TERRY MURDEN asks what the Scottish by-election result may mean for economic policy
The surprisingly large swing to Labour in Thursday’s by-election will see the independence bandwagon arriving in Aberdeen next weekend on four flat tyres and Humza Yousaf wondering if he can get it running again to resume his increasingly dubious journey. As for business, the vote should be taken as a potential signal that a shift in economic policy could be under way faster than anyone might have expected.
The SNP leader and First Minister has been severely wounded by the result and his party left wondering where it goes from here. As Professor Sir John Curtice says, its long dominance of Scotland’s politics is now under serious threat for the first time.
That points to a root and branch review across all policy areas, and pressure to show its new-found commitment to the economy is more than just electoral sloganising.
On the evidence of last week’s vote, few seem to be buying into any of the SNP’s messages. Poor reports on education, health and crime are compounded by an economic record that, for the most part, means a string of failed projects from Burntisland Fabrications to the Ferguson Marine ferries debacle, a threat of higher income taxes and reluctance to ease the business rates burden.
We have had the disastrous deposit return scheme, unconvincing support for the oil and gas sector, poor communication and lack of help for the hospitality and holiday lettings sectors, more regulation and costs on parking and travel, and the bonkers low emission zone which is undermining workers in the Glasgow economy, including some of those who voted on Thursday.
How can the SNP claim to be engaging with business when a quick scan of social media reveals the extent of the exasperation of its failure to listen and do what business wants? There are numerous stories of “consultation” with business being little more than an exercise in outlining the impact of policy decisions that have already been taken, while the influence of the anti-growth Greens is becoming a deadweight around Mr Yousaf’s neck.
Instead of putting the blame for failure on Westminster, on Brexit and anything that the Tories say or do, the SNP-Greens need to improve their management of the economy, starting with an admission that independence is dead for at least a decade, probably longer. Start working with Westminster instead of against it in order to channel opportunities that derive from projects such as the freeports and encourage investment from the south and overseas into new industries like photonics and AI.
In the short term – and the SNP has only months to turn its fortunes around – Mr Yousaf has to rethink a series of policies that actively work against business, including many of those listed above. So far he has pledged to work more closely with business, only to confirm plans to introduce a new income tax band, ratify questionable legislation that threatens many small B&B businesses and equivocate over the future of the oil and gas industry.
A change of tack is crucial. After, all it’s the economy that usually wins – and loses – elections and Mr Yousaf, who bizarrely spoke in his programme for government of not pursuing ‘growth for growth’s sake’, needs to convince the electorate that he understands what is at stake.
Even so, he may be too late to rescue himself and his party that risks running a lame duck government until the next Scottish elections in 2026. The Rutherglen and Hamilton West result has potentially turned the political tide that could see waves of SNP seats switch to Labour. A change of government has been in the air for some time and Scottish Labour leader Anas Sarwar is starting to think about ordering curtains for Bute House.
Would a Labour administration at Holyrood mark a significant change? The danger is that it will also over-promise and under-deliver, on plans cascading from the UK party for state-owned energy providers or creating green jobs. Let’s not forget that it was a Labour government in 2009 that first proposed HS2. For the record, I opposed it from the start as likely to become an over-budget white elephant.
In Scotland, Labour not only has to present a credible plan to re-invigorate the economy, it has to tackle the budget deficit fuelled by a Holyrood government addicted to spending on social programmes it could not afford. It may mean accepting that some pet projects and free services will have to be ditched.
Mr Sarwar could have the advantage of a Labour government in Westminster to support him. At least that would remove the ‘blame game’ that has become a feature of the current set up and see the two governments working in harmony.
In the meantime, Thursday’s result points to two years of speculating on whether the SNP-Greens have what it takes to get real on the economy or whether Scottish Labour really are a government in waiting.
Terry Murden held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business
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