Saturday, 9 May 2015

It Doesn't Matter

The SNP should be applauded for their remarkable General Election success. Those of us who criticised their campaign rhetoric and felt their economic policies were potentially hugely damaging to Scotland must take pause.  What do we learn from this?

It turns out that in Scottish politics at least, quite a lot of things don't really matter.

The SNP campaigned for independence based on a series of economic claims that were demonstrably misleading at the time and have since been shown to be clearly wrong.  If the SNP had won the Independence Referendum we would be starting our independent lives £8bn a year worse off (that's £1,500 for every man, woman and child in Scotland). This is no longer conjecture - it is a fact demonstrable from the Scottish Government's own published figures.

So the fact that the economic case they presented for independence has been shown to be nonsense? It doesn't matter.

John Swinney sat on the Smith Commission and signed up to the resulting agreement on behalf of the SNP. But on the day it was published he was already crying foul and stoking further grievance claiming the recommendations
"do not reflect the full wishes of the people of Scotland [..] falls short because it could only go as far as the Westminster parties were prepared to go"
Nicola Sturgeon adopted a similar tone
"it is not enough, it doesn’t live up to the vow, it doesn’t deliver a modern form of home rule"
SNP councillors publicly burnt the Smith Report and - after a brief suspension - remained in their posts.

Instead the SNP demanded Full Fiscal Autonomy (FFA) - before realising that their rhetoric about "sending more to Westminster than we get back" and oil being "just a bonus" would become rapidly exposed as untrue if we were to keep our own taxes and actually try and fund our own public spending.

When the IFS produced analysis showing that FFA would create an immediate £8bn black-hole in Scotland's finances the SNP - after initially dismissing the analysis as being simply "Project Fear" - proceeded to execute a spectacular reverse ferret.

They argued "it won't happen anyway" and "by the time it happens all the numbers will be different".  With quite breath-taking hypocrisy they even argued "we'd have to also keep the Barnett Formula in place otherwise the Smith Commission principle of no detriment wouldn't be honoured". That's the same Smith Commission report that - in order to achieve the no detriment principle - fell so far short of the SNP's expectations. The same Smith Commission report that they dismissed, ridiculed and set fire to in a dustbin.

This is not so much wanting your cake and eating it as saying your'e going on a diet but want to keep stuffing your face with cake.

So the fact that the SNP aren't actually prepared for Scotland to economically stand on it's own feet just yet, despite all of their indyref rhetoric? It doesn't matter.

The SNP have argued it would take us time to grow and fill the fiscal gap that separation from the UK exposes and - of course -  to achieve that growth we'd need more powers.

When asked how this growth will be achieved their supporters suggest a series of tax cuts (reduce Air Passenger Duty, reduce VAT on tourism, targeted tax cuts to SMEs) at the same time as arguing to increase public expenditure because they are "anti-austerity". That these measures would inevitably mean an acceleration in the rate of increase in debt at least in the short term is simply brushed over.

So the SNP - who spent the indyref complaining that the UK's debt mountain is ruinously high and a sign of Westminster's economic incompetence - now argue to increase the rate of debt growth? It doesn't matter.

How likely is it that these tax cuts would produce sufficient economic growth to off-set the tax losses? It's hard to say, but if this was such a "slam-dunk" economic strategy you might think the Tories (hardly shy of cutting taxes) would be all over it.

But let's assume it might work as an economic strategy and ask ourselves how much growth a nimble independent European country might achieve competing against the lumbering beast of the UK. Funnily enough the Scottish Government grappled with just that question when writing the independence White Paper. They offered the following;
"If Scotland moved from the rates of growth it has experienced in the past to instead match the levels of growth of small European countries, the benefits for people in Scotland in terms of prosperity and employment would be significant. As an illustration, had growth in Scotland matched these other independent nations between 1977 and 2007, GDP per head would now be 3.8 per cent higher, equivalent to an additional £900 per head"
So the SNP themselves have suggested that 3.8% higher growth over a 30 year period is a realistic growth dividend to expect from independence. Unfortunately, to close the £8bn deficit gap Scotland would require 16% higher growth than the rest of the UK.  So that would take about 120 years then.   During which time we would be funding the higher deficit how exactly?

So the fact that the SNP's claims that we could grow our way out of the black-hole caused by FFA are - on their own terms - hopelessly optimistic? It doesn't matter.

When the SNP manifesto was published the IFS (and any vaguely informed commentator who read the manifesto) noted that "the SNP's anti-austerity rhetoric does not reflect its plans". In fact The SNP's manifesto simply matched Labour's proposed tax increases and (according to the IFS) effectively matched their spending plans too.

So the fact that the SNP's actual economic policies were materially the same as those they accused of being "Red-Tories"?  It doesn't matter

When the question of Independence was raised during the election Nicola Sturgeon put on her baffled face and - adopting the tone normally reserved for explaining things to a three year-old - told us that voting for the SNP wasn't a vote for Independence, it was a vote to give us a stronger voice at Westminster.  That their manifesto includes a commitment to Full Fiscal Responsibility and that their written constitution commits them to pursuing Scottish Independence is not something we're meant to concern ourselves with.

So the fact that the SNP will use their voice at Westminster to pursue FFA and independence at any cost? It doesn't matter.

I've clearly been missing the point because the Scottish electorate have shown none of these things matter.

I've made the mistake of thinking that voters realise it's not enough to just want social justice, you have to be able to afford it.

I've made the mistake of thinking that voters would see through a party saying "we're anti-austerity" if they couldn't back that up with economically coherent policies.

I've made the mistake of thinking that the economic deceit attempted during the Yes campaign would be remembered and punished by the electorate.

It turns out that all that's required is to say "we hate the Tories", "they're as bad as the Tories" and "we're anti-austerity".

But. Look where we've ended up.

Put yourself in David Cameron's shiny Church's brogues for a moment:

Scotland is now represented at Westminster by a homogenous mass of grievance seeking, Tory hating SNP MP's who's declared aim in life is to make your life as difficult as possible. They also want Full Fiscal Autonomy - at least they said they did and to refuse it now would make them look exceptionally silly.

Giving Scotland Full Fiscal Autonomy means you can justify enforcing English Votes for English Laws (EVEL) which immediately boosts your effective working majority.  You might need to sweeten the pill with a transitional phasing out of Barnett but as Barnett goes you gain £8bn or so to spend in the rest of the UK.  Sure, you'll have to work out some stuff about fiscal constraints and borrowing limits to protect Sterling - but to all intents and purposes you can rid yourself of those troublesome jocks whilst claiming you've kept the Union together.

The fact that this would lead to even deeper public spending cuts in Scotland than we'd endure as an integral part of the UK?  That surely matters.


Anonymous said...

Spot on Kevin. As soon as I saw the results my first thought was "the only way the Tories can keep the UK intact is to call the SNP's bluff and deliver FFA". UnUnfortunately, as I've found out to my detriment on many occasions, the evidence never matters, it's all about the rhetoric. Welcome to politics. Hell will - hopefully - mend us.

Martin said...

Reading this I can sense your overwhelming frustration and sheer exasperation with the Scottish electorate, well 50% of them anyway, and I sympathise wholeheartedly.

How do you counter faith based politics when all the facts are ignored and dismissed? You can't.

I'm beginning to think that FFA is the bitter medicine needed to make SNP voters face facts, not the hardcore 30% of course, they'd happily see a economically scorched earth Scotland to be 'free', but the other 20% for whom the SNP message has been a seductive one, the 'soft' SNP supporter in other words, who with the right approach, can be 'shown the light' so to speak.

Only facing up to the economic consequences of higher taxes and/or public service cuts will do it though.

It is however a last roll of the dice for supporters of the union, so utmost care has to be shown in how it's deployed. If Cameron really wanted to, he could force it through the Commons, and the SNP could do nothing about it, but that would be a red rag to a bull, Sturgeon would cry foul and gain yet more sympathy, no,this has to be a long game from Westminster.

There is time, despite the bluster, Sturgeon will not call another referendum before 2020, I'm certain of that.She certainly couldn't call a referendum on the basis of Westminster forcing more autonomy on Scotland, how on earth could a separatist leader cry foul about more powers for goodness sake?, it would take things to a new bizarre height.

FFA is really the only ammunition left in the locker, it has to be used wisely, but the time has now come for it to be used.

The only way to defeat the SNP is to give them enough rope to hang themselves.

Just trying it out said...

Great post - says it all, really! I'm still waiting to see whether Cameron offers Full Fiscal Autonomy with a bit of transitional funding, or goes for Full Fiscal Something with a more transparent (and reduced) replacement for Barnett. Or perhaps he'll offer something more fudgy altogether.

Either way, it doesn't feel great to be sitting on the sidelines while the future of my country (or countries?) is likely to be decided on the basis of a political calculus between the Conservatives and the SNP.

Unknown said...

Maybe I can add one more to your list. The SNP spent the entire campaign claiming to be the party of social justice. Many of their supporters take this as an act of faith. When people make the claim about the election that "social democracy is dead", the Nats come out and say "not in Scotland it isn't"

And yet look at their policies. Time after time transferring wealth and resources from poor to the wealthy. "Free" services are nice for me, but you have to target if you want to help the weakest in society. "Free" tuition, yes, but cuts that leave the poorest students in more debt than the English system. And cuts to FE places that hit the poorest hardest. All a question of priorities, and the SNP reward the middle classes. Am sure there are many of their supporters who actually like this, call them the "shy tory nats". Others are simply being deceived.

We even see Salmond, unable to come up with any progressive policies of his own, blatantly lying in his election leaflets and claiming personal care for the elderly and free bus passes as SNP when they were implemented under Lab/Lib administration. Now if that isn't a sign that you have nothing to show, I don't know what is.

But then the Scottish public are taken in by all this and don't care that it is all talk and no action. It doesn't matter

Nial said...

There are a large number of SNP supportes who think Scotland is being bled dry by the rest of the UK, as a scary example see the comments at Wings over Scotland.

Cameron should publish an 'official' version of and invite the SNP to correct any errors.

Then propose FFA on a take it or leave it basis, the SNP support would collapse.

Anonymous said...

As the UUP and DUP made startlingly clear, their price for supporting a minority Tory government would have been £1bn more spending in NI. And Cameron would surely still find it helpful to have them sitting on his government benches. In Wales the Tories have more MPs than ever before - a mini-revivial (with a severely weakened Labour Party) that might, perhaps, be given more vigour with some judicious public investment…£7.6bn+ would create a nice war-chest, leaving plenty to help reduce the deficit/fund the transitional arrangement. "One Nation"? A clear nod and a wink to NI and Wales, I'd say. "And look - I'm giving Scots what they voted for: control over their own money…".

It's clear the only people who can (perhaps that's should) curb the SNP are Scotland's voters, so why not make it real by creating a direct link between the way people vote in Scotland and the money in their pockets/NHS/schools etc.

Surely, it's going to prove irresistible?

Anonymous said...

Kevin, has managed to reduce the Social Science of Economics and Politics, to an amount of Money.
No mean feat, as this has defied Social Scientists, Politicians and Economists for centuries.
The amount of money is:
£8 Billion, or £1,500 a head.

He never addresses the UK Debt of £1,500,000,000,000, and the fact that it is GROWING.
That, according to Kevin, is GOOD Economic Management. Even though it's £56,000 of UK debt per working head. [Debt is simply postponed Tax, so only 'Working' Tax Paying heads count!]

It makes no sense to call the Tories anything other than by their real Name:
The NATIONAL Party of England,
elected by England, for England. Hence: EVEL, BritExit, and Scotland's Independence are now inevitable. @Palayo

fork boy said...

The economic side has been covered pretty well. I have a few 'big picture' questions for you Kevin.

1. Do you think it is a good idea for a government to create policy without having any concern for the economic implications of that policy.

2. Do you think Barnett is a good thing morally. It subsidies based on nationality and not need? I have heard the arguments that it is a formula based on population density and so on, but personally think that is a crock.

3. Is it a good idea that Scotlands economy relies so heavily on a subsidy which is not within our ultimate control?

Mark said...

So where does the UK go from here? Time will tell, but this is my best guess: England becomes a distinct polity within a federal 'British' system in which the establishment ideology would be entrenched via a written constitution. I don't think many in Westminster would bat an eyelid. It would satisfy all those who moan about the lack of a written constitution, and it would be claimed that it consolidates the Union which the Scottish referendum backed, while formally acknowledging Scotland's legitimate desire for self-governance (within formal, constitutional restraints).

I happen to believe that devolution can't 'work' without its eventual formalization in constitutional terms

Ron Sturrock said...

The way to see by faith is to shut the eye of reason.
Benjamin Franklin1755

Just trying it out said...

@Martin "FFA is really the only ammunition left in the locker, it has to be used wisely, but the time has now come for it to be used."

I think it's really important, for those of us who support the continued existence of the UK and would like a future in which it is viewed as legitimate by most Scots (even those who aspire to independence), that we defend the principle of transfers within the UK.

As Niall Murray explains here, it is fundamental to any state in which there are economic disparities (whether temporary or more long-standing) between different regions, nations etc:

The alternative - which could, for example, lead to lower pensions in Scotland not as a result of local policy decisions on tax and spending but because of a shortfall in local revenue from national insurance contributions or oil taxes - makes a mockery of the notion of being part of the same state.

A corrollary of this, of course, is that any transfer should be fully transparent - both the amount and the criteria upon which it is based - and that, in the event of Scotland being in surplus, money should flow in the opposite direction.

Politically, "full fiscal transparency" and the enhanced powers it would entail would need to be accompanied by Scottish Labour, Lib Dems and Conservatives becoming true sister parties of their rUK counterparts, developing their own Holyrood-focused policies, and running in UK elections with manifestoes that would be distinct from those of their allies in the south.

I'm not sure how likely any of this is to happen, but I suspect that anything less will just be fuel to nationalist fires, while true FFA would give short-term Schadenfreude to those of us frustrated by the SNP's 'logical inconsistencies', but only at the expense of fatally damaging the UK.

Anonymous said...

H L Mencken’s analyses are fairly apposite in this instance:

‘Democracy is a pathetic belief in the collective wisdom of individual ignorance.’


‘Democracy is the theory that the common people know what the want, and deserve to get it good and hard.’

But please, Kevin, don’t give up. Yours is a voice of sanity and logic that is needed more now than ever. And even if your sterling efforts can’t stop the Scottish economy going down the u-bend, at least you’ll have the satisfaction of being able to point people to your blog and say: ‘I told you so!’

Incidentally, if I were Mr Cameron, not only would I be giving Scotland FFA and scrapping Barnett immediately, I would also be closing Faslane and moving the subs to Milford Haven, saying to the people of Scotland, ‘Well, you voted for it. And now you will be free to prospect in the Clyde estuary for all those secret oil fields you keep banging on about.’ Good and hard. Good and hard.

All the best, Derek

Anonymous said...

Great article. Shines a light on the cynical motivation behind Murdoch's support for SNP in Scotland and the Tories in Wales and England

Anonymous said...

Debt left by a labour government. Gordon Brown selling off the UK's gold reserves at a time when the price of gold was at its lowest. The Iraq war which nobody wanted - costly and now look at it. Some one within labour actually thought it amusing to leave a note in the treasury office simply saying "Sorry - there is no money" after being voted out of office - Well I'm glad whoever this was within the labour party finds it highly amusing. The Tories cannot work miracles; they cannot pull a rabbit out of a hat but they can, have been and will be running with austerity (which hurts us English as much as it does everyone else in the UK) The defecit has been reduced over the last 5 years and the Tories will continue to reduce it until (hopefully) by the end of the next government, they will be running a surplus.

Anonymous said...

Honest question are a large % of Scots a bit thick? It just doesn't seem normal up there. Scotland used to be known for education - maybe the talent all moved south??

Anonymous said...


"He never addresses the UK Debt of £1,500,000,000,000, and the fact that it is GROWING."

You seem to skirt the issue that as proven by the IFS/GERS, Scotland is adding a higher percentage deficit to that growing number per capita.

An Indy Scotland would take its fair portion of that debt and be adding to it by at least £22bn a year. That's £14bn for the budget deficit and a further £8bn for the shortfall Barnet covers.

You cannot criticise the size of the national debt when we as a country are increasing it more per-capita than England. That would be monumentally stupid.

Anonymous said...

You must be joking here! The Tories are a BRITISH party and always have been. The clue is in their full name which remains the 'Conservative and Unionist Party'. If they are an 'English party' like you claim them to be, then explain why they REFUSE to give us a referendum on even the mildest form of devolution (let alone a proper Parliament like Holyrood is) and instead palm us off with the inherently unworkable 'English Votes for English Laws' concept, and continue to flood us with yet more immigrants! The Tories are NOT English nationalists. Far from it! Enoch Powell was the last Tory you could say was in anyway an English nationalist.

Anonymous said...

I agree. Devolution can work but only when it is coherent and done on an all-UK basis.

newry_lad said...

The answer is simple: Yes, they are because they have been taken in by the prospect of an SNP government giving them independence without ever mentioning the cost. They are prepared to accept lower living standards for 'freedom' - I'm not Scottish so I am free to say what I think about the Scotland I had come to love but now I am beginning to hate.

Edwin Moore said...

Thanks Kevin I think this is right.
Me, I keep thinking of Platonv's Happy Moscow - Believe the Dream!