Hamish Macdonell - Tartan Tories – could the nickname grow on SNP?

IF THERE is one jibe thrown by Labour at the SNP which has really hit home, it is the taunt that Scotland is being run by a right-wing Nat-Con alliance, that the Tartan Tories are in charge. The jeers are all the more effective because everyone in the parliament knows that the SNP would not have got its Budget through without the backing of the Conservatives, and there are some SNP MSPs who are uncomfortable with their current situation.

They have waited many years for power in Scotland and now that they have got it they have to do deals with the Tories – their hated enemies, a party still held in contempt because of Thatcher, the poll tax and many other supposed crimes against Scotland.

But there is more to it than that. Alex Salmond has not just done a deal with the Tories to get his Budget through; he is gently moving the SNP to the right – in some ways at least.

The Tories supported the Budget not just because they managed to get an extra 500 police officers included in the package; they backed it because it was aimed squarely at middle Scotland, at small businesses and middle-income homeowners.

The two key elements of the Budget were: a freeze in council tax and rates relief for small businesses. These are essentially right-wing moves. The council tax freeze does more for people in big expensive houses than it does for those in the worst areas, and it does nothing at all for those right at the bottom who don't pay council tax at all. The rates relief will do a lot for the one area which is still the engine room of the Scottish economy: the small to medium-sized business sector.

There was more at the weekend when John Swinney, the finance secretary, suggested extra flexibility for councils, allowing them to lower business rates around the country in an attempt to attract business to particular areas. This could spark a bidding war among councils, with each trying to outdo the other, with competition between them driving down rates all over the country.

So does this mean it is now time for SNP activists to throw away their copies of Das Kapital and embrace the free-market ideas of Thatcherite Reaganomics? Well, not quite. In many ways, the SNP is still a party of the Left. It is strongly opposed to nuclear weapons, nuclear power stations and military intervention.

The party supports the action of a strong and powerful welfare state to improve the lives of the least well-off, it is generally opposed to the use of the private sector in public services and, if you scratch the surface of the party, it won't be too long before you find virulent anti-royalist sentiments as well. But, at the very least, it is now willing to look in more than one direction at once. It is almost as if the SNP, under Mr Salmond's leadership, has started to dismantle the traditional left-right dividing lines in Scotland.

The SNP is now centre-right on business, enterprise and taxation and centre-left on social, defence and energy issues.

There are clearly some SNP MSPs who are unhappy with this and would prefer their party to be an old-fashioned, left-wing, tax-and-spend organisation, a party with a clearly defined place on the left-right spectrum. They are uneasy about the Labour taunts, but neither Mr Salmond nor Mr Swinney will lose much sleep over them.

There has long been room in Scotland for a party of the centre-right that is simply not the Conservative Party, and there are votes to be won there. If Mr Salmond can get the support of large swathes of the business community, as well as a large number of middle-income homeowners, he will be on his way to winning the 2011 election and setting up a referendum on independence.

Labour's response to this move of the SNP to the centre ground has been to shout loudly about its traditional left-wing values, insisting that only Labour will fight against poverty and stand up for the vulnerable.

As the SNP is turning to the right, so Labour is reaffirming its position on the Left, something that is much easier now with Gordon Brown in charge than it ever was with Tony Blair as prime minister.

So don't be surprised if the SNP go into the next election pointing to their achievements in reducing business rates and council taxes and arguing that they could do so much more if they were also allowed to reduce VAT, stamp duty or corporation tax.

Or maybe, just maybe, the party which went into the 1999 election promising to raise income tax by 1p in the pound might go into the next election promising to reduce income tax by 1p in the pound, or even more.

Mr Swinney has just found 210 million to freeze council tax for the next three years. He does need to find substantially more than this – 250 million a year – if he wants to cut income tax by 1p in the pound, but that sort of amount, out of a budget of more than 30 billion, would not be impossible to produce. With middle England already grumbling about Scots getting more and more from the largesse of the public purse, how much louder would those complaints become if Scots also paid less in income tax?

As always in politics, it comes down to the economy. Mr Salmond has to show he can grow the economy if he wants long-term political success, and the best way to do that is by cutting taxes and cutting business rates.

Tartan Tories? Well, if such an approach brings the party consistent success, then perhaps even the old grumblers on the SNP Left might think it's not such a bad nickname.