Tuesday, 19 February 2008

Tartan Tories

A great article by Hamish Macdonnell in today's Scotsman led me to ponder both the sentiments he expressed and the argument itself.

First things first - the argument that the SNP's budget only passed because the Tories supported it is wrong. Well... it's maybe partly right. It passed with the votes of the SNP and the Tories to a single vote against it (an error/principled stance by Cathie Craigie depending who you believe). Because Labour & the Lib Dems didn't want to come to the party and discuss potential amendments to the budget - and ultimately abstained - the Tories were the only ones who wanted to play ball. And in the spirit of consensus government, the SNP reached out to the Tories and listened to what they had to say. Or something like that.

The point is, the budget could have passed without Tory support - given Lab & Lib Dems indecision & inaction.

So, I'll dispute his starting point. But perhaps not the rest of it.

His points about the freeze in the council tax and tax cuts for small businesses being centre-right (as opposed to the SNP's centre-left doctrine) policies is accurate. They help small businesses and middle income families - at best they leave low income groups at the same place they were when the SNP took over. No major improvement, but equally no worse off.

Now the SNP remains a centre-left party in terms of its social policy, its opposition to nuclear weapons & power and its strong anti-war platform. But these shifts to the right on economic issues are not only a pragmatic political position to take in 2008 Scotland, they are the right policies to take Scotland forward.

I'd imagine I'd be in the minority in the party that would argue this case. But I am a profound believer in small government, in the power of the market - and in a smaller public service. This probably sounds like turkeys voting for Christmas, but let me explain.

The council tax freeze is a great example. It's gives a confidence boost to everyone who pays it when they don't see their bills rise. It gives them the confidence to go and spend some more of that on goods, stimulating the economy. If that gets a boost (so the argument would go) inflation would decrease, as would unemployment, meaning less people needing to claim benefits, meaning less need for public money - meaning a cut in income tax - and so the process continues.

Now I know thats fine in theory. And the reality is that with a freeze in the council tax some things will miss out on funding. But that is the reality of government in this country. Difficult decisions have to be made. Do councils wish they had enough to fund everything? Yes. Can they? No. I'm not arguing that councils should cut vital services - things like health & education are essential to society - but secondary services (like a swimming pool in Aberdeen which the council subsidises £11 every time someone uses) should be at the very least cut back.

And I think that puts the country in a better position, when we're not expecting our councillors to work miracles with a small amount of money and we're trusted to spend the money in a way we see fit.

I know this is not the most articulate argument in the world, but I'll bet there's no shortage of criticism of it - let me know what you think.


Sam 19 February 2008 at 21:54  

You seem (to me) to be making two arguments Malc, concerning the economic consequences of the Budget, and the political reasons for it.

Firstly, I would dispute your argument on the council tax freeze. As you say the freeze gives people the perception of having more disposable income, which then gets spent & so stimulates the economy. But if that then increases employment, or more likely when combined with small-business tax cuts, increases middle class incomes while barely affecting working class's, more money would indeed be generated through income tax, but that would actually have to go towards balancing the reduction in business taxes & council taxes.

The current economic climate doesnt seem likely to produce such economic growth that the benefit bill decreases & the income tax bill increases enough to allow the SNP to make income tax cuts in the near future.

Actually this is not such an important point, but I'm watching Liverpool draw pathetically with Inter so an economics debate is comparatively interesting!

In fact, I agree with your political argument that slightly "right" economic policies are the best idea for Scotland. I just think your economic analysis is optimistic.

But really, I would have expected you to blame Westminster more for not having enough money. After all, the Budget would have had room for election pledges like £2000 for first-time home buyers & debt write-offs for students, if the Treasury had given Salmond as much money as he wanted. Why not attack them for that? Salmond seems happy to attack them on everything else.

I would suggest that's because of his independence agenda. Everything he does seems to be aimed at rabble-rousing. He had the votes to pass the budget without the Tories as you said Malc, and some very small amendments (500 extra police & business tax cuts 1 year ealier) guaranteed those Tory votes anyway. But then he goes and threatens to resign if it doesnt pass. Why? He knew it was an empty dramatic gesture & he wouldn't have done it if he thought he would have to resign. But it was a way of making Labour look like they were the ones being difficult & obstructionist, and it was designed to make him look like an effective & brave leader. So he does his amateur dramatics, makes the Tories look more important than they needed to, and gets a few more headlines. Is that really better than aiming to look like simply an effective leader?

Sam 19 February 2008 at 22:30  

Hmmm I realise that ended in a bit of an off-topic rant! Sorry, but Liverpool just came back & won 2-0 so I'm all annoyed!

Just to reply more to what you and Hamish Macdonell were really talking about, it seems like you are arguing over the political identity of the SNP. I guess any party which comes into government for the first time is going to have that debate. Do you stick solely to your founding principles ahead of everything, do you stick to what worked in opposition which is really just the opposite of governing, or do you just try and cling to power?

Its especially hard to find an identity given that the SNP was almost a single-issue party until it got down to the hard reality of having to govern.

Ok this is still a little like a rant. But Chelsea had an easy away draw so I'm still annoyed.

But my point is that like virtually every other left-wing party in the Western world in recent decades, the SNP has discovered that it has to move to the right to keep in line with global economic trends & popular opinion. In the case of Scotland, you need economic growth from tax cuts to create jobs, and you need to steal Tory voters to keep the SNP in power. Well it worked for New Labour.

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