"....... the Scottish Government is making it harder for me. The election manifesto being launched today will, by all accounts, advocate a return to the top income tax rate of 50p in the pound on the people earning more than £150,000 a year. Not that this affects me personally – I’m a freelance writer, for heaven’s sake – but to my mind it’s the principle that counts and the practical effects this principle will have.
For a Scotland probably now plunging into recession, it would be hard to think of a worse policy. All over the world, governments finding their economies in this failing condition habitually cut taxes so as to give consumers more spending power and by such means start the process of renewing growth. In the Scotland, the birthplace of modern economics, we now propound the opposite. The result will be the opposite too. Our growth rate, which even when not negative is woefully feeble, will languish further. Scotland will continue to get relatively poorer than England. Independence will be indefinitely postponed.
All this would be easier to understand if the Scottish Government was in some coherent sense socialist. For myself I am glad it is not, because I confidently expect June 8, 2017, to be the day European socialism dies, when in its English form it will be put to the sword only a month after it collapsed in its French form, and while we wait for the same fate to overtake it in its German form in October. Sweden will then be left as the sole major EU member to be ruled by socialists, but that has been going on with few interruptions since 1917. Only in Scotland is socialism, in a good many people’s eyes, something for the future rather than just a relic of the past.
It is not that it lacks for good advice. A faithful champion of the nation’s cause, ex-MSP Andrew Wilson, was placed in charge of the growth commission set up to fill the glaring lack in the SNP’s spectrum of policies of any ideas likely to make us more prosperous, as opposed to living off windfalls or subsidies. And he has pointedly made it known that he has been arguing against the 50p top tax rate. It is really depressing that the government has decided to ignore the best advice available to it.
So far, those in the nationalist movement of a more liberal or conservative frame of mind have been able to go with the flow of an SNP on the left because that was what had brought it to its dominance of Scottish politics – and, without supremacy in the socialist west of Scotland especially, independence would never be won. But while the party talked left, it acted right (in both senses of the word). As First Minister, Alex Salmond was a tax-cutter. He froze the community charge (which meant a reduction in real terms), and he eased the burden of business rates, while also calling for a lowering of other taxes, particularly corporation tax, which were not yet under his government’s control. In his years of office, the Scottish economy proved to be less sluggish than usual, and the aim of matching the UK growth rate, when announced in 2010, did not at the time look to be beyond us.
Since Nicola Sturgeon took over, I’m sorry to say, Scottish economic policy has become a bit of a shambles. She herself appears ignorant of and indifferent to economics. The man who might have looked after these things for her, John Swinney, unwisely shifted himself into the quagmire of Scottish education, where he is in danger of sinking. So the Scottish economic shop is being minded by two men, Derek Mackay and Keith Brown, for whom the term clueless would be a compliment. While fatuously claiming the economy is resilient, they have in fact exposed its fragility.
Of course, the Scottish Government would love as a remedy to spend a lot more money, but that is no different from most governments around the world, including conservative ones. After all, Theresa May and her merry men are counting on a budget deficit of £58 billion next year, with no final elimination of the gap between getting and spending before 2025 (otherwise known as the 12th of Never). If this is austerity, we may well wonder what fiscal luxuriance would look like. In any case, the choice of such targets is not just an act of will, to be guided by progressive or reactionary principles, but is in the final analysis a matter of what the financial markets will stand for. They have been lenient with the UK, at least this side of Brexit. An independent Scotland will need to win their confidence, rather than just assume it.