The First Minister will have to admit to a dwindling SNP membership that the party has to change direction, says TERRY MURDEN
John Swinney delivers his first address to the SNP conference next weekend and he’ll need the schedulers to allow him enough time to tackle a bulging to-do list. Just three months into his leadership he is also making heavy use of a red pen to strike out some of the principles and policies on which he built his campaign.
‘Honest John’ will have to admit to a dwindling SNP membership that the giveaways that have offset higher income taxes are no longer sustainable. The calculator doesn’t lie and the peak rail fare subsidy and winter fuel payments have been the first to be withdrawn along with free bus travel for asylum seekers.
More cuts are on the way and some big sacrifices must be made, possibly free prescriptions and tuition fees, that will also delay Mr Swinney’s dream of eradicating poverty.
Inevitably, Mr Swinney and his Finance Secretary Shona Robison will blame Westminster for the budget settlement and wash their hands of any culpability in the reckless overspending spree. There is some truth in this, but only in so much as budgets are tight for both governments and both are being forced into cuts.
What cannot be denied is that Holyrood’s deficit of 10.4% of GDP against 4.5% across the UK means somebody is continually breaking the Micawber principle. If Mr Swinney is to turn misery into happiness he’ll have to tell the those gathering at the EICC to prepare for a tough budget less than two years from the Scottish general election.
The economy may be showing signs of a slow recovery, but energy prices are going up, so is inflation, expected to rise to 2.75% before the end of the year. There is talk of just one more interest rate cut before the end of the year to ease pressure on businesses and households.
Against this backdrop Mr Swinney will claim that under independence all these problems will disappear. Even with the German economy flirting with recession he’ll claim that the EU offers a route out of economic despair and insist he will be the FM to release Scotland from its UK shackles. As such he will be repeating the message of his predecessors Alex Salmond, Nicola Sturgeon and Humza Yousaf who found the electorate continues to say no.
Mr Swinney and his ministers say that with greater control over the economy they could achieve more. The mismanagement of public finances under the current powers is hardly a persuasive argument to have that request granted.
With responsibility for the big economic and monetary issues remaining with Westminster, he should breathe a sigh of relief that the markets take little notice of that 10.4% deficit figure. It doesn’t move the currency, or directly influence the Bank of England, aside from all regional economies feeding into the overall UK data.
If Scotland was independent, the current deficit could create a potential Truss-style alarm, devaluing whatever currency the country was using and forcing even deeper cuts or higher taxes than those we are currently facing.
Terry Murden was Scottish Editor and Scottish Business Editor of The Sunday Times, Business Editor of The Scotsman, and Business and City Editor of Scotland on Sunday. He is now Editor of Daily Business
There are not nearly enough political and financial commentators hammering home the point you’ve made. Regardless of whether UK Government’s allocation to Scotland is mean, generous or somewhere in the middle it is the job of Holyrood’s reigning party to live within their means. The SNP have not done that preferring instead to blame others for not being able to do all they would wish. Instead they have misspent on their pet projects at the expense of good governance on essential council services, education, NHS, ferry links, safe roads etc.