A frozen budget for Scotland

Today John Swinney announced the draft Scottish budget for 2016-17, the final of this current SNP administration and a significant one in terms of Scotland’s future.  This was the first budget in which new powers over income tax and housing were available to the Scottish Parliament, courtesy of the 2012 Scotland Act, and perhaps the last one before the more comprehensive package of new powers is devolved to the Parliament through the current Scotland bill.

While the SNP will try to position it as a continuation of their record of investing in public services despite chastening budgetary constraints from Westminster, there is much to be desired from this budget for the people of Scotland.

There has been a real term cut of 12.5% in Scotland’s budget since the Conservatives came to power in 2010, a drastic cut that surely makes John Swinney’s job exponentially tougher as he tries to deliver all he can in terms of maintaining services but not running up irresponsible debts.

Despite this, the Government has made its priorities in protecting core services.  There were welcome increases in the health budget, with an extra £500 million being pledged which brings health spending to a record level in Scotland.  There were also funding increases for the much-criticised Police Scotland, with £55 million being added to their coffers.  Support for childcare and education has also been maintained, with their budgets being protected from cuts for the upcoming financial year.  Funding for Gaelic and Gaelic Medium Education has also been maintained at current levels.

However, with the budget being tightened and these new initiatives being launched, there has been some cuts to other areas of the Government’s spending.  This has meant that several areas are set to take a substantial hit.  The budget for railway development is to be cut by £50 million, funding for the arts is to be cut by £15 million, funding for fire and rescue services cut by £15 million. There are also more savings for Education Scotland and for Higher Education.

In contrast with all these new spending initiatives, the only change in the tax structure that the Scottish Government have put forward is an extra 3% supplement on LBTT (Stamp duty) for those buying second homes.  This will help raise a little more revenue, but in contrast with the spending plans and cuts that the Government are making, this is a drop in a rather large ocean.

The problem is that the SNP, in their attempts to be the good governance party for Scotland, refuse to take the option available to them of raising taxes on people and businesses to make sure that our national services are better funded.  Despite having the power to raise the rate of income tax, Swinney has deferred this option another year until powers over differing rates for different tax bands come in through the new Scotland Bill.

The announced council tax freeze is a red herring, with the guise of saving people money hiding the drastic cuts that councils up and down the country are continuing to have to make which impact severely on local services that people rely on.  John Swinney’s announcement means that council taxes have been frozen for nine years, which stretches back before the SNP came to power in Scotland and before the financial crisis of the late 2000s.  We are almost in an entirely different world now, politically and economically, but still councils are saddled with poor incoming revenue with which to deliver the basic services, such as schools, care, transport and much more, that our society relies on.  COSLA, the association for Scottish councils, also notes that the funding that the Scottish Government is providing independent of council tax is to be cut by 3.5%, almost £350 million.

These measures aren’t helping the poorest in Scotland, but severely hurting them.  Even through George Osboune’s austerity measures in England there has been a 2% rise in taxes, why can’t the SNP do something here rather than just acknowledge that there’s a problem?

The SNP’s remit is to govern for Scotland, and at the moment the majority of people agree that they are best placed to do that, even if they aren’t doing the best job.  While this is damning of the other parties, the SNP could really hammer home their dominance of politics in this country and affirm their left-wing values by creating a higher tax and higher service spending economy here in Scotland – but they refuse to.

The SNP have even suggested blocking the new Scotland Bill and denying themselves the prospect of the new powers that they believe Scotland should get.  While the fiscal framework for the new powers is far from perfect and needs addressing, the bluff and bluster over whether the party will reject more power for the Scottish Parliament seems to me as a major mistake.  From the perspective of improving Scotland’s capacity to govern itself, which the SNP must surely agree with, the new powers should definitely be vested in Edinburgh rather than Westminster.  And in the worst case scenario that this new deal leaves the Parliament hamstrung, surely that’s a great case for independence?  The logic and tactics of the SNP going ahead will be crucial to both their upcoming term in office and even to the future of Scotland as a whole.

This budget doesn’t rock the boat, and manages to maintain the SNP’s moderate line of opposing austerity but not increasing taxes.  This will be enough to see them through the elections next year with the weak state of the opposition, but the lack of ambition for the party could well be something that will come back to haunt them further down the line.

So with snow adorning the Cairngorms and the Christmas season rolling in, it seems the Scottish Government is getting in on the action and keeping itself frozen too.  Whether that’ll help them when the weather and the political action thaws out isn’t so sure.

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