Leader: Salmond still to answer the big question of cuts

Published on Wednesday 8 September 2010 17:10

Shorn of the flagship ambition to put an independence referendum bill before Holyrood, First Minister Alex Salmond's legislative list for the final session before the May 2011 elections cannot but invite the taunts of "slimline" and "ghost ship".

But in truth, the minority government faces a massive legislative headache securing the passage of its budget. This will dominate politics, because it will be without doubt the most disputatious budget in the history of devolution as the administration confronts the problem of public spending reduction.

Mr Salmond's new strategy is to use the storm over looming spending cuts as a central plank in his electoral argument next May for an independent Scotland. He could not resist the temptation yesterday to make capital out of adversity in Holyrood and the opposition to his referendum bill. In a characteristic rhetorical flourish, he declared that "if the arithmetic of this chamber denies the will of the people, then we shall take our case to the country." These lofty words could hardly be expected to rally the Holyrood MSPs. Does not the "arithmetic" of the chamber rather accurately reflect "the will of the people"?

The legislative programme contains plans to scrap the historic double jeopardy law which prevents people from being tried twice for the same offence, a change that reflects the increasing role of crime data technology in bringing new evidence to bear on cases long considered settled. And it sets out plans to allow Scottish Water to expand its business.

At first sight this seems hardly controversial. But it is what the administration has chosen not to do that is set to draw critical scrutiny. Mr Salmond went out of his way yesterday to rule out any change in the ownership of the state-owned utility, including a proposal, set out by Scottish Futures Trust, to reconstitute it as a "public interest company". Under this arrangement it would not be privatised and sold off to the private sector, but its ownership retained in the public sphere.

The benefits of this reconstitution, as noted in the Independent Budget Review, is that it would enable the utility to borrow directly from financial institutions, thus immediately freeing up some 148 million a year of Scottish Government funding, while offering the prospect of realising a very considerable lump sum as existing debt was taken off the government books.

Mr Salmond made clear, perhaps as a sop to the fundamentalist wing of the party disappointed over the dropping of the referendum bill, that it would remain firmly in the public sector.

Not spelled out, however, would be the steepening gradient of public spending cuts required as a result - heavier job losses in central and local government. Selling the consequences of this doctrinaire position will be one of many challenges Mr Salmond now faces.