John McTernan: Phoney war will soon be over

Nicola Sturgeon has very tough challenges to face despite her rhetoric. Picture: Greg Macvean
Nicola Sturgeon has very tough challenges to face despite her rhetoric. Picture: Greg Macvean
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The new leaders of the SNP and Scottish Labour must be ready to face up to the harsh economic realities, of austerity in the UK writes John McTernan

SCOTTISH politics is in the midst of a phoney war at the moment. In a way, it’s not surprising. After the length and the intensity of the referendum campaign, it was always to be expected that it would take a while to return to politics as usual. And so it has proved. In addition, the two main political parties have seen their leaders resign. That has led to an interesting similarity between the SNP and the Scottish Labour Party – and some illuminating differences.

The similarity is quickly dealt with. That can be summed up in the mawkish way in which both Nicola Sturgeon and Neil Findlay talk about Scotland as if it is a uniquely progressive country. The truth is that views in Scotland are no more left-wing than in the rest of the UK – not least on welfare, immigration or defence. (Issues that are thankfully – for Holyrood politicians – reserved, and therefore easy to posture over.) Scottish elections – as in the rest of the country – are won from the centre: the place where the mainstream middle sit.

The difference is more telling. Labour is having an election, the SNP a coronation. This is important because a contest reveals. Nicola has had no chance to differentiate herself and her policies from Alex Salmond.

Instead we have just had her talking about the most obvious difference between them. A none- too-subtle acknowledgement that Alex had a “problem” with women voters.

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As for the important stuff, we are none the wiser. What are Nicola’s views on housing, given that we have the lowest number of house starts since the late 40s? How does she think that we should regenerate our towns so that they can match the growth and success of our great cities? What is to be done about the appalling education offered to most working-class kids by the SNP government? When is the redistribution to higher rate taxpayers going to stop? We have no idea because no-one has forced Nicola to answer. All we have to go on are the democratic mandates she has signed up to – the SNP 2011 manifesto and the commitment to respect the verdict of the once-in-a-generation referendum (though she is trying to crab-walk away from the latter).

Labour’s contest will be revealing in two ways. First, at its core it is – in Jim Murphy’s words – “not just about making Scottish Labour electable, but also about making Scottish Labour worth electing”.

To any democrat, that is a worthy aim – a country without genuine electoral competition is one where a government can get lazy and sloppy. To any Scottish social democrat, it should be music to their ears.

The leadership election is, of course, about the 4Ps. Policy, personality and positioning are crucial but purpose is fundamental. Without that, any party struggles. Scottish Labour is heading to choose the modern politics of the centre-left as exemplified by Jim Murphy. He has the overwhelming backing of the two important nominating groups: his peer group – elected MPs, MSPs and MEPs – and the local activists. Only the unrepresentative and gerrymandered union section – revived for the last time in Labour politics – has gone against him. A badge of honour in many ways.

But there is a gap in the political discussion because this is a true phoney war going on. There are some pretty big challenges out there. Starting with the one that the entire Yes campaign was defined against – austerity. For most of the past year, the laws of economic gravity have been defied – rhetorically at least – by the SNP. And the other parties have failed to challenge them. The UK’s debt, at 80 per cent of GDP, is too large; it has to be reduced.

Interest payments on the debt are massive and interest rates remain at a historic low. Every rise in rates, which will come, merely increases the burden, at the cost of other vital areas of spend. Don’t get me wrong. The Great Recession demanded a Keynesian expansion of spending and a growing debt and deficit; that is how the world avoided another Great Depression. But a consolidation is needed. Anyone who says otherwise is lying or living in a fantasy land.

There is no easy way out of reducing spending, for example, through faster growth. The Tories crashed the economy, but even they couldn’t stop it rebounding. But growth has not been matched by increasing tax revenues. There are many reasons among low wages, tax avoidance, some elaborate corporate tax scams, but no easy answers. There may well be no return to the buoyant and rising tax revenues of the decade before the crash. The global economy makes growth no easier. Japan, still the third-largest economy in the world, has fallen into recession. The eurozone is flatlining. Chinese growth is falling off.

One can, of course, wryly observe that David Cameron blames the last global recession on Gordon Brown but argues any coming UK recession is entirely made abroad. But while that gives one a self-satisfied inner glow, it does nothing to answer the question – where is Scottish and British growth going to come from when our largest market, the EU, isn’t growing?

When the phoney war is over, we will have to discuss these questions and politics will return with a vengeance. All the difficult challenges will be back on the agenda. It’s right to give the lowest paid a pay rise through a living wage, but for Scotland to get a pay rise we need not just growth but rising productivity.

How best to do that? An ageing population needs more support from health and social services and they’ve earned it. But where does the cash come from? The single transferable answer of oil doesn’t wash any more in a world where the US government predict $85 a barrel next year.

Shortly, the SNP and Labour will confront the uncomfortable reality that to govern is to choose.

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