Swinney: “Staying in the Union means continuing cuts to public spending”

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  By a Newsnet reporter

Scotland’s Finance Secretary John Swinney has today (Sunday) set out the choice now facing Scotland following Labour’s decision to reject the social wage and the benefits devolution has delivered for the people of Scotland.  Mr Swinney said that the people of Scotland have been left with a clear choice between a Labour party “who are willing to sacrifice the benefits of devolution” or the opportunity of independence to use Scotland’s own resources to support Scotland’s own priorities.

Mr Swinney argued that since 2007 the Scottish Government has worked to maintain public services despite cuts to the Scottish block grant caused by Labour and Conservative economic decisions made in Westminster.  

However current Labour leader Johann Lamont recently reversed this policy.  In a speech which stunned Labour supporters and opponents alike, and using language more commonly associated with the Conservative party, Ms Lamont argued that Scotland could no longer afford universal benefits, which she characterised as a “something for nothing” culture.  

UK Labour leader Ed Miliband backed Ms Lamont’s change in policy direction, in what observers saw as an attempt to redefine Labour’s image amongst Conservative leaning voters in England.

Mr Swinney accused Holyrood Labour leader Johann Lamont of tearing up promises made by Labour, and turning the party’s back on the traditional values of mutuality and co-operation once promoted by Labour.  Many of the policies which Ms Lamont now argues against were first introduced under Labour, which until Ms Lamont’s U-turn had given them wholehearted support.  

Just last year, then Labour leader Iain Gray committed his party to protecting universal benefits and services, telling MSPs in Holyrood’s debating chamber:

“I agree that Scotland’s path should be different from that pursued by the Tory-Lib Dem coalition in Westminster.  There is a fairer, better way, and we will hold the First Minister to his promises on the social wage, as he has characterised it: on free personal care, concessionary travel, free prescriptions and free education.”

Ms Lamont’s speech was roundly condemned by many traditional Labour supporters.  Deputy General Secretary of the Scottish TUC Dave Moxham said Labour’s policy U-turn “came as something of a surprise, to put it mildly”, and described to Ms Lamont’s new policy as an “extreme position”.  

However Mr Swinney today released figures showing that the “social wage”, the bundle of universal benefits which Ms Lamont insists is unaffordable, accounts for just 3.5% of Scottish Government spending.  

Mr Swinney says that Labour’s so-called “Cuts Commission” looks set to hit hundreds of thousands of Scots financially, yet will still not make any significant reductions to overall government expenditure.  He noted that before the abolition of prescription charges around 600,000 adults living in families with an annual income as little as £16,000 were liable to pay prescription charges.  

Influential voices in the voluntary sector and academia argue that the universal benefits actually reduce overall government expenditure, and they result in savings in other areas.  

Research published by Professor David Bell of Stirling University in 2010 showed that since the Scottish Government’s policy of free personal care was introduced in 2002-3, the number of long-stay geriatric beds in Scottish hospitals have been reduced from over 2,700 to about 1,700.  This represents a bigger cost saving to the NHS than the extra cost of personal care.  

Speaking to BBC Radio Scotland after Ms Lamont’s policy reversal, Lindsay Scott of Age Concern argued for the maintenance of universal benefits, saying that they were beneficial to society as a whole.  Mr Scott said:

“Some of the policies that have been put on the table here we think are very beneficial to society as a whole.  I’m thinking of things like the bus pass, like free personal care, which we class as being a preventative spend.  They are costly, but they’re saving money in the long term.”

Instead of Labour’s focus on universal benefits, Mr Swinney argues that the SNP Government’s policy of efficiency savings and a rejection of the PFI schemes introduced by the previous Labour administration have produced annual savings of 3%, close the the sum spent on the entire social wage.

Mr Swinney also noted that Arthur Midwinter, who is heading the Labour review of universal benefits, had stated in 2007 that “No British government has delivered 1% per annum efficiency savings over a sustained period.”  

The Scottish Government exceeded its efficiency targets in each year of the last spending review, has achieved 3% per year since then and has a 3% target in this spending review (above that recommended by the Independent Budget Review), which the SNP argues helps Scotland to  counteract UK cuts by delivering better government.

Mr Swinney also released figures showing that the cost of repayments due to PFI schemes entered into by Labour while in office have increased from £516m in 2007-08 to £963m in 2012-13.  In contrast the SNP Government has followed the recommendations of the IBR and placed the Scottish Futures Trust at the heart of the Scottish Government’s capital programme – delivering £371m of benefits and savings so far.  

Mr Swinney said:

“The people of Scotland now face a clear choice between a Labour Party who are willing to sacrifice the benefits of devolution in their support for the Union or grasping the opportunity of independence to put our own resources to use to support Scotland’s priorities.

“At a time when Scotland contributes more to the UK’s finances than comes back to us it is ridiculous that opposition parties can think only of cutting valuable benefits to the people of Scotland instead of protecting them, and having the responsibility to control our finances ourselves.

“With only 8.4% of the UK population Scotland contributes 9.6% of UK revenues, yet only 9.3% is returned, with more cuts ahead.

“The social wage, introduced not just by the SNP but by all parties in the Parliament, is a benefit of devolution and one that we are proud to support. It is part of our agreement with the people of Scotland and one that we have fully funded every year since 2007.

“Labour may have buried their heads in the sand when first Alastair Darling and then George Osborne cut Scotland’s budget but the SNP first raised our concerns in 2009 and have long since faced up to the implications of these cuts. That’s why as well as reforming public services, increasing efficiency and focussing on getting results, not simply on how much something costs, we are offering the people of Scotland a real alternative with a referendum on independence.

“It may be hard for Labour to accept that staying in the union means continuing cuts to public spending, but to sacrifice the social wage is something they should be ashamed of.

“The real debate is not the false one of deciding how to divide up a slice of cake from the UK Government, but how we can ensure that we can do the best for Scotland with the opportunity of independence.”