1 week Ago By Brian Monteith
If UK Chancellor Rachel Reeves believes she has problems from her claim of a looming black hole in the UK public finances, then the difficulties facing the SNP’s Finance Secretary, Shona Robison , are real and on steroids. Everybody can see that Rachel Reeves is trying it on. Starmer’s Labour always wanted to increase taxes – it was hidden in plain sight – but could be discovered if you looked up what Labour think tanks were saying since Starmer became leader.
Many of the people who ran those thinktanks and tweeted their demands for higher taxes are now either Labour MPs or ministerial advisors following the general election. Now in power, suddenly Starmer, Reeves & Co have “discovered” a black hole of which their own newly announced spending commitments on public sector pay, African Net Zero subsidies and unfunded commitments amount to the lion’s share of the alleged funding gap. Yet even if we accept the gap is real and not a confection designed to justify punitive taxes, £22bn amounts to 1.
8 per cent of the UK Government’s estimated spending for 2024/25 of £1,226 billion. It is not a catastrophe, it is manageable. Compare that to the funding gap faced by Shona Robison at the Scottish Parliament.
The total resource spending under her purview is £44.3 billion – but suddenly a funding gap has appeared this year in the region of half a billion, representing 1.12 per cent of the total.
Again it is a problem, and as a balanced budget is required it has to be addressed, but it should be manageable. I suspect it will not pass the attention of Scottish electors that both Reeves and Robison are both seeking to blame others for the woes they face. In Reeves’ case it was the Tories wot did it and in Robison’s it’s Westminster’s fault.
Neither one of them has the candour to admit being the major, if not complete, cause of their predicament. The political difficulty for Shona Robison is that Labour has just come into power while the SNP looks to be heading out of power. Reeves can look forwards for the next five years after Labour stood on a ticket of “change”.
While it might have been hard to pin down what that change really meant and what it would cost, most definitely the times are a-changin, as we shall certainly find out after Reeves’s Halloween Budget. In contrast, Swinney, Robison & Co. stood on their own ticket of change, it was called “independence” and it was resoundingly rejected with the SNP’s worst result in a generation.
Now, faced with having to make-up her own looming funding gap Robison can only look at all the policies they have introduced in the last seventeen years, not new ones electorally endorsed. Of course Robison can blame Brexit, Covid, the Ukraine war, inflation and Westminster decisions, but her Pavlovian barks will be lost in the thunderous storm of her own making. Brexit changes were costed-in to budgets from 2021; the Covid pandemic was more than adequately funded by Westminster but the SNP chose to spend the funds differently; the invasion of Ukraine actually made Scotland’s energy resources more valuable – but the SNP tried to leave it in the ground and forego the tax revenues; and when it comes to Westminster decisions the Scottish Parliament’s own independent researchers showed the funds made available from the UK Treasury actually increased by 0.
9 per cent more than inflation. An above inflation increase is not austerity, so why the 1.12 per cent funding gap? The reality is the costs of 17 years of SNP free stuff are eventually coming back to bite them.
Holyrood votes to do things differently from Westminster, hosing generous British taxpayers’ money from the block grant over favourite SNP (and Green) vote-winning schemes that don’t exist in England. It sets most of the taxes it controls higher in the hope it will bring greater tax revenues, but Scottish taxpayers change their behaviour to avoid such burdens, either not selling houses or moving to England. It also redirects funds away from local authorities and centralises institutions but that often drives costs up.
The hard fact is, as the Scottish Government’s independent Fiscal Commission and the Scottish Parliament researchers have both laid out before – decisions have consequences and the SNP have had seventeen years of bad decisions they cannot bring themselves to admit to and reverse. Now it is being forced upon them by the need to achieve a balanced budget and in December it will really be visible when Shona Robison has to deliver her Budget for next year. The free Tuition Fees are preventing ambitious and talented Scottish school-leavers from finding places in our universities – as the “free tuition” comes at a price of nearly 1300 fewer places.
The free bus passes for people under 22 costs £100m a year and has become a source of antisocial behaviour. Then there are scandals like ferries that are £250m over budget and five years late. The largest cost, however, is the SNP’s big ticket of trying to deliver independence.
Robison is not trying to save money by halting the tens of millions the SNP commits to that. I can only conclude that as the “being different” bill rises so the SNP austerity must cut deeper. When she sits down from revealing her cold Winter budget in December the leaders of the opposition parties must reject it out of hand and call for an early election so real changes in spending priorities can be made.
The SNP has refused to listen to the Scottish people and deliver the priorities they wanted – a government doing the day job rather than campaigning for the SNP’s unwanted ambition of independence. Only a new administration will deliver change, for the SNP has run out of ideas just as it is running out of support. Brian Monteith is a former member of the Scottish and European parliaments and senior advisor to the Tax reform Council.
.
