by Hazel Lewry
Alex Salmond has been elected, the Nationalists are in an unprecedented position with a more emphatic mandate than any political party in Scotland’s history, but what about those allegedly un-costed manifesto promises? They could be the shadow on the horizon.
The SNP offered, the electorate accepted, and it was a phenomenal bargain on both sides. Can it be delivered? In recent weeks many leading academics have been trotted out by the Unionist-backed media and their respective parties to decry the SNP manifesto as fiscally unobtainable.
Remember Salmond’s predatory/you’ll be sorry look towards Hain, Huhne and Howard on Question Time last month, all of whom were subsequently given cause to regret their lack of facts and thereby impertinence. The First Minister responded that it just might be wiser to wait for time to unfold events. Soon enough he’d either need to justify his proposals or he wouldn’t be elected and therefore everything was moot.
It was the trust of the Scottish electorate that put the Nationalists so resoundingly back into power. This trust had been built up over decades, grudgingly so in many cases, and a raft of broken promises under such an overwhelming mandate would decimate the Nationalists rapport with the Scottish people.
Their political opponents in the election were quiet about just how extravagant the promises were. For the most part because their own fiscal plans went from totally un-costed and requiring to be completely re-written, through to just a bit poorer than the SNP’s. There was an apparent fully-costed manifesto by the Conservatives, but only because they were standing ready to cremate a raft of social programmes and remove billions more from the average Scot.
My rough numbers didn’t equal what the SNP were proposing, with the imminent budget cuts from Westminster they couldn’t avoid putting some services on the block. Privatisation? That appeared unlikely given the SNP track record in government. There are only so many efficiency savings any human being can wring out of a given area. Last time I checked the Scots still hadn’t managed perpetual motion, although after May 5th, should we bet against it?
Somehow, somewhere, the SNP need to find about a billion quid, that’s simply not going to be in the next batch of pocket money. In the terms of Scotland’s budget that’s serious cash. In relative terms it’s about 3%, which doesn’t sound too horrible until another 4% or so is factored in for inflation.
It becomes obvious why Annie’s Tories wanted wholesale disruption to public services. Immediate savings, that’s what the Conservatives see and want irrespective of any severe long term national and cultural pain. Cut now, cut hard, cut often, and hang the anaesthetic is their cry. It is not acceptable on so many fronts.
Alex Salmond came from banking to politics and as an economist if anyone has a grip of fiscal policy it had better be him. John Swinney had a superb four years as Finance Minister, rightfully keeping his job. Both refused to tell the media or electorate how they would meet the manifesto promises. The media accepted it, from all the political parties, they are well used to broken election promises. That is a sad state of affairs.
The SNP has now promised to deliver for Scotland and ignore the acrimony of the last parliament, they still want consensus politics. Bare facts still say they’ll need it to get efficiency savings of 3%+ and still find almost another £1 billion for the pot.
Reading between the lines since Election Day it would seem the SNP are well on their way to both. If Swinney’s efficiencies do realise the savings anticipated, and with his track record that’s cautiously reasonable, then that £1 billion still needed some sort of magic wand. It came in the form of a May 5th landslide. The UK reportedly has just funded £200,000,000 [as a loan] for each year for the life of the present parliament. It has set uses but those uses can be incorporated into the budget.
The “loaning” of funds from one part of the UK to another is nonsense. That would be like a husband “loaning” to a wife who will only ever work in the home. He could bleat for it back later, but it’s not entirely realistic, unless or until the wife leaves.
It is also reported the tax varying powers are coming, and perhaps more than planned. With these powers being both required and pushed for by the SNP it is likely they will be used. Do not be surprised to see 1p, or thereabouts added to each tax band. This would in all likelihood be a measure of last resort, and only used after all other revenue sources are exhausted, however it’s there for the last top off if needed. Look upon it for now as the fiscal life raft.
Expect the return of minimum pricing on alcohol during the first parliamentary session, but anticipate a slightly higher base unit price with a legislation adjustment that will permit the revenues to be directly applied to NHS Scotland or rehabilitation services. In either case that’s cash which is no longer coming from the base budget. Anything curbing the booze culture gets my vote.
Expect the “Tesco Tax” to be resuscitated as well – will it stay where it was, or will it be increased slightly? Time and John Swinney will tell, but this would be completely in line with the SNP goals to level the playing field in the retail sector and put new vitality back into the high street, which can only be good for Scotland, her communities and her once vibrant culture.
The largest part of the few hundred million that remain will only come from one of two areas, higher income tax, or where I’d place my money, a review of PFI/PPI contracts. The contracts themselves might be like those delivered to the Tories by Labour, the ones buying aircraft carriers but no aircraft. I suspect that the contracts themselves may be air-tight, but in Scotland the authorities were acting almost exclusively under legal advice. If the legal advice was substandard, which from a lay-point it had to be, and wasn’t ignored, then the law firms or their insurers are on the hook.
Reports have already been leaking out about conflicts of interest in many of these contracts where the advising law firm also had ties with the business tendering for the work. That this happened under a Labour/Lib-Dem watch is not surprising, that they wished it continue past 2007 and actively campaigned for it is not surprising either, it is disgraceful.
If the Swinney/Salmond tag team of fiscal expertise can wrestle back some of these backroom deals that hurt the public purse, the financial snapshot looks dramatically better. If they find culpability and are able to terminate or re-work the majority of them they may find themselves in a very pleasant situation. Word has it that some underwriters are understandably nervous about this investigation/examination, and it hasn’t even started yet.
Finally, there’s reported consolidation afoot in public services, with a raft of investment planned in Scottish Water, hopefully removing the subsidy requirement of the organisation and in future running it in the black for the good of Scotland and her people, not for the ability of Scots to put their wealth into some potentially private offshore corporation.
Taking the above into account it appears that it will need a much smaller stellar alignment than last Thursday to produce the desired outcomes. Alex Salmond appears to have done his math reasonably well. At least he’s given himself, and Scotland, a fighting chance to see his election manifesto fulfilled, payback for Scotland giving him the opportunity.
The gradual fulfilment of those election pledges, coupled to enhanced powers and responsibility within Holyrood will only build the opportunity for a successful referendum result in time. With these levers in place the wily fox may not get independence in this Parliament, for that will be up to us ourselves, but he will leave the path open to a prouder, stronger, increasingly confident nation by 2016.
Westminster is fast realising that the Scottish fox has not been shot, rather he’s quite safe, and will often be found around Holyrood with some 68 of his friends.