the Scottish Conservatives at this May’s European Parliament election. Ian has been a representative of the Scottish Fishermen’s Federation and has also served as the head of the Scottish Parliament’s office in Brussels so he knows how the EU operates and how to get the best out of it for Scotland. 

 
I was pleased to hear him speak about the need to cut back on regulations and make them fit for purpose. He also spoke about the reality of where Scotland stands within the EU in respect of the Scottish Referendum.

Ian was a hugely interesting and engaging speaker and I came out of the meeting with a greater understanding of the workings of the European Parliament.

The picture is of  Ian (on the left) speaking to some of those who attended the meeting.

Post box at Camphill Road and Bughties Road

Residents have contacted me about the post box at the corner of Camphill Road and Bughties Road. It has been out of use since September last year and more recently the wall it is built into received structural damage due to vehicle impact. It has been fenced off since to maintain public safety. The wall is due to be repaired in the next couple of weeks but apparently Royal Mail has no intention of reinstating the post box. I have therefore written to Royal Mail to establish what its intentions are to ensure there is adequate post box provision for the area.

Broughty Ferry Library extension

Thursday's Policy and Resources Committee also considered the council’s 2014-18 capital plan. I was pleased to see £250,000 included for Broughty Ferry Library. In advance of the preparation of the capital plan I had contacted the council’s chief executive to ask if there was any possibility of allocating some funding to assist the Friends of Broughty Ferry Library group with their proposal for an extension which would provide a community meeting space.

Although my representations were successful, the money has been included in the 2017/18 phase of the plan. At committee I asked if the proposal for Broughty Ferry Library could be brought forward should there be any movement in the plan as a result of other projects not going ahead. In response I was advised that it could be looked at again next year providing that it fits in with the timing of applications by the friends group for additional funding from external organisations.

Budget meeting

The council set its 2014/15 budget at a meeting of the Policy and Resources Committee on Thursday afternoon. The outcome of the meeting was another freeze in the level of council tax householders have to pay. The SNP administration proposed a number of savings which resulted in a lengthy debate. The most controversial of these was the transfer of early years practitioners from primary schools to nursery schools. I supported an unsuccessful amendment by the Labour Group opposing this change as I agreed with the individuals who addressed the committee as part of a deputation that this was a short sighted move and would have a detrimental impact on some of the vulnerable children the early years practitioners work with. 

My amendment was a response to the representations I had received about the impact the administration’s 3% cut in funding to third sector organisations would have on their ability to provide frontline services. I identified a number of savings that could be made to the budget that would allow a ring fenced contingency fund of £150,000 to be created for supporting any of the organisations that were unable to re-profile their service delivery or find efficiencies, without jeopardising the viability of the organisation.

The savings I put forward included things like food and refreshment for the councillors’ lounge, the budget for alcohol purchases and general office expenses in support functions, none of which would have had an impact on any of the services delivered by the council. Unfortunately my amendment was defeated by 16 votes to 12.

Scotland would not be able to share the pound

The Chancellor of the Exchequer George Osborne today made a speech in Edinburgh, stating a separate Scotland would not be able to share the pound in a currency union with the rest of the UK.

 Reacting to the speech, Scottish Conservative leader Ruth Davidson MSP said:

 “Alex Salmond's fantasy economics has been hit by reality. And the blunt truth is that a vote for separation this September is a vote to leave the security of the UK pound.

 “This is no bluff. The Permanent Secretary of the UK Treasury has made it clear he has advised the Chancellor against entering into a currency union with an independent Scotland.

 “There is now nowhere left to hide. The SNP has been found out. It should now stop concealing the truth from the people of Scotland and come clean on what the consequences of separation really are. Scotland's already part of a currency union. It's called the United Kingdom.”

Graffiti vandalism Balmossie

I’m always annoyed when I see graffiti vandalism. There is no need for it and all it does is detract from the general appearance of an area. There is also the waste of time and resources in cleaning it off.

The Balmossie end of the Esplanade seems to have attracted quite a bit of it recently with the sewage pumping station being the main target of the vandals.

I have contacted Scottish Water requesting that action be taken to paint over the eyesore.

Stay safe online event

I have attached a poster for a stay safe online event to be held this Thursday, 13th February, at The Steeple Church Centre from 11am-3pm. The event is for adults as well as children and it will provide advice and information on how to stay safe online.

Council committee meetings

Tonight’s Environment Committee considered a report on the control of dogs in parks, cemeteries and open spaces. An action plan was approved  which proposes a number of measures including increasing the number of officers authorised to issue fixed penalty notices for dog fouling offences ,  bringing forward a proposal for implementing a registration scheme for professional dog walkers and developing a pilot dog walking trail within one of the parks.

The Environment Committee also considered a report on the pre-purchase of cemetery lairs. The pre-purchase of lairs within Dundee’s cemeteries was stopped in 2007 due to the pressure that existed at that time on available space.  The extension to Birkhill Cemetery and the formation of the new Pitkerro Grove Cemetery to the north of Broughty Ferry now provide sufficient capacity and it was agreed to make lairs available for pre-purchase from 1 April 2014.

At the Housing Committee I voted against a proposal to send two elected members to attend a conference at the SECC in Glasgow. The estimated cost, excluding travel and subsistence, was £699 per delegate. I have always been of the view that there is no need for councillors to attend conferences as I don’t think they provide value for money. In my opinion it is far better that any information from a conference be cascaded by the council officers who attend.

The Policy and Resources Committee confirmed the Community Regeneration Fund allocation for 2014/15, which includes an amount for the first time for the Ferry ward, which is something I have been pursuing for a number of years.

The committee also completed another step in the waterfront development by authorising the Head of Democratic and Legal Services to conclude a lease for the hotel component of the redeveloped Dundee railway station concourse.

Missing sign to be erected

I have contacted the council’s head of transportation about the signage notifying drivers of the new 30 mph speed limit in force on Dundee Road. There is a sign in place at Margaret Crescent for traffic heading east but nothing at Ellieslea Road for traffic going west. In response he has confirmed that that there should be such signage at both eastbound and westbound start points of the new 30mph section.  Tayside Contracts has been notified that the signage was not erected as expected and I am told that the matter will be rectified soon.

Proposal for budget savings

Yesterday I submitted my proposals for additional savings in the council’s 2014/15 revenue budget for consideration by the Policy and Resources Committee on 13 February. 

They are the same items I asked to be deleted from the budget last year but as they weren’t accepted by the SNP administration at that time I am having another go. 

Included are £9,000 for alcohol purchases, £7,200 for food and refreshments for councillors, £1,000 for councillors’ attendance at conferences and £28,800 for hospitality in various council departments.

The amount in the budget for alcohol purchases last year was £6,916, this year it has gone up to £9,000, an increase of about 30%. People might be surprised by this large increase particularly when so many other things are being cut.

The £28,800 hospitably saving I am proposing doesn’t include what is spent in the City Chambers. The only impact on civic events would be that alcohol wouldn’t be one of the beverages served.

I have also proposed a 1% reduction in energy costs which would save £33,000. In its proposal the SNP administration is expecting to see a 5% reduction in energy usage across the school estate in 2014/15 and 10% reduction in 2015/16. That being the case I think a 1% reduction in energy costs across all other council buildings is achievable.

I have met with a lot of council officers to discuss the budget and I have received representations from organisations and individuals about the impact some of the administrations proposals will have. Those who have contacted me, in the main, have been concerned about the 3% reduction in funding to external service providers and the removal of early years practitioners from primary schools. I’m sure that the SNP councillors will have received similar representations and I am happy for them to put the savings I have identified towards measures to lessen the impact of their proposals.

Keeping the draught out

Towards the end of last year I contacted the council's housing department on behalf of council tenants and owner occupiers of former council properties in the Strathmore Street area who have had new security doors fitted to their communal entrance. The new doors don’t fit the door frame as neatly as the old doors did leading to draughtier internal common areas.

In response I was told that in most of the new installations there is an appreciable gap at the floor level and this tends to be greater than was previously obvious at locations which had a more traditional timber unit in place. Of the 1200 properties across the city that have been fitted with security doors only between 20 to 30 have had an existing door completely replaced with a steel equivalent. The vast majority of installations take place on blocks with no existing door (about 75%) or else on existing doors that are easily adapted to accommodate the locking devices.

Apparently on occasion a bespoke draught brush has been provided if local conditions allow it without hindering the opening and closing of the door.

I recently received an update advising me that the Housing Investment Unit Project Team has now discussed the use of draught excluders and the outcome is that from now on these will be fitted as standard to all new rear steel doors where building design allows.