The SNP in Power: Year 2

The SNP in Power - Year 2: Budgets, back tracking and backing down to business

In the wake of the budget fiasco and the SNP’s announcement that they will not bring their manifesto commitment to scrap the council tax before this parliament, Donald Morrison looks at how year 2 of the SNP in power in Holyrood is shaping up.

What has been latterly described as one of the most ‘turbulent weeks in a decade of devolution’ culminated in a last minute and fleeting show of amity in the parliament as the SNP’s second budget was finally passed with an overwhelming majority. However, the road to this point was a rocky one to say the least. Last-minute negotiations, ‘arrogant brinkmanship’, election/resignation threats, unexpected alliances, inane posturing, sudden ‘tactical’ about turns; these are all the melodramatic ingredients we may expect from an episode of the West Wing but certainly not in a routine parliamentary budget. Yet the creation of the 2009/10 budget in Holyrood had all these ingredients each party did its uppermost to ‘distinguish’ itself at the negotiating table.

What lent gravity to the Pythonesque intensity of these proceedings was not just the fact that the budget failed to get through its second stage, but failed at a time when Scottish working people and their families, on the cusp of an ever widening recession, needed decisive and radical action. What is more if the budget had failed Scotland would have lost £1.8bn of accelerated capital expenditure earmarked for this year, returning public spending to last year’s levels, possibly costing an estimated 35,000 jobs. This initial failure was historic as this was the first time a government in Holyrood had lost a budget vote. It seemed that no one was entirely sure what would happen next. In the face of such uncertainty Labour leader Iain Gray raised the possibility of a vote of no - confidence and Alex Salmond put the SNP on an election footing. Both threats proved to be vacuous. An election at that point would have benefited virtually no-one in Scottish politics and would not have been warmly welcomed by the electorate.

However, now that the dust has settled and all threats of elections and resignations staved off for another year we may want to reflect not just on the creation of this years budget but also what this budget has meant for the SNP and the politics in Scotland as a whole.

Iain Macwhirter writing in the Sunday Herald aptly described the whole parliamentary bartering process as ‘a kind of political theatre’. This is startlingly true when we consider the fact that really not much changed in the offers made to opposition parties over the week since the budget was reintroduced. The same budget that failed by one vote on Wednesday 28^th January was reintroduced and, after some mild tweaking, passed all three stages overwhelmingly the following Wednesday, with only the two Green MSPs remaining unrepentant. So what had changed?

Well, not all that much. The Tories had already been squared away by Swinney with a quarter of a billion to be spent on abolishing business rates and tackling hospital infection. That the SNP would side with the Tories in abolishing business rates while doing nothing about council tax must seem astonishing to those working class voters who switched to the SNP on the basis that they were going to change the basis of local taxation. However, the tactics of both the Labour and the Lib Dems were the most bewildering of all. Labour demanded that money be directed into apprenticeship schemes and when the budget offered such a package they decided to vote against it anyway – there is just no pleasing some people.

Clearly, Labour was playing politics here - trying to distance themselves from the SNP without substantial justification or any substantial alternative budget plan of their own. If the budget had passed - which they had fully expected it to - there would not have been the same pressure from all sections of the press for them to explain their actions.

The most spectacular climb down of all was from the Lib Dems who had stuck rigidly to their demands for a 2p income tax cut throughout, which would have cost a total of £800m in cuts in public spending. As Swinney intends to support the economy largely through public expenditure this demand was simply a ‘non-starter.’ Tavish Scott, at the last minute, sensing a similar public backlash as faced by Labour, crumpled and settled for Salmond writing a letter to the Calman Commission asking for Holyrood to have its own borrowing powers. Again, this was a largely political move lacking in any substance as the Calman Commission was setup by Gordon Brown’s lackeys in Scotland to undermine Salmond’s national conversation on independence. This concession seems more like a mere distraction for the SNP on the road to independence than any significant political achievement for the Lib Dems. In any case, the logical end-point of the argument for increased financial powers for Holyrood is full sovereignty.

What must have first seemed like a victory for the two main opposition parties in overthrowing the budget and bursting Salmon’s bubble quickly became seen as a tactical blunder. Jim Wallace writing in the Guardian stated that: “Both parties wished to fire a shot across the bows of Salmond's minority government.” However, a poll conducted by YouGov soon after this nominal Lib-Lab victory revealed that support for the SNP had increased and that the public largely blamed the opposition for the budget failure. Apparently, the shot misfired. Tory MSP Derek Brownlee commented "At Westminster the defeat of a budget would bring down the government. At Holyrood, it seems, it brings down the opposition."

The biggest casualty however was the Green Party’s home insulation programme. Initially the Green MSPs secured a deal of £22m for a start up scheme that would have seen 100,000 homes in Scotland receive free insulation. However, due to the fact that they were not clear on the last minute details of this funding both Harvie and Harper voted against the proposal. In the revised budget the SNP clearly punished the Greens for their rebellion and slashed this package by £7m. The home insulation scheme is most definitely a worth while project in the fight against fuel poverty and carbon emissions, especially as 21% of UK carbon emissions come from homes. It is unfortunate that due to tactical naivety and grandstanding on the part of the Green MSPs this funding was reduced.

The final budget was therefore a patchwork of proposals from all the parties with a variety of measures to support Scotland through this unfolding economic disaster - allegedly. Key proposals see the SNP continue to keep a freeze on council tax yet appallingly drop their own consultation on a local income tax. On the plus side, the budget also continues to reduce the cost of prescription charges from £5 to £4. Furthermore, it has brought forward £230m of capital spending on infrastructure projects around Scotland in a bid to sustain 4,700 jobs.

What this budget highlighted was not just the fragility of the SNP’s power and the irresponsible political manoeuvrings of both Labour and the Lib Dems, it showed the limitations of the devolutionary settlement compared to the powers a Scottish Government would have under full independence. It also highlighted how quick the SNP are to side with business and put profits over people.

The second budget sees the SNP continue with some of its popular left of centre policies; policies which socialists continue to campaign for such as free prescription charges, free and nutritious school meals etc. It must be stressed that it is this ‘left of centre’ stance which has largely contributed to the SNP’s success. Their pledges to abolish the Forth and Tay bridge tolls, an end to PFIs, their grassroots fight to save accident and emergency departments in Lanarkshire and Ayrshire, abolition of student fees and a greater – though still inadequate – emphasis on publicly funded social housing are what have allowed the SNP to make inroads in previous Labour heartlands.

Yet the real face of the SNP is thoroughly capitalist and it is when the mask slips and their largely neo-liberal orthodoxy revealed that they are at their least popular. As they continue to hold power examples of this are becoming more and more frequent. First and foremost, there is the issue of the Scottish Future’s Trust, the SNP’s alternative to New Labour’s rotten and expensive PPP/PFI schemes.

“Our proposal for a Scottish Futures Trust will see greater use of public bond issues so that our public services can have access to lower cost borrowing, our public assets can be held in trust for the nation, all without the unnecessary private profit that is an integral part of PFI”.

This initial proposal could be seen as a genuine low risk alternative way to raise capital expenditure though the issuing of government bonds. However, the consultation paper launched a year later dramatically changed the premise of the proposal. As Unison stated the "proposals are in both rhetoric and substance far removed from the 2006 SNP plan".

The plan as it now stands continues the involvement of a third party private sector in the bidding process and thus the inherently flawed process which has robbed the public purse of billions in extortionate and stringent repayments will continue. As Gordon Morgan writes in Solidarity’s submission to the consultation on Scottish Futures “rather than simply allowing Local Authorities and Health boards full prudential borrowing powers, and allowing them to issue bonds, a new Private Sector Investment Bank (with added public sector ethos) is to be set up”. The SFT will be a non-profit making company and in essence one massive nation-wide coordinated PFI. To put it simply, instead of lots of little holes in which money is drained out into the private sector there is to be one big one.

Other examples of the SNP courting big business and abandoning election pledges are numerous. Their failure in both budgets to fulfil their full election promises to students; their cowardly refusal to support the Grangemouth Oil Workers’ strike in defence of pensions’; their continued sucking up to the leadership of the Scottish banking industry even after the credit crunch exposed their practices as incompetent and driven by remarkable blind greed; Alex Salmond’s personal intervention to save Donald Trump’s golf course despite local council opposition – all attest to the SNP’s pro big business blinkers.

Above all however, it could be their shameful abandonment of their local income tax pledge which could undermine the SNP’s efforts to replace Labour as the natural party of the working class in Scotland.

I can only presume that the SNP were not serious about the abolition of Council Tax"

Crucially, Salmond has not once criticised Brown’s £50bn bank bail out. Steve Arnott, in solidarity’s pamphlet on the economic crisis, writes:

‘the SNP…have been promoting a capitalist vision of independence for Scotland that had a lightly regulated financial sector at its heart. Swinney and Salmond have close connections to the rich Edinburgh financiers that brought the Royal Bank of Scotland and HBOS to their knees.’

Despite some left leaning policies, at their heart SNP are not that far removed from New Labour, and as the recession intensifies in Scotland the SNP will be continually forced to make choices between working people and big business.

Whilst this second budget has highlighted the limits of the SNP power it also has highlighted the limits of devolved government. That the Scottish Parliament does not have borrowing powers and is unable to make moves for complete public ownership of the banks means that Scotland is essentially unable to protect itself against the unfolding recession. It is clear that if Scotland had achieved independence already we may well have been in a better position to protect our economy.

It is clear that more and more people are coming round to this way of thinking as the Sunday Herald’s TNS System Three poll has demonstrated. This poll began after the SNP came to power and people were asked if they supported Scotland becoming an independent state. Initially opposition to independence ran as high as 50% but asked the same question after the recent budget defeat and this opposition fell by 10%. The final figures showed that despite a worsening economic climate 38% supported independence whilst 40% oppose it, and this before the real prospect of a Tory government after the next Westminster election has sunk in. Support for Scottish independence hangs on a ‘knife-edge’, according to the Sunday Herald. The establishment party MSPs remain divided on the issue, however most in Holyrood seem to agree that more fiscal autonomy is needed.

The struggle for Scottish independence is gaining more momentum and the SNP are committed to a referendum on the issue at the end of their first term. It is here that the work of socialist parties will be vital. Solidarity must work and campaign in tandem with the SNP in its fight for independence, but it is essential that, as the SNP drift away from their manifesto pledges, Solidarity is there holding ministerial feet to the fire and providing a genuine socialist alternative to the public. It is the height of cynical political manoeuvring that Labour – at least in rhetoric - have shifted more to the left as an opposition party. Without a shred of irony or self awareness Wendy Alexander described Labour’s battle with the SNP as a battle of ‘nationalism vs. socialism’. The opportunism and/or delusion behind this statement is breathtaking.

The SNP gained support as a left of centre party campaigning on issues that would improve the lives of working folk. These campaigns and issues are what attracted previous Labour voters and others to give the SNP a chance - not just as a punishment for the drab, complacent and stale leadership of New Labour - but also as an alternative vision of what Scotland could be like with a genuine left of centre social democratic government.

The SNP do yet appear to have woken up to the fact that they are popular when left of centre, less so when toadying to the interests of business. The fact that the SNP’s success is linked intrinsically to left-of-centre policies should give heart to socialist activists, as it is these strong left wing policies that still chime with the majority of people in Scotland.