Andrew Wilson: Trying to make sense of broken system

Deputy Scottish Labour leader Kezia Dugdale. Picture: Lisa Ferguson

Deputy Scottish Labour leader Kezia Dugdale. Picture: Lisa Ferguson

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THINGS are unsustainable, therefore they must stay the same. I have led us into this mess, therefore I must stay in charge. Your performance within my structure and under my leadership is so poor you mustn’t dream of changing it. Scotland 2015. In fact Scotland any year for the last 40.

Two weeks ago Labour leader Ed Miliband warned Scotland that the Tories would cut £3 billion from the Scottish budget if they were re-elected: guaranteed, baked-in cuts coming your way.

The following week Scottish Labour’s deputy leader, Kezia Dugdale, warned Scotland that, effectively, these Tory led cuts were preferable to home rule and the devolution of financial control to Holyrood.

This coming week at the Budget we will find out what the current outlook is for eradicating the UK deficit, which both Labour and the Tories are pledged to do, just at a slightly different pace.

In the Autumn Statement the gap between spending and taxation income sat at £64 billion for this year and was forecast to disappear sometime in 2017. The government makes good that difference by borrowing and adding to the ballooning national debt, albeit at low rates of interest.

As far as I could follow her logic, Kezia Dugdale argued that because Scotland’s gap between taxation and spending (in 2013/14) was more than £4 billion higher than what it would have been if it was exactly in line with the UK deficit proportionately, this would lead to 140,000 job losses because it would need to be cut if Scotland took control of its own finances.

Hard to understand why she argues that Ed Balls handling a higher deficit than the Tories in the UK is a good thing while Scotland doing it would be a bad thing. Presumably getting rid of the £64bn deficit, as Labour are pledged to, will lead to 2.24 million job cuts. Do the maths; that’s the logic of Dugdale’s Scottish position.

Hard to understand why Scotland would apparently be unable to borrow like every other country and would therefore need to axe jobs overnight. Hard to understand why growing the economy and the tax base is not a better route to sustainable finances. But no, it’s a zero sum game and she’s not playing.

Better, she argues, to have the current Barnett formula arrangement calculate Scotland’s budget solely on the basis that whatever changes happen in England should happen here. This means locking Scotland into the same Tory budget plans that Ed Miliband told us to fear two weeks ago is always better than taking responsibility for ourselves.

Head hurting? Mine is.

The annual Scottish numbers fest is never an edifying sight and serves only to underline what a juvenile political culture and discourse Scotland currently has, at least when it comes to understanding the sustainability of public finances.

Even otherwise informed and intelligent commentators indulge in the doublethink involved in framing the Scottish budget debate. It is, and always has been, nonsensical.

The logic goes something like this: as part of the current arrangements in the UK, Scotland’s finances are unsustainable and the gap between revenue and spending so large we must carry on exactly as we are now.

I can think of no other country on the planet where an unsustainable deficit is used by the government parties as a reason that things should stay the same and they should stay in charge. The deficit is a symptom of the structure of the economy. The overall UK debt and deficit is colossal so you would expect the situation in the each of the UK regions to be roughly similar.

Every region outside of the south-east runs a worse budget deficit than the UK average, by definition. Scotland’s is the least bad. It’s the model that’s broke and the idea that staying on the metaphorical methadone is the best the UK regions and nations can hope for is absurd.

It locks the regions into waiting for whatever scraps fall from the table and it is no way to run a country. Within the UK a more transparent means of balancing budgets and performance over time is needed. Transparent cohesion funding would be fairer and inform a more serious debate about the state of the UK ­economy.

The doublethink of threatening cuts one week from one source and another the next takes the Scottish electorate for fools. When did Labour learn to regard home rule as a reckless risk compared to the reality of government by the Tories we never elected.

Labour appears to have stopped thinking sometime in the 1980s. That is their prerogative. But Scotland needs a grown up political class that recognises its responsibilities to the future and that takes its credit rating and economic sustainability seriously. If we think that politics is about sitting in the nest with our mouths open waiting for mum and dad to arrive with food we are in for a shock. «

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