Scottish Budget: How the SNP turned a record high Budget into service cuts and tax rises – Murdo Fraser MSP
If you ever decide to short-change somebody, to give them less money than you usually do, and they spot it and complain, remember the words of our Finance Secretary Kate Forbes. Tell them that you are merely giving them “greater flexibility”.
That is what the Finance Secretary has done with all of Scotland’s councils. Her latest budget sees the funding to Scotland’s 32 local authorities cut by more than £100 million a year. This she describes as “greater flexibility”, because she has graciously allowed them to put up council taxes if they want to make up the shortfall.
Thanks to the Chancellor Rishi Sunak, Ms Forbes has more money to spend on public services than any other Finance Minister since devolution. The block grant is up by £3.9 billion on last year, an increase of over ten per cent.
It takes the special imagination of this SNP administration to turn more cash into spending cuts and tax rises. But they have done it. Truly a special talent to have almost £4 billion extra to spend, and then leave the people of Scotland worse off.
Bob Cratchit and Tiny Tim must have been masters of yoga by Ms Forbes’ reckoning, considering how much “flexibility” Scrooge gave them over the years.
I do not know if she is a fan of the literary allusion, but she certainly seems to struggle with financial literacy.
The SNP’s policy of raising income tax rates at the higher level seems to have come at a price, not just to the rich but to the public coffers. It is raising less income tax than before it was introduced. Only the SNP could maintain a policy of higher taxes which leaves them with less money to spend.
With cash withheld for referendums and foreign spending, neither of which is her responsibility, the Finance Secretary has managed to spend more money without Scots taxpayers feeling the benefit.
Local services will end up being cut, whilst Council Tax rises are likely in April, now that the previous three per cent annual cap on increases has been removed. Little wonder that council leaders across Scotland – including all the SNP ones – were so scathing in their assessment of the Budget.
Only the Finance Secretary’s excuses could be described as ‘rich’. The chaos of Scotland’s finances she put down to Brexit, even though she has more money to spend than ever.
Not since the SNP drugs’ minister blamed record drugs deaths on Margaret Thatcher – three decades after she left office – have the SNP’s attempts at deflection been so threadbare.
This is an administration that vehemently objects when the UK government seeks to spend extra cash on Scotland’s infrastructure and demands that the extra spending goes through them. This they refer to as a Westminster ‘power-grab’.
Given this Scottish government’s woeful track record towards them, it is no surprise that councils are increasingly looking to Whitehall for direct support, bypassing Holyrood altogether.
Kate Forbes can make cash disappear so completely, without any public benefit to show for it, and so well, that you could be forgiven for thinking that SNP chief executive Peter Murrell was her accountancy tutor.
This was, we were told, a budget for “stability”. In this the Scottish government seems have defined stability as stasis, and that means Scotland’s economic prospects will continue to decline.
Greenwashing aside, there was little to prepare our economy for the post-pandemic world. Education, skills, and the digital economy were mentioned little. This was a budget rich in resources thanks to the block grant settlement but with a poverty of thinking.
The only narrative that runs through SNP budgets seems to be to deny local democracy the chance to meet the voters’ needs and desires. There is no vision of what Scotland’s economic future is to be, other than we now know, thanks to the First Minister, it is to be without oil and gas and the employment and tax revenues that the sector produces.
Nationalist economics have always been scant. Once, Alex Salmond, the former SNP leader that current SNP leaders cannot name, used to tour the country talking of the Laffer curve and asserting the theory that, in some circumstances, cutting taxes can lead to a growth in public revenues.
The current leadership seem so ashamed of his legacy that they have now conclusively proved the converse – they can create the circumstances where they can raise tax rates and thereby lower public revenues.
Raising income tax rates for middle-earners was supposed to make Scotland fairer, to mark us out amongst the other nations of the United Kingdom as uniquely devoted to equality. The reality is that for ‘fairer’, read ‘poorer’. We seem to have become a nation whose finance ministers are more devoted to the self-serving soundbite than to wealth creation and equity.
The Scotland that shaped economic thought globally when Adam Smith wrote The Wealth of Nations now languishes in a depressing poverty of thought. Scotland, once the lighthouse of economic theory that illuminated the world, is now a rock, not to be founded upon but one upon which she herself flounders.
The cliché used to be that Scots were careful with money. Clever, even. Wealth creators. Perhaps the collapse of the Royal Bank of Scotland destroyed that reputation. But the tired clichés and clichéd thinking of the current SNP administration are doing nothing to restore it.
The only cleverness now demanded in Scotland’s public finances is that of local government leaders working out how to preserve services while Scottish central government cuts their funding. And the closest we come to ingenuity is Kate Forbes’ ability to turn record public spending increases into cuts and tax rises for all.
Murdo Fraser is a Scottish Conservative MSP for Mid-Scotland and Fife
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