The shadow chancellor is using the same arguments as the SNP on corporation tax. Photo: Getty
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Ed Balls’ corporate tax announcement is a pain for Scottish Labour

The shadow chancellor's recent praise of competitive rates of corporation tax makes life harder for the Scottish Labour party, which opposes the SNP's plan to reduce the corporate tax rate in Scotland.

The SNP’s plan to reduce the corporate tax rate in Scotland to 3 per cent below the UK rate has been subject to a lot of criticism – and with good reason. It’s a terrible plan. Just ask the Canadians. Between 2007 and 2012, Mark Harper’s Conservative government cut Canada’s federal rate of corporation tax from 21 per cent to 15 per cent in the hope companies would hire more staff, invest in research and purchase new equipment, thus boosting their profits and growing the economy. Instead, businesses hoarded the savings and hiked executive pay. Frustrated by such brazen corporate greed, the then governor of the Bank of Canada, Mark Carney, took the unusual step of telling Canadian firms to free-up the billions of dollars’ worth of “dead money” they were sitting on: spend it productively or return it to investors, Carney said, but don’t just let it rot in the bank.

Up until now, Scottish Labour has aggressively pursued the SNP over its corporate tax policy. It has argued that Alex Salmond’s obsession with slashing the tax proves an independent Scotland would not be the Nordic-style social democracy envisioned by many Yes campaigners. By contrast, it would be a low-wage, light-touch tax-haven run for the benefit of predatory multinationals. But that attack line (hopelessly overcooked, as ever, by Scottish Labour’s press team) was abruptly undermined this week when Ed Balls began singing the praises of low corporate taxes. During a speech at the LSE yesterday, Balls said: “The last Labour government left Britain with the most competitive rate of corporation tax in the G7 and we are committed to maintaining that position.”

To be clear, Balls is not talking about lowering UK corporation tax from its current rate of 21 per cent. Indeed, Labour remains committed to reversing the 1 per cent reduction planned by George Osborne over the coming 12 months. But the logic of Balls’ argument – that Britain can attract investment by undercutting other major economies with “competitively” low business levies – is indistinguishable from that used by the First Minister to justify his party’s position on corporation tax. Just substitute “Scotland” for “Britain” and “London” for “the G7”. (Incidentally, Labour’s UK-wide case for lower corporate taxes is every bit as weak as the Nationalists’ Scottish case: according to the TUC’s Duncan Weldon, British companies have built up a staggering £600bn corporate surplus over recent years.)

Balls’ announcement highlights one of the key problems for Scottish Labour as it attempts to bring its central belt and west coast heartlands back on side before September. For all the party’s talk of Scotland’s “progressive” future within the UK, it can’t disguise the fact that Balls and Miliband are almost as hawkish on the deficit, welfare reform and immigration as the Tories. It is no good Johann Lamont deploying the same-old exaggerated rhetoric against the SNP (“Look beyond the saltire. Look beyond the plaid … We are the crusading force in Scottish politics”) when the next UK Labour government intends to match the Coalition’s spending cuts pound for pound in 2015/16. Likewise, Gordon Brown can’t really expect people to take his warnings about SNP economic policy seriously when, as Chancellor, he presided over a debt-and-finance-fuelled boom that ended in Britain’s worst financial crisis since the 1930s.

In some respects, the obstacles Johann Lamont faces in trying to craft a progressive case for the Union mirror those of Ed Miliband as he heads into the next election. Both leaders have to explain what centre-left radicalism looks like in the context of tight budgetary constraints. Both have to cope with opponents who are more adept at communicating their core messages. Both are also, unfortunately, hogtied by the past. Just as the wider British electorate still seems to hold the Blair and Brown administrations responsible for the state of Britain’s economy, so the Scottish electorate looks back on eight underwhelming years of Labour rule at Holyrood and thinks ‘We can do better’.

Of course, the key difference between Lamont and Miliband is that Miliband actually runs his party. Lamont, on the other hand, has to work with the policy programme she is given. It is difficult to overstate how awkward this is for Scottish Labour. The SNP’s corporate tax plan was a gift. As the Canadian experience shows, cutting corporate taxes makes little economic sense – unless your goal is to boost company profits without generating additional revenues for the state. Nor does it make any real political sense. Scottish business remains overwhelmingly hostile to independence, while representatives of the broader Yes campaign have repeatedly expressed their opposition to the policy and resent having to answer for it at public meetings. Yet, from now on, whenever Scottish Labour attempts to raise these points, all the SNP has to do is refer them back to Balls’ speech. It’s a familiar argument, but one that bears repeating: the only viable future for the Labour party in Scotland is more autonomy. For as long as it remains anchored to Westminster, the SNP will have the advantage. 

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The deafening killer - why noise will be the next great pollution scandal

A growing body of evidence shows that noise can have serious health impacts too. 

Our cities are being poisoned by a toxin that surrounds us day and night. It eats away at our brains, hurts our hearts, clutches at our sleep, and gnaws at the quality of our daily lives.

Hardly a silent killer, it gets short shrift compared to the well-publicised terrors of air pollution and sugars food. It is the dull, thumping, stultifying drum-beat of perpetual noise.

The score that accompanies city life is brutal and constant. It disrupts the everyday: The coffee break ruined by the screech of a line of double decker buses braking at the lights. The lawyer’s conference call broken by drilling as she makes her way to the office. The writer’s struggle to find a quiet corner to pen his latest article.

For city-dwellers, it’s all-consuming and impossible to avoid. Construction, traffic, the whirring of machinery, the neighbour’s stereo. Even at home, the beeps and buzzes made by washing machines, fridges, and phones all serve to distract and unsettle.

But the never-ending noisiness of city life is far more than a problem of aesthetics. A growing body of evidence shows that noise can have serious health impacts too. Recent studies have linked noise pollution to hearing loss, sleep deprivation, hypertension, heart disease, brain development, and even increased risk of dementia.

One research team compared families living on different stories of the same building in Manhattan to isolate the impact of noise on health and education. They found children in lower, noisier floors were worse at reading than their higher-up peers, an effect that was most pronounced for children who had lived in the building for longest.

Those studies have been replicated for the impact of aircraft noise with similar results. Not only does noise cause higher blood pressure and worsens quality of sleep, it also stymies pupils trying to concentrate in class.

As with many forms of pollution, the poorest are typically the hardest hit. The worst-off in any city often live by busy roads in poorly-insulated houses or flats, cheek by jowl with packed-in neighbours.

The US Department of Transport recently mapped road and aircraft noise across the United States. Predictably, the loudest areas overlapped with some of the country’s most deprived. Those included the south side of Atlanta and the lowest-income areas of LA and Seattle.

Yet as noise pollution grows in line with road and air traffic and rising urban density, public policy has turned a blind eye.

Council noise response services, formally a 24-hour defence against neighbourly disputes, have fallen victim to local government cuts. Decisions on airport expansion and road development pay scant regard to their audible impact. Political platforms remain silent on the loudest poison.

This is odd at a time when we have never had more tools at our disposal to deal with the issue. Electric Vehicles are practically noise-less, yet noise rarely features in the arguments for their adoption. Just replacing today’s bus fleet would transform city centres; doing the same for taxis and trucks would amount to a revolution.

Vehicles are just the start. Millions were spent on a programme of “Warm Homes”; what about “Quiet Homes”? How did we value the noise impact in the decision to build a third runway at Heathrow, and how do we compensate people now that it’s going ahead?

Construction is a major driver of decibels. Should builders compensate “noise victims” for over-drilling? Or could regulation push equipment manufacturers to find new ways to dampen the sound of their kit?

Of course, none of this addresses the noise pollution we impose on ourselves. The bars and clubs we choose to visit or the music we stick in our ears. Whether pumping dance tracks in spin classes or indie rock in trendy coffee shops, people’s desire to compensate for bad noise out there by playing louder noise in here is hard to control for.

The Clean Air Act of 1956 heralded a new era of city life, one where smog and grime gave way to clear skies and clearer lungs. That fight still goes on today.

But some day, we will turn our attention to our clogged-up airwaves. The decibels will fall. #Twitter will give way to twitter. And every now and again, as we step from our homes into city life, we may just hear the sweetest sound of all. Silence.

Adam Swersky is a councillor in Harrow and is cabinet member for finance. He writes in a personal capacity.