Dave Watson on Scottish Labour’s break with austerity
Dave Watson sees a long haul for Labour
The Holyrood election debate was looking pretty boring, but in February Scottish Labour suddenly made it interesting. Kezia Dugdale, Labour’s new leader, took a bold move to break away from austerity economics. She proposes increasing the Scottish Rate of Income Tax (SRIT) by 1p. This will raise around £480m, less a £50m rebate to ensure that low paid workers under £20,000 per year don’t lose out. These are the Calman Commission powers agreed some years ago and not the more radical Smith Commission devolution of all income tax that will probably be implemented in 2017.
The current opinion polls are not encouraging for those on the left in Scotland. Scottish Labour’s best polling would deliver 33 seats (down four from 2011), all from the list. The Scottish Greens have been stuck at a level that is unlikely to deliver big gains. The far left have attempted a degree of unity under the label RISE, although predictably a number of groups have remained outside the tent. And we shouldn’t forget the Tories. Their vote has remained steady and they are trying a new pitch to referendum NO voters, as the only party that will seriously defend the union.
In many ways the SNP are following a New Labour political strategy – warm words and some limited actions on social justice, but don’t frighten the voting middle classes. Labour’s policy shift is exposing the SNP’s anti-austerity rhetoric
The legacy of the referendum and the disastrous Better Together campaign remains, with many voters unwilling to listen to what Labour has to say. Labour can’t win in Scotland when only 4% who voted YES in last year’s referendum appears willing to contemplate voting for the party. Despite the polls, Scottish Labour as a party is stronger than it has been for years. Membership has doubled and freed from the influence of Westminster MPs, it has a new focus on the Scottish Parliament. Kezia Dugdale has been innovative and inclusive and leads a party that is more united than it has been for a generation. The strength of the SNP in government has been its mastery of process. The soothing left of centre rhetoric plays well even when actual delivery is more limited. Difficult issues are pushed into reviews and consultations, all to build the biggest tent possible for the next referendum. If all else fails, it’s wicked Westminster’s fault and Cameron usually obliges by playing the traditional panto Tory role. So far this SNP strategy is working pretty well. The Budget Bill can be a pressure point for the strategy, but the steady Finance Secretary, John Swinney is adept at hiding the pain. If a service has to be cut disproportionately one year, then he puts a bit extra back the following year. And of course any difficult decisions are the fault of Tory austerity.
Local government is usually hit hardest, not least because councils can be shot as the messenger of difficult decisions, far removed from ministers, and still largely led by Labour. However, this year John Swinney went much further with a cash cut of 3.5% or £350m in 2016-17 – that’s 5.2% or £500m in real terms. This has resulted in a fraught dialogue between CoSLA* and the Scottish Government over the grant allocation. Not helped by John Swinney’s draconian penalties for any council daring to consider an increase in the Council Tax. CoSLA voted to reject the package and, at least privately, even SNP councils are deeply unhappy. Labour councillors are not normally political animals, rather passive administrators more comfortable with managerialism than political rhetoric. However, this budget has seen political motions and even demonstrations outside parliament.
The problem with an austerity budget is that unless you expand the spending envelope, the debate simply deteriorates into robbing Peter to pay Paul. Nicola Sturgeon knows this and has sneered at the Labour benches asking which services they would cut. Labour’s new plan means that Scotland is starting to have a serious debate about tax. It also positions Labour as the anti-austerity party and the SNP where they have in reality always been, as a social democratic party. In many ways the SNP are following a New Labour political strategy – warm words and some limited actions on social justice, but don’t frighten the voting middle classes. Labour’s policy shift is exposing the SNP’s anti-austerity rhetoric. Standing ‘shoulder to shoulder’ with the Tories is an uncomfortable position for those SNP members who regard themselves as being on the left of politics. Will any of this make a big difference to the outcome of the Scottish Parliament elections? Possibly not. Scottish Labour’s political problems are deep seated and it will take time to turn around. This is a longer term project, but action on tax positions the party where it should be in Scotland – firmly on the left.
CoSLA* – Scottish Local Government Association