What would a Labour win in May have meant for Scotland?


By Margaret Little

The SNP won a landslide victory in May but what would have happened if instead of Alex Salmond remaining First Minister it had been Iain Gray who triumphed?

Labour are governing Wales after the May elections to the Welsh Assembly.  The experiences of our Welsh cousins give an understanding of what could have happened to Scotland had Labour been elected here.

Preserving budgets against savage cuts is important to all governments in this time of austerity, so it may shock you to find out that Labour’s Welsh Government has agreed to pay back £73 million in housing revenue to the UK government.

This is the legacy of a scheme first introduced by Margaret Thatcher which changed the rules around council housing benefits.

Basically, any housing revenue received by each local authority was to be paid directly to the then Inland Revenue to cover housing benefit.  Any surplus paid in by the councils would be kept by the UK government, but councils who found themselves in deficit due to the amount of housing benefit paid out would not need to make up the difference.

Michael Forsyth was the Secretary of State for Scotland at the time and he was so appalled by this idea that he refused to sign the bill and it never became law in Scotland – Scotland of course having a separate bill to England and Wales.

When Labour came in to power in 1997, they took a little time to change this system but eventually after four years did so in part for England, but not for Wales.  Since the coalition came to power in 2010, the scheme has been brought to an end in England but because of a mix of UK and devolved legislation needed, the UK Government need some response from the Welsh government in order to phase out the scheme in Wales.

However, incredibly the Labour government in Wales have failed to act even though under this scheme £1 billion of Welsh money has been returned to Westminster since devolution, cash even the Tories have said should remain in Wales.

Indeed, an announcement by the Labour Welsh Minister for Housing, Regeneration and Heritage, stated that Wales was not disadvantaged by rule changes in England in 2001 even though since 2001, 21 of the 22 Welsh local authorities have made a net loss under the scheme.  It is a sobering thought that Michael Forsyth looked after Scotland better than Labour has looked after Wales.

One the criticisms that is often laid at the SNP door by Labour in Scotland is that when the SNP say that they will “Stand up for Scotland”, that implies that Labour would not.  However, during First Minister’s Questions in the Welsh Assembly on Tuesday 5th July 2011 when asked by Plaid Cymru’s Rhodri Glyn Thomas “During the election, you said that both you and your party would defend the people of Wales from the cuts made by the coalition Government in Westminster.  What exactly will you do to defend the people of Wales from those cuts?”, Carwyn Jones, the Labour First Minister of Wales replied “We said in our manifesto that we would stand up for the people of Wales and that we would ensure that we are in a position to do that. However, we cannot do that every time; that is clear.”

From Ed Miliband downwards, Labour has campaigned on the living wage.  Talking the talk seems to be one thing but implementing it is another.  In Wales, FM Carwyn Jones has said only that: “We will consider existing research and data on the living wage as part of the work that we are doing to promote the benefits of a living wage in Wales.”

The economy was a key issue in both Scotland and Wales and we know that the SNP Government has kept the Small Business Bonus Scheme.  Labour in Scotland also had that as a manifesto claim.

Similarly in Wales, there was a rates relief scheme during the last parliament (2007 – 2011) when Plaid Cymru was in coalition with Labour.  However now in the new parliament, when Labour set out their Programme For Government earlier this month, there is no mention of this scheme any more.  Indeed, although Small to Medium sized Enterprises (SMEs) make up the majority of Welsh business, SMEs don’t even make it into the main document at all and only get one mention in the 62 page annex.

Plaid Cymru Economy Spokesperson Alun Ffred Jones AM said:  “This vital central pillar of the Welsh economy seems to be completely ignored by Labour.  There is no commitment to continuing support for SMEs through the business rate relief scheme which was provided when Plaid was in government.

“It is Welsh SMEs that are currently suffering the brunt of the economic conditions as well as the effects of the UK government’s cuts.  That begs the question, why on earth is Labour ignoring their plight in their programme for government?”

With the SNP Government in Scotland working to grow Scotland’s economy and defend it from the deepest of Unionist cuts, it is important to remember the alternative that Labour are offering to the people of Wales.