Focusing on the council tax freeze ignores the need for wider reform

Before we pick apart some of Professor Midwinter’s arguments set out in today’s Scotland on Sunday, first let’s welcome the debate.

It is rare that we have serious – or at least semi-serious – debates about policy in the public domain and this one is a biggy.  While it is framed around the need to consider the affordability of public services and provision in the current landscape of cuts to the Scottish block grant, at its heart is a more fundamental matter.  Should we strive for universal provision or target funding at those who need it most?

In truth, it is the kind of policy area that whets the whistle of Labour much more than the SNP, which has far less of a social policy tradition in its DNA.  Indeed, the party’s approach to policy formulation in this area has always been of less interest to the big brains of the party whose boat is floated by economic stuff.  The party is great at the vision thing on the kind of Scotland we want to be, advocating a distinctly left of centre, socially progressive hue.  Words like fair and common weal and social wage pepper speeches but what is lacking is the intense policymaking and dialogue within party structures to work out what that actually requires a nation to do.

Hence, the attraction of universalism or as some have dismissed it, retail politics. There’s an element of truth in this – why would a party which has successfully campaigned its way into majority government on the back of universal policies tear those up?  Whether the SNP and the Scottish Government is in fact examining the affordability of any of its so-called “free” policies and working out different ways of tailoring the offering is a moot point:  it doesn’t have to, when Labour is doing the heavy lifting for it.  Labour might just find itself advocating, for example, raising qualification for a free bus pass to 65 – as Midwinter suggests – and the SNP deciding to accept the shift reluctantly in public and with some glee in private.

But a point of placement. Let’s not forget that Labour started the craze for universal and free stuff.  Free personal care, free bus travel, free heating systems for older people – all of these were introduced by a Labour-led administration when money was no object. In fact, I recall that Labour-Lib Dem executive resisting attempts to widen energy efficiency measures to the poorest families with young children because the money was needed for rich pensioners to get new heating systems.  And indeed, at Westminster, somewhat bizarrely it was Labour and the left which led the charge against cutting off child benefit for the most wealthy on the basis that it overturned the principle of universality in one of the last benefits to offer it.

So, having welcomed the debate which Labour is having with itself and bringing to our attention, let’s get on with cutting through some of Professor Midwinter’s crap.

Firstly, the charge on the Scottish Government that it has dismantled anti-poverty spending to the tune of £1 billion. To arrive at this figure, Midwinter selects policy and spending programmes which he considers to be anti-poverty and of course, ignores others. But he is right:  the Community Regeneration, Supporting People’s and Fairer Scotland Funds were handed over to local authorities and community planning partnerships to spend. But if they decided not to spend them on tackling poverty, they are to blame for the loss, not the Scottish Government.

And this actually points at a bigger issue. Unlike Labour which ring-fenced every new pot of money for every centrally announced and planned initiative – to the tune of nearly a billion pounds by their end days – the SNP trusted local government when it said it should be freed up from central constraint to deliver “local solutions to local needs”.  If those same local authorities have over the last six years made spending decisions which mean those funds haven’t been targeted at their original purpose, then maybe we need to shine a critical light there.  And work out how to fix that.

Indeed, it would be interesting to know just what councils have spent the money on.  They should be required to justify this, rather than wrongly blaming the Scottish Government for trusting councils to do as they said they would.  And that might well lead to a much broader discourse about whether local authorities as currently structured and populated are fit for purpose.

Secondly, the criticism against free prescriptions policy is unjust – and somewhat disingenuous, given that Labour was at pains to remind the voters of Dunfermline that they supported its introduction. For every well-off person who benefits when they occasionally need a pill or lotion, there are far poorer people who are reliant on whole streams of medication to manage their conditions who used to have to pay out significant parts of largely limited incomes on doing so.

Nicola Sturgeon’s objective on becoming Health Secretary in 2007 was always to introduce free prescriptions for those who need it most – the rules on who qualified had emerged in haphazard fashion so that some people with long term health conditions and disabilities got and some didn’t. But analysis suggested that expanding the qualifying criteria and the means test would actually cost more to administer than actually making all prescriptions free. Professor Midwinter ignores this context completely.

If the bill for free prescriptions is rising, then that is bound to be linked to our ageing population and sick man of Europe tag – entirely separate issues which need different policy solutions.  Keeping people healthier longer ie preventative activity, is actually a keystone for Scottish Government health policy, and more of it is required. Investing in this will bring the overall prescription bill down in the long term.

Finally, there’s the council tax freeze. There is no quibble here that given its longevity, it has meant a substantial saving for better off households and that even proportionately, those on the lowest bandings are not saving as much from the policy as others do.  But it is unhelpful only to quote the savings at the top and the bottom:  I’d imagine UK Labour, given its focus on the “squeezed middle”, would be just as interested in the savings applying for Bands C to E housing where these “hard pressed families” are likely to be living.

And even if they are still not saving as much of their income as those in these highest bandings, the wider picture of who is bearing the brunt of UK cuts and austerity measures needs to be factored in. As the Institute for Fiscal Studies has been telling us since 2010, that’s these same “hard pressed families”. Take away the council tax freeze and that would no doubt tip some of these families – with children – over the precipice. What are the wider consequences of this for other public services like housing, social work, health and education?  This kind of modelling has to be done before arriving at the conclusion that the council tax freeze is inherently unfair and now a massive problem.

Looking simply at local authorities’ needs, ‘m afraid I’m not getting how allowing them to raise council tax will add significantly to their spending power. £70 million is the total estimate for a 3% increase at Band D levels across the whole of Scotland, yet the total local government allocation last year was just over £10 billion.  We are talking pennies here in budgetary terms, yet the increasingly shrill calls from some councils to be freed to use their tax powers give the impression that we are talking serious money.  We’re not.  And say, councils are allowed to raise tax and they all choose to do so by say, 3%. It’s a universal, flat rate increase paid by folk in the wee houses as much as the big ones.  Who does such a raise hurt the most?

Moreover, what impact would any council tax rise have on council tax benefit requirements?  Would more people become eligible for benefit? How would that be paid for? Is Scottish Labour remembering that the monies for that pot are now devolved and were only kept at last year’s levels because the Scottish Government reinstated the UK Government’s 10% cut? It is to be hoped that Professor Midwinter’s analysis of the situation is rather more detailed than the simplistic statements in this article suggest.

There is no doubt that the parties are effectively dancing around the pinhead of the council tax freeze to avoid the bigger issue of local tax reform. The SNP parked its commitment on local income tax a long time ago;  no one except the Scottish Greens has investigated the plausibility of a land value tax;  and Scottish Labour appears to have shelved its 2007 manifesto commitment to add new bands to the top of the council tax structure.

Yet, working out how local authorities can be made more accountable for their spending decisions by allowing them to raise more of their own income is a key part surely of this debate.  Professor Midwinter is right – fiscal realism is necessary but we won’t get it if no party is prepared to consider how we create a more sustainable funding base for all public services, including local ones.  Targeting universal and supposedly free services to justify a shift towards means-testing might provide some short-term political answers for Scottish Labour, but it won’t provide effective policy solutions in the long-term.

Well, she started it

First, an admission.  I like Johann Lamont.

I might not always agree with her politics but there is a robustness there which means you can say you don’t agree with her and she won’t flounce out of the room.  She’ll even listen to your opinion.  And throughout her time as an MSP and even, as a Minister, there was a real attempt to stay true to who she was.  Which is why every day, she’d be on the train at 5.30 heading home to have tea with her family and when they were younger, help with homework and bath time, before heading out the door for an evening shift of politics.

I admire her too, for many of the unfashionable causes she has championed over the years – carers are an obvious one – and for the fact that she led a backbench rebellion against her administration’s opposition to Tommy Sheridan’s poindings and warrant sales bill.  Indubitably, there were base politics at play here:  Sheridan was, after all, snapping at her heels in her Pollok constituency.  But that too is worthy of respect.  When it came to it, she put the people she represented and what she believed in before party.

She is a fully paid up member of the scary Scottish wimmin in politics club and I like that.  Takes one to know one after all.

And even though I like the fact that over the years, she has demonstrated a welcome ability to do the political street-fighting bit, I cannot understand what possessed her to attack Nicola Sturgeon the way she did at FMQs this Thursday.  To try to make a wider political point, about the unfairness, perceived or otherwise, of Scottish Government policy by attacking the earnings of the Depute First Minister – AND HER HUSBAND! – was shameful.

As a woman who has represented one of the most impoverished constituencies in the country for thirteen years, she knows that very few women ever get to earn big sums.  Indeed, a while ago, she was one such, having taken home a Ministerial salary herself.  And she also knows how demeaning it is for a woman to be treated like a chattel, lumped in with her husband’s earning capacity.  What Nicola Sturgeon’s husband earns – indeed, what Johann Lamont’s husband earns as a longstanding Glasgow councillor whose salary comes directly from the public purse – is an irrelevance in this day and age.

For every woman who needs not to care what their husband earns and how, there are thousands more who live in economic dependency, constantly reminded – yes, even in this day and age – that without him and his earnings, they’d be on the street.  It’s that imbalance of economic power which compels many women to stay, with their children, cowering in fear and putting up with the abuse and the violence which still define far too many modern marriages and relationships.

So, for a woman so steeped in traditional politics, who has climbed to the very top of her party, by making a virtue out of pointing up inequalities for women, to attack another female politician in this manner in order to score a cheap point, is low.  About as low as you can go.

Such tactics diminish the debate that Johann Lamont purports to be trying to create in Scottish politics, about what kind of public services we can afford.  It is a debate which is welcome and overdue – which is not the same as saying that I agree with her contention, before the SNP supporters bray at my betrayal in the comments section.

And actually, to fall into simplistic party lines on this one is disingenuous.  There are as many SNP folk who have muttered about whether free everything for wealthy pensioners at the expense of poor children – for universality appears not to apply to them – as there are Labour ones.  I know, for I have muttered with them.  Free allsorts makes for good short-term politics:  it helps wins elections after all, but it does not provide a coherent base upon which to fashion a nation.

But if we are to have a grown-up debate – some of us cling to the prospect of such a concept – let’s first attempt to offer some balm to a few troubled middle class consciences.  The council tax freeze probably does disproportionately benefit the better off.  If you are one such, who frets at spending your financial filip on fripperies, give it away.  If you are so bothered at the idea of that money burning a whole in your pocket, resulting in poor pensioners and single parents struggling, then donate your ill-gotten gain to charity.  There are plenty of good causes which would welcome your largesse.

This one does have to be stripped out of the debate on the great government give-away.  As Kenny Farquharson pointed out on twitter, prescriptions and bus fares and the like are benefits:  a tax freeze is different.  In any event, Johann’s thinking on this one is muddy.  It is economically illiterate to claim that the council tax freeze is costing local government jobs, resulting in incomes being lost to the economy.  The solution to that problem is not to take more tax out of other people’s pockets to keep folk in the public sector in work, for that also removes vital income from the economy.  Or do these earnings, because they are made in the private or third sector, not count in Scottish Labour’s view of all things economic?

Johann Lamont is indeed brave for wanting to kickstart this debate at all, particularly in its efforts to define a place for Scottish Labour in our political future.  I don’t buy the lazy SNP line that she is simply aligning her party with the London lot, though Ed Balls’ proposal for zero-budgeting is a bandwagon upon which she should jump.  Indeed, I’m sure it’s something I’ve heard John Swinney champion in the past.

And the SNP while making political hay in the short term about Scottish Labour stealing away everyone’s supposed freebies, should welcome the debate.  For, whatever is discussed and divined in the next two years, the conclusion is already inescapable that Scotland needs more powers to deliver the policies it wants to.  Johann Lamont appears to have conceded this point by moving at last, to set up a Labour commission on devolution.  She suggests that we must learn to deliver social justice on scant resources, yet she cannot ignore forever the fact that if we had control of all fiscal powers and levers, we would be better placed to decide how much we spend and on what.

Proving the maxim that a week is a long time in politics, I bemoaned last Sunday that we still do not know what Labour is for.  On Scotland Tonight, I opined that Johann Lamont might well be committing political suicide with this venture.  If she is properly serious about this debate, she is unlikely to reap electoral gains from its outcome.  But the debate she has started has the potential to give Scottish Labour a purpose and a platform way beyond the next UK or Scottish elections, whether we are independent or not.

And if she can resist the temptation to deploy more tactical low blows, she could succeed in challenging the SNP to engage in a little more thoughtwork on the policy front.  Johann Lamont might well have started something which we can all engage with.

Does BBC Scotland’s poll provide comfort for Labour or the SNP?

BBC Scotland’s poll offers a fascinating insight into the “people’s priorities” for the forthcoming spending review and Scottish budget.  But do the findings offer comfort to Scottish Labour or the SNP?  Indeed, do they offer any party any comfort at all?

Headline results first:

– over 80% blame UK governments, either the previous Labour one or the current coalition, for the forthcoming cuts

– nearly three quarters support spending cuts to rein in the deficit but over 80% want cuts applied slowly, to reduce the impact on public services

– 55% either strongly or tend to agree that “the Scottish Government should use its tax-raising powers in order to minimise spending cuts in Scotland”

– in order of popularity, this is what respondents would “cut”:  raise the age for free bus travel;  a two year pay freeze for public sector workers, except those on low pay;  charging drivers for using major roads;  charge older people on higher incomes for personal care;  charge university students fees; cut jobs in the public sector;  cut public sector pensions;  increase prescription charges;  increase the council tax; and finally cutting spending in the NHS

At first glance, the findings would tend to support the SNP’s stance and statements to date on the Comprehensive Spending Review and forthcoming cuts.  People agree Labour is to blame, a huge majority support the gradual approach to cuts they have been advocating and in terms of priorities, ringfencing of the NHS budget and aiming for a council tax freeze for a fourth year are also the people’s top priorities – and by some margin.

Yet, there are several areas of disagreement, not least in respondents favouring a shift away from free and universal services towards a more targeted approach.  And people seem fairly relaxed in terms of charging for higher education through fees, a measure already ruled out by the SNP Government.

Labour would appear to be in a more difficult position.  Their party is number one culprit in the public’s eyes for the financial situation we find ourselves in and they have already signalled support for raising council tax.  However, it remains to be seen if Scottish Labour can successfully decouple itself from the UK Labour government in terms of blame for cuts – they are certainly trying hard to do so.  Moreover, their living wage campaign (although entirely spurious as I blogged in a previous post) is largely supported and they also favour a gradual approach to cuts.

However, two areas suggest that Scotland’s major political parties are behind the curve, in terms of public thinking.  A slim majority of respondents support using Holyrood’s tax raising power to offset the need for cuts.  Labour tentatively suggested such an approach but the SNP immediately shot it down in flames.  The reaction smacked more of winning the battle of the day rather than the long term prize.  It would seem that the Scottish public is less scared of paying more than getting by with less.  Yet, conventional electoral wisdom suggests that no party ever won a term in government by proposing to raise taxes.  The tartan tax option has been slow to raise its head in this debate – I doubt if this will be its last appearance.

The second issue again intimates that the public would prefer rationing and increased contributions for existing services, than actual cuts.  Four out of the top five favoured options (six out of ten in total) are about limiting availability and/or introducing new or increasing existing charges for services.  They are not cuts at all.  Although they acknowledge that some might have to go without, there is still an appetite and indeed, a desire to see such services survive for those who need them most.  A more thoughtful debate on the merits and limitations of universality is clearly required.   

The findings also suggest that the forthcoming Scottish budget should focus less on cutting spending and more on finding the money to maintain services, where possible.   If that involves new charges – for using roads and for university education – then so be it.  Innovative measures for raising money within Holyrood’s current powers is not something our political parties have a track record on:  they might have to develop one, and fast.

Finally, there is remarkable consensus on the preferred priority measures, no matter how the findings are disaggregated.  Except in three groups – women, voters aged 35 -54, and public sector workers.  These differences will be analysed in a future post, not least in terms of their significance for the forthcoming Holyrood election.