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Scottish budget: how much money we don’t have

Tomorrow is all about the money.  The money that makes our worlds go round.  When John Swinney will be expected to show us the money and he’ll retort to the Opposition to show us the colour of theirs.

And frankly, it would be just as interesting and a whole lot more enjoyable if MSPs just played their favourite money-themed songs to the nation.

The fact is we kinda know what to expect tomorrow, right down to the speeches and the key messages.  The SNP Government will blame the big bad wolf of Westminster for turning off the taps and having the effrontery to deny what is rightfully ours in any event.  Expect too the usual call that if we only had all the powers of a normal country, control of all the economic levers how different it might all be, only that crucial bit of in what way different will not be spelled out.

Labour will ignore the economic reality of our times and that we are in this mess because their UK government helped get us here and call for more.  More spending on more things and more stuff to make our lives more better.  Oh, and more jobs please.  Without so much as saying how, why and what with, never mind what they’d make less to give us more.

The Lib Dems will ignore their complicity as junior partners in the Westminster coalition, repeat the refrain that if the government stopped dreaming about the supposed never-never and just concentrated on the here and now, we’d be better off.  But they might also pitch a few interesting ideas on how and where to spend the little money we do have.

The Tories will do likewise and if they are true to form, they will posit the most interesting ideas and alternatives to help generate economic growth.   Much of it will be ignored, which is as it should be, seeing as how interesting does not necessarily translate into workable nor desirable.

As for the Greens, well it depends which ones turn up.  Will it be the green Greens who lambast the Scottish Government for its failure to invest in environmental measures, our low carbon ambitions and public transport infrastructure?  Or will it be the social justice Greens who lambast the Scottish Government for its failure to address poverty, inequality and demand a back to the future economic approach?

So, having sorted out the messaging, what about the money?  Helpfully, last year’s Spending Review and draft budget laid a breadcrumb trail and largely, it will be as you were.

Health, benefiting from a manifesto commitment to be protected from cuts, will see its budget increased, with more money destined for health boards – a 3.3% increase, in fact.  Sport, which falls under this portfolio, is a big winner but much of its £47 million increase is for Commonwealth Games delivery.  Finance, employment and sustainable growth will also see a marginal increase in budget, as will infrastructure and capital investment.  Meanwhile, education and lifelong learning will see a near £200 million increase in budget.  That’ll be to pay for no tuition fees then.

The losers are culture and external affairs (down £5 million), rural affairs and the environment (down £19 million on last year) and justice (down £50 million on last year) and local government (down over £200 million on last year).

To add to the fun, the re-alignment of portfolios with the move of the Depute First Minister from health, wellbeing and cities to infrastructure and capital investment will involve some money moving around too.  She took cities and welfare reform with her, so there is likely to be a small budgetary transfer.  Although it would be helpful if the Finance Secretary didn’t forget (again) to make budgetary allowance for mitigating the impact of welfare reform, given that it becomes all too real in the coming financial year.

It will be interesting to see if the cuts in headline budgets proposed last year come to fruition – a dent of £200 million for local government will surely result in considerable cuts to frontline services.  The Finance Secretary might well be tempted to allow those axes to fall.  Those coalition deals which Labour groups cut with minority groupings to keep the SNP out of power in local authorities might not seem quite so clever now.  Who wants to be in power, if power means finding ways of doing more with less and upsetting voters along the way?

Moreover, these are the actual figures and do not reflect the real terms’ position.  They take no account of the “estimated GDP deflators published by HM Treasury“.  The Spending Review applied a deflator of 2.7% to the estimates for 2013-14.  Thus, a supposed Scottish budget of £28.27 billion is worth only £26.86 billion in real terms, which means cuts for everyone. Expect the Finance Secretary to make much of this.

And unless he is proposing to requisition some of the fossil fuel revenues which flow from the North Sea to the Treasury or has discovered a tree which really does grow money, however the Finance Secretary packages it, all spheres of public expenditure are going to have to work out what to spend less on in the coming year.  Which sets us up nicely for the annual game of managing expectations – already begun by North Lanarkshire council.  Only this year, it will be conducted with exceptional vigour, with councils in particular, trying to outdo each other on the outrage their initial cuts’ proposals will foment among the populace.

So, there we have it.   You know what lines the parties are likely to take.  You know what messages MSPs are likely to try and impart.  And most importantly, you know enough about the money to understand that we have less to spend – much less – on vital public services that we all need and cherish.

Aren’t you glad I saved you the bother of listening in tomorrow?

 

 

The audacity of hope and the art of the possible

This is A Burdz Eye View’s 500th post.

Even I’m surprised that I’ve managed to find 500 things to witter on about, though I’m conscious of repeated witterings on some issues, that seem to be aye with us.

I’m also aware that I change my mind – frequently.  What I said about a particular topic last year might differ from the opinion proffered now.  That’s because sometimes, things change, not least my own mood and views.  On some things I’m pretty consistent, but the luxury of having lots of opinions is the ability to change some of them from time to time.  The fact that I’m a woman helps too.

The number of people who read the blog astonishes me.  Views per month regularly surpass 5000, and 138 folk receive every blogpost into their Inboxes, with hundreds more accessing it through RSS feeds and the like.  Most readers are from the UK, but I’m tickled that there are folk all around the world – many expats it seems – who drop by from time to time.  The regulars, readers and commenters alike, are appreciated hugely, especially when debates get going – constructive and respectful ones – on the comment thread.  I thank each and every one of you who gives up their time to read what I write.  It is humbling indeed.

So, this should be a zinging post then, to mark such an auspicious occasion.  But rather, it finds me in reflective mode:  milestones tend to have that effect.

I am not by nature one of life’s shiny, happy people.  I am the sort who worries away into the wee small hours over trivial and existential issues by turn.  What will happen in the Eurozone gets slotted away beside what we’re going to have for tea.  And I’m overly fond of seeing the glass as half-empty, partly because I always think that more can be achieved, if only we’d stop settling for half measures.  Yes, there’s a need for pragmatism – it’s been a long time since I sustained myself on ideals alone – but things can always be better surely.  What I’m conscious of is that this desire often translates on the page as nit-picking and doom-mongering.

Frankly, we’ve got a lot to be pessimistic about.  The sense of unease and uncertainty emanating from the Greeks as they go to the polls again today is palpable and should remind us that whatever we’ve not got here, at least we aren’t being forced to vote for our country’s downfall.  Choose anti-austerity and they will be bombed out of the Euro, left to fend economically and socially for themselves; stick with austerity and the extreme levels of poverty now commonplace will only get worse.  Of course, this election could prove a global tipping point, as doom-mongering headline writers have reminded us.  We’ve been here so many times before that it’s hard to take this seriously, but we’re not in a great place.

And we are still largely adrift politically, with no clear consensus and plan to get us out of this mess.  There are promising signs with the new French President in particular, promoting ideas like Euro bonds, and we may yet get a European wide financial transaction tax, despite the frothing of the Tory half of the UK government.  But here in the UK, we seem to think we can continue to hold back the tide, conveniently ignoring the fact that a huge chunk of our GDP and economic well-being depends on having European partners to trade with.  The Chancellor’s Mansion House speech was yet another in the revisionist style, blaming the Eurozone crisis for all our ills and thinking that the solution lies in throwing money – more of our money – at the banks, exhorting them to lend it on to businesses and individuals.  Just what we all need – more debt.

I often doubt that we’re really feeling the pinch here in Scotland.  Out for a curry with an old friend last week, I was struck – again – by how full the restaurant was.  It’s a common occurrence.  Check out any decent eatery, hostelry or cultural happening in the capital and it’s stowed.  And even in places hurting with higher unemployment, people are still out and about enjoying themselves.  Maybe, we’ve just decided to live for the moment and allow the future to take care of itself.  Manana is our new mantra.

Or maybe things are not quite as bad as they could be.  There are signs of roots and shoots in the Scottish economy, and it’s only when you read speech transcripts, that you realise the energy and commitment of the Finance Secretary and others being invested in keeping the good ship Scotland afloat.  It appears to be working, at least in keeping the worst at bay, but as John Swinney suggests, much more could be achieved with the economic levers of a normal nation state.

Our political spats can often seem peripheral and irrelevant when set aside the big questions currently facing the Western world.  We need to ensure that the modern apprenticeship scheme delivers meaningful training and opportunities, as a thoughtful article by Iain Gray pointed out, but we should also welcome the fact that we have such a scheme at all.  And it’s this ability and willingness of our politicians to find degrees of difference in everything which encourages the public to shrink from engagement and even, voting.

The independence referendum should be providing a platform for real debate over our future, with a range of political and policy options being posited about the different options available to us – from the status quo to full independence and everything in between. Yet, already it has degenerated into posturing, scare-mongering and wagon circling.

The dominance of the confirmed yes-no camps in the campaign is polarising and sterilising everything, turning people off when they should be experiencing light bulb moments.  This is a once in a generation opportunity which people voted for in 2011 and it’s almost becoming too precious to be left to the parties to boss.  If people can stake ownership and build truly grassroots movements – more rather than fewer is better – to explore and convince of the art of the possible, then we have a chance of a fully engaged and informed electorate turning out in 2014 to record their preference and determine a clear view of where we are headed.

To get there, we need the type of political leader we’ve not seen on these shores for a long while.  Alex Salmond is still king of all he surveys, but recent incidents and headlines are chipping away at his invincibility, showing him in a less favourable light to voters.  Johann Lamont is turning harrying into an artform, with a gift for biting one-liners, but that does not a stateswoman make.  Ruth Davidson is starting to show what she can do but is held back by the toxicity of her brand and the adherence to made in UK beliefs rather than wholly Scottish ones.  Patrick Harvie has a lot to commend him in terms of politics and principles but his willingness to turn every drama into a crisis is wearing.  Willie Rennie is a consummate media performer but no one takes him or his party seriously anymore.

We have a politicial vacuum – some good performers on the stage but no one bringing the house down.  And given the aspirational nature of the big political question before us, oh for an Obama type to offer us the audacity of hope.  Dreams and ideas and thrills are what we need in the independence debate, from both sides, as well as impartial information on the pros and cons.

Yes, we can point to Obama as being the ultimate wearer of Emperor’s clothes.  The rhetoric has proved largely hollow and if we feel disappointed, imagine how all those thousands of black, disadvantaged and marginalised voters in America, who queued round the block to vote for him, must feel.  But there are still glimmers:  his recent speech offering an amnesty to young illegal immigrants suggests he hasn’t totally lost sight of his beliefs, even if commentators are more exercised by the political implications of the announcement.

But in a world where nothing is certain, where the future is a great big black hole, when fret is the feeling we go to sleep with and wake to, when even the weather is determined to frustrate us, surely the stage is set for a politician to step forward and offer the audacity of hope and the art of the possible.  To point to a different way and to offer to lead us there.

Vote! Tesco tax – good or bad?

Labour’s putatitve finance spokesperson Richard Baker accused the Cabinet Secretary for nearly everything, John Swinney, of failing to produce any rabbits out of the hat with the Scottish Government Spending Review.  But he was wrong.  Welcome back, Tesco Tax.

It was not trailed, nor pre-announced in any media report, nor mentioned in the manifesto, yet it is the comeback kid, now disguised as a public health levy.  And it is not strictly speaking a tax but a plan to increase the business rates of retailers occupying premises over a certain value and if they sell alcohol and tobacco.  This was what the Cabinet Secretary had to say about it in his speech to Parliament:

“In order to support the shift to preventative spending, I have looked to increase revenue for this purpose. Scotland’s health and social problems associated with alcohol and tobacco use are well documented and are something we are firmly committed to addressing. These problems affect not only the health of population, but create additional burdens on policing, local authorities and the NHS. As such, I propose that the business rates paid by large retailers of both tobacco and alcohol will be increased by a supplement from 1st April 2012.The estimated income this will raise will be used to contribute towards the preventative spend measures that will be taken forward jointly with the Scottish Government, Local Authorities, the NHS and the Third Sector.”

So a tax with a purpose: money to be raised from those big retailers who profit from sales of tobacco and alcohol will be put to tackling Scotland’s health and social problems associated with excessive use.  There are dangers inherent on starting down the road of hypothecation, as Bill Howat (he who chaired one of the earliest public sector reform reviews) warned on Newsnight Scotland on Thursday, but the Cabinet Secretary needed to raise income from somewhere to kickstart the shift to preventative spending.  It will only realise £40m a year, not enough to achieve whole population shift in our attitudes to alcohol and tobacco, nor to lessen the impact on families of alcohol misuse in particular, but it is a start.  And sends a clear signal about the direction of travel of this Scottish Government.

Of course, the retailers to be affected, and their cheerleaders in the British/Scottish Retail Consortium, CBI Scotland and it would appear, all of the Scottish media, would have you believe that their sky is about to fall in.  Ignoring totally that because they bulk buy in such huge volumes, they can charge less than corner shops for booze and fags and still make more profit.  Ignoring too that minimum pricing will raise their prices, and their margins, and that the public health levy will help ensure less of that goes into senior executives pockets and shareholders’ bank accounts.

Last time round, Labour blundered – in the burdz humble opinion – in siding with the interests of big business, particularly because it was close to an election.  It signalled just how far they were willing to go to oppose the SNP and left a sour imprint in the minds of many voters, that the party set up to defend, protect and promote the interests of the working class had shifted to the side of the producers of profit and gain, and frankly those who peddle so much pain in people’s lives.

It didn’t warrant a mention in Richard Baker’s speech on Thursday and the party has had little to say on it since, despite the cost of the levy and other business measures dominating the headlines – read Stephen Noon for a vigorous trampling of CPPR’s supposed analysis that so entranced journalists.

But the Scottish Retail Consortium’s comments are interesting – it “condemned” the proposal with its Director, Ian Shearer, fulminating that the measure is “illogical and discriminatory”.  Sorry, sir, but I’ll confine my concern about discrimination to stuff that really matters, like the gulf in pay between men and women, no doubt practised by many of your members.

Apparently, “Supermarket margins are already cut to the bone as stores compete to offer the best deals to cash-strapped consumers.”  Yes, that is the sound of laughter you hear accompanying this post.

“The UK already has some of the highest alcohol taxes in Europe. This tax would make it harder for food retailers to keep prices down for customers, and makes Scotland a less attractive place to do business, invest and create jobs.” 

Ah, now we get to it…. the threat.  If the Scottish Government goes ahead with this proposal, the supermarkets will retaliate, not with increased prices for alcohol and tobacco, but they will pass on the cost of the levy through food and other staples, which as we know will disproportionately impact on those with the lowest incomes.

Have these people no shame?  My advice to the Scottish Government is let them.  To coin a phrase, bring it on.  We have’t had some good old-fashioned class warfare in Scotland since Thatcher’s times and I reckon the populace are up for a battle.  So, we’d have the SNP Government, the consumer, farmers and other producers, farmers’ markets, the Green lobby, and the independent specialist food retailer all standing up to the bullying retail tactics of the supermarkets.  I’m salivating at the prospect already…..

Want my advice, Cabinet Secretary?  See them and then raise them.  I was rather taken with the idea behind Dr Richard Simpson’s motion this week to introduce powers to allow a tax on sugary foods…..

So, I think I’ve made myself pretty clear – I like the Tesco tax.  It will bring in additional income from those who can most afford to pay to enable a public sector revolution to begin, where we start investing in preventing issues like tobacco addiction and alcohol misuse happening in the first place.

But what do you think of the public health levy?

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