Leaders: Counting cost of government giveaways

ACCORDING to the old adage, there is no such thing as a free lunch. In recent years, however, the Scottish Government has done its best to persuade voters this is not, in fact, the case.

A range of 'free' services  including prescriptions, eye tests, university tuition and bus travel for the elderly have been offered to Scots. Picture: Getty

A range of “free” services – including prescriptions, eye tests, university tuition, bus travel for the elderly and personal nursing care – have been offered to Scots as the fruits of devolution. So has a freeze on council tax. These policies have been very popular, and those proposed by the SNP have been instrumental in handing the party its two election victories at Holyrood. What has gone relatively unnoticed – due in no small part to the ineptitude of the Scottish Labour opposition – has been the inconvenient fact that these benefits and subsidies are not free at all. The old adage is true: somebody, somewhere has to pay for that supposedly free lunch. According to Professor Arthur Midwinter, a leading expert in public finance who has been commissioned by Labour to examine these issues, the price has been paid in a range of devastating cuts to local authority services. This has manifested itself in closed schools, shut libraries, sacked council workers, and serious damage to the frontline services that councils provide to the poorest and most vulnerable.

There are some curious aspects to the giveaways provided by the Scottish Government. Free bus travel for the elderly is, not, as one might imagine, just available to OAPs. It kicks in once someone reaches the age of 60. Most people at this age still have at least five years to go until retirement, and they are still receiving a wage or salary. Why should the state be paying their bus fares?

The council tax freeze is another puzzling policy for anyone seeking to maximise the potential for assisting those most in need. Of course, everyone is feeling the pinch in these difficult times. But the council tax freeze does not recognise if you are rich or poor. It saves a Band A household £60 a year (0.3 per cent of its net household income), and saves a Band H household £370 (0.8 per cent). Is this really a cost-effective way to help those struggling the most in austerity Britain? Or is it, to be blunt, a nice tax break for the comfortably well off?

Another curiosity is the way the SNP has managed to present this package of policies as proof it is more left-wing than Labour. Quite how this can be the case when the effect is a massive subsidy for the comfortably-off is one of the most baffling aspects of contemporary Scottish politics. The poorest Scots have been unaffected, as they have always received these services for free, and received help with their council tax.

As our columnist Euan McColm points out today, Labour is on tricky ground here. The party made great play in last week’s Dunfermline by-election of its backing for many of these “freebies”. What, then, of the “something for nothing” culture criticised by Scottish Labour leader Johann Lamont in a landmark speech a year ago? Labour, with Midwinter’s help, seems to be edging towards a compromise. Labour will not scrap these benefits and subsidies – instead it will suggest a range of ways of restricting access to them. The problem, of course, is that once you restrict access to universal services they cease to be universal. This will not go unnoticed by the voters, nor by Labour’s opponents. How mercenary are the Scottish voters? Are they willing to give up freebies so more money can be targeted on the needy? Are they willing to pay higher taxes to protect universal services? We are about to find out.

Minister out of order

Alistair Carmichael’s attempt to wring some political advantage from the Grangemouth saga is most regrettable. What we saw last week was commendable co-operation between the Scottish and UK governments in seeking a solution to the crisis. UK energy minister Ed Davey and Scottish First Minister Alex Salmond played particularly crucial roles – the former in persuading Ineos to go to arbitration and the latter in delineating the common ground between the two sides in one-to-one talks. Carmichael, the recently-appointed Scottish Secretary, himself formed half of a reassuring double-act with John Swinney, SNP finance secretary, in coaxing the two sides to a final resolution.

For Carmichael now to attempt to use Grangemouth as a weapon in the independence referendum is glib and short-sighted. Voters liked what they saw from their politicians over the past fortnight. The return to hostilities will be met with rolled eyes. Nor is his argument – that Grangemouth demonstrates that we have “the best of both worlds” by being within the UK – a strong one. Loan guarantees provided by UK ministers could easily have supplied by an independent Scottish administration, and political pressure from Whitehall (concerned about supply to the north of England), would have been no less forthcoming. Carmichael has done his cause a disservice.