Budget analysis: Big question is: Why did the Lib Dems change their tune?

Published on Thursday 29 January 2009 21:01

THERE was only one question being asked in the corridors of Holyrood yesterday – why on earth had the Liberal Democrats done it?

Why had the party, which had adhered to its principle of a 2p cut in income tax throughout the process, suddenly thrown it all away to offer the SNP its support in getting the Budget through? In short, why had it ditched its principles?

One opposition MSP offered a succinct response: "Because they are Liberal Democrats: it's what they do."

That may be a slightly unkind view of the Liberal Democrat position, but it is easy to see why some MSPs might jump to the same conclusion, as it is difficult to pinpoint concrete reasons for the switch.

Senior Liberal Democrats explained their change of heart by arguing they had put forward their proposals for a cut in income tax, and the parliament had rejected that idea so they were now moving on.

They also claimed that what they wanted was a major change in the way the Scottish Government coped with the recession and that was more important than the principle of the 2p cut.

However, that does not really stack up. If it was really the case, the Liberal Democrats would have backed down on their 2p income tax cut after it was clear it commanded no support in parliament, maybe even as early as after the initial stage-one vote on the Budget.

But they did not; they carried right through and caused the defeat of the Budget bill on Wednesday night purely on a point of principle, even though they knew the parliament did not support their tax plans.

What seems to have happened here is that the defeat of the Budget, and the last-minute concessions which the two Green MSPs were able to wrest from the Scottish Government, showed that there was more to be gained from being conciliatory than there was in being oppositionist.

The Liberal Democrats had three aims: influence over the Budget; have something concrete to parade as an achievement; and to distance themselves from Labour.

By co-operating with the SNP, they were preparing to achieve all three. That explains the extraordinarily weak central part of their demands. It is understood that the Liberal Democrats want Alex Salmond to write to both the UK government and the Calman Commission, asking for borrowing powers. As this is something Mr Salmond wants to secure for Scotland, it should not be a problem.

The only little bit of politics here is that the Scottish Government has been dismissive of the Calman Commission and, by writing and submitting evidence on borrowing powers, Mr Salmond will be giving the commission a legitimacy he never wanted to bestow upon it.

But if that is all he has to do, he may as well accept the Liberal Democrat demands, be glad they are so straight- forward, and get his Budget approved.