“I didn’t vote SNP to get Tory cuts”

And therein lies the conundrum for the SNP and John Swinney in particular when he outlines Scotland’s budget tomorrow.  Frankly he could be damned if he does and damned if he won’t.

This budget has been months in the making, so our Finance Secretary is unlikely to hear any last minute pleas.  He might be more amenable to a little praise though.  John Swinney is a shrewd operator – he didn’t get nearly enough coverage or praise for keeping the budget in surplus unlike previous spendthrift Finance Ministers – and I fully expect him to have a few surprises up his sleeve.  One could be a record end of year flexibility, there might even be some new initiatives announced in resonant areas like kinship care or early years.  If anyone can pull a rabbit out of the hat, Mr Swinney can.  Just don’t expect any glitz or glamour though, it’s not his style.

But all the trailing in this weekend’s newspapers suggests there will be more bad than good news tomorrow.  And there is a risk that the SNP get so caught up in the need to be responsible in government that they forget how they got there in the first place.  Scotland is not middle England.  We didn’t vote for this ConDem coalition and its approach to deficit reduction.  Moreover, a succession of polls have made it quite plain what Scottish voters expect of their government in this financial climate.

So, time for brave hearts, Mr Swinney.  Time to stand before the Scottish people, in their Parliament, and tell the UK Government to stick their cuts agenda up their arse.  Politely of course.  They can take £900million off the Scottish budget but we will simply find ways of putting it back in.  Twice now the SNP has trotted out the line  “a pocket money Parliament whose pocket money has run out”.  So prove your mettle.  No more standing in line for a handout, or doing the Unionists’ dirty work for them:  let’s raise the £900 million ourselves.  Yep,  make a unilateral declaration of fiscal independence. 

Who’s to blame for the mess we find ourselves in?  The banks.  So slap a differential business rate on them.  And introduce a land value tax on all their property assets.  The revenue stream on the Gogarburn palace alone could keep half the nation in home helps and health visitors for a year.  Double the tax every time a financial institution closes a branch or some other community asset.  No hand wringing please about the time needed to draft the legislation.  A bill can be put together fast if folk put their minds to it. 

There are other undesirable land uses we might want to milk for better purposes.  Big landowning estates that are effectively tax wheezes?  Not any more.  How about the Faslane base?  The nuclear power stations?  All those environmental polluters?  Whack with them with a land tax.  As for the proposal to freeze public sector pay, fine.  As long as increments go too, otherwise the fat cats at the top of the public sector are laughing up their sleeves.  The value of their annual increment is much greater than a measly 1% pay rise. 

But there are much more lucrative areas for the Government to squeeze.

How about the PFI contracts?  They cost us nearly £1billion a year and make one of the biggest dents in the public’s purse.  When the choice comes down to cutting classroom assistants and respite care for disabled children or paying grossly inflated fees to big multi-national companies – and yep, those banks again – I know which one I’d be making.  And I know I’d support my government to the hilt if they simply chose to stop paying the bills for previous administrations’ profligacy.  Time to tell them to sing for it Mr Swinney.  Get the Citizens Advice Bureaux involved, they’d be more than happy to help the nation renegotiate its credit terms, I’m sure.

The proposal to shift revenue into capital has been lauded almost universally,  largely by folk whom – no disrespect – probably do not understand the finer detail of the medium and long term implications.  So allow the burd to rain on everyone’s parade by pointing out that a much wiser owl than me once advised that revenue and capital were like oil and water:  they don’t mix.   Why are we raiding the money supposed to be for services, you know, for all the vulnerable people in our communities, to build shiny, new things?  Things that will simply add to our revenue burden down the line in operating and maintenance costs.  At the very least, a capital programme for austerity times should have as its mantra, make do and mend.  And people need to understand that capital spend is not cash in the hand, it’s largely borrowing consent ie the right to borrow a certain amount.  It has to be repaid like other debt, which again adds to the ongoing revenue burden.  It might make sense in the short term but in the long term, increasing our spend on capital projects does nothing to reduce the size of our public sector or indeed, our indebtedness.

Ultimately, what is there to stop the SNP Government saying no to Westminster?  To look at the cuts agenda, to look the Scottish people in the face, and to say no thank you, not on our watch.  Who is going to stop them or us?  Oh there would be a lot of bluster and bluff.  Andy Kerr, bless, might even burst a blood vessel.  But like everyone else he’d get over it and the world would not in fact stop turning.  Scotland votes differently from the rest of the UK, we deserve that to be recognised by our political parties.

It was Winnie Ewing who famously said, “I’m not here to settle down, I’m here to settle up”.   The time and the hour has come for the SNP to do just that.

5 thoughts on ““I didn’t vote SNP to get Tory cuts”

  1. Pingback: Rip it up and start again « A Burdz Eye View

  2. “I didn’t vote SNP to get Tory cuts”

    Most people didn’t vote SNP though did they? The SNP campaigned in the Westminster election to get a mandate to oppose Westminster cuts. More nats, less cuts – remember? It may have been a gramatically incorrect slogan but it was clear enough. Vote SNP and we will oppose Westminster’s cuts agenda. Most people voted Labour – a fact which the SNP has quite sensibly recognised.

  3. Love the rant agree 100% but the sad fact is the SNP are a minority government.

    If they were to be as radical as you suggest they would simply be booted out. There is an argument that would be a good thing but I don’t think we have reached that position quite yet.

    Swinney has been treading water with the budget. We’ll have to see how the mood swings when the real cuts come in – because they are hovering & someone is going to have to make them as long as we stay in the union.

    I don’t think it should be the SNP.

  4. Kate I completely understand your strong feelings on these issues, and I am sure that “raiding” is the last thing John Swinney wants to do, but your analysis is at risk of naivety in some areas:

    “Why are we raiding the money supposed to be for services, you know, for all the vulnerable people in our communities, to build shiny, new things? Things that will simply add to our revenue burden down the line in operating and maintenance costs.”

    This fails to recognise that investment in infrastructure (and areas like health facilities, new schools and social housing) not only raises economic growth (and in this climate saves slipping into recession) but thereby boosts tax receipts, reducing welfare costs and pressure on social and voluntary services, but also aids inward investment. Do we want more vulnerable, unemployed people to be created? With a 38% cut in capital spending and mass construction unemployment, that is what we would get.

    “At the very least, a capital programme for austerity times should have as its mantra, make do and mend.”

    While in some cases this may be appropriate, this is actually a higher cost option in the long run, as new build may be inevitable anyway (where a building is becoming functionally obsolete and can’t be adapted) , and with poorer operating efficiency in the meantime, energy costs etc will be higher.

    “And people need to understand that capital spend is not cash in the hand, it’s largely borrowing consent i.e. the right to borrow a certain amount.”

    True, but all capital projects are assessed for their economic impact via a HMT Green Book appraisal, which takes the cost of capital into account and assesses the investment against a “do nothing” option and other variants.

    “It has to be repaid like other debt, which again adds to the ongoing revenue burden. It might make sense in the short term but in the long term, increasing our spend on capital projects does nothing to reduce the size of our public sector or indeed, our indebtedness.”

    I disagree fundamentaly with that statement – economic growth, aided by infrastructure investment, not only improves public service delivery but does actually also increase the size of the private sector too. There can be a risk of crowding out or private sector investment for sure, where the supply of capital is limited, but not at the levels of investment we are talking about which will be below historic levels. Indeed capital investment is usually delivered by the private construction sector who then employ skilled people, pay business rates, generate corporation tax, etc.

    I would add that generally speaking debt for capital investment is a sound approach so long as the cost of capital is sustainable, e.g. through prudential borrowing at low rates of interest. However, as you very correctly identify, there is a huge issue with PPP models, as the cost of capital is way too high – akin to store card interest rates at 16%, for example. The three new high schools built here in the Borders were £72 million in construction cost, but will cost £312 million, I recall, to pay back. Great buildings, but far too expensive in the longer term.

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