It’s now SNP austerity we have to worry about - Murdo Fraser

The catchphrase “Tory austerity” sustained the SNP and the independence movement for a decade after the Conservative-Liberal Democrat coalition government decided that reductions in public spending were necessary to bring public finances back into balance following the banking crisis of 2008-09.

First Alex Salmond, and then Nicola Sturgeon, as SNP leaders, railed against cuts to public spending and job losses in the public sector.

Now, more than a decade on, we face SNP cuts not to balance the books after a global banking crisis, or even a pandemic. We have cuts to balance the books after the SNP got their sums wrong. By billions.

We have a UK Conservative government actively increasing the size of the State and overseeing substantial increases in public spending. In contrast, it is the SNP Government here in Scotland that is introducing a new strain of austerity, and one which will put into the shade anything we have seen from Westminster in recent times.

All this was made clear in the statement to Parliament last week by the Finance Secretary Kate Forbes as she set out the Scottish Government’s Medium-Term Financial Strategy (MTFS). It came just days after the Institute for Fiscal Studies warned of a £3.5 billion black hole in public finances – one that could only be filled by additional Westminster money, by increasing taxes, or by cutting spending. We now know that both higher taxes, and spending cutbacks, are to be a feature of the SNP’s plans for the coming four years.

One thing we can be clear about is that the SNP cannot blame Westminster for the situation it has now found itself in. The Finance Secretary conceded that the Scottish Government’s budget is today around £7 billion higher than was being predicted back in 2018 at the time of the last MTFS delivered to parliament by her predecessor, Derek McKay. This is a Scottish Government that has much more money than it was previously expecting, thanks to increases from Westminster.

And yet, we see SNP politicians from the First Minister down trying to spin this as a 5.2% cut in its budget. As my fellow columnist on this paper, Brian Wilson, pointed out on Saturday, this is a deeply dishonest presentation – for these figures can only be arrived at by including extraordinary one-off Covid support available in the last financial year, and using that as a baseline. That the SNP are having to resort to this tactic just shows how desperate they have become.

Glasgow City Chambers , the home of Glasgow City Council, one of Scotland's largest employers. Local councils are expected to be badly hit in a wave of SNP austerity, writes Murdo Fraser.

The simple fact is that, despite substantial extra funding from Westminster, the SNP have been planning to spend more than they have coming in. Some of this gap will have to be filled by increasing taxes, with more and more middle earners being sucked into paying the higher rate of 41%. But, as the IFS has confirmed, the SNP’s tax changes hitting middle earners have actually delivered £200 million less in revenues than would have been received under the old system pre-fiscal devolution.

The real savings will have to come in terms of public spending, and this is what was spelled out by the Finance Secretary last week. Whole swathes of departments, including justice, education, universities, and local government, will see real terms cuts of 8% over the next four years. For enterprise, trade promotion and tourism, the outlook is even more grim, with projected cuts of 16%. Some of the axe falls in the very areas where we would expect to see investment to deliver a faster growing economy, such as the universities, tourism or on trade – and yet these will see the biggest reductions in spending.

It has been estimated that up to 40,000 jobs will be lost under the spending review, although Ministers are claiming there will be no compulsory redundancies. There have even been suggestions that public sector workers could move to a four-day week, with a commensurate cut in salary. Little wonder that there has been a furious reaction from trade unions, with UNISON threatening strike action if the Scottish Government does not rethink its plans.

Local councils will be among the hardest hit, with vital services such as bin collections and libraries under more pressure than ever before. It should not surprise us that the SNP Government waited until after the local elections were over before announcing these plans, or they might have seen a somewhat different outcome if the voters had had an opportunity to see what was in store.

Whilst all these cuts are coming down the track, there is never any shortage of money for the SNP’s pet projects. And so we see £20 million being ringfenced for an independence referendum in 2023, despite everyone knowing that that is simply not going to happen. It does, however, tell us all we need to know about the priorities of this government that it would rather divert precious resources to another divisive, and unwanted, referendum, than to supporting our courts, our universities or our local councils.

Scotland undoubtedly needs a different approach. There needs to be a renewed focus on growing the economy, at least in line with the UK average, to increase tax revenues to fund local services that are so important. There needs to be a better understanding that unless our private sector businesses thrive, then our economy won’t progress. The productivity puzzle needs a laser-like focus. And there needs to be constitutional stability, not the endless threat of another referendum hanging in the air.

The horrendous situation that Scotland’s public finances now face is not the fault of Westminster; it is entirely down to choices made by the SNP. For years, their leaders railed against Tory austerity. Now we have a made-in-Scotland SNP austerity, and there is simply no one else to blame.

-Murdo Fraser is the Conservative MSP for Mid Scotland and Fife