The SNP Has Failed Scotland

John McDermott writes:

Two months before the Scottish National Party won 56 of Scotland’s 59 seats at the general election, I watched its leader give a speech at the London School of Economics.

Nicola Sturgeon told the audience that policy made by the government of the United Kingdom amounted to “simplistic measures to deal with complex problems.” 

The Holyrood parliament in Edinburgh has much to teach Westminster, where “short-term posturing can often trump strategic thinking,” added Scotland’s First Minister. 

Sturgeon called for transparency in writing budgets and for the UK government’s record to be “opened up to proper scrutiny.” The same should be done for the SNP. 

The party has been in power in Scotland for eight years, as a minority administration from 2007 to May 2011, and thereafter as a majority government. 

None of the questions to Sturgeon from the media at LSE, however, concerned her party’s record in Edinburgh.

Not for the first time, it was able to take advantage of an imbalance between what Scotland knows about the rest of the UK and what the rest of the UK knows about Scotland.

Here was a microcosm of a bigger problem.

For contrary to Sturgeon’s claim, it is not policymaking in Westminster that wants for scrutiny; it is that by the SNP government north of the border.

Since the SNP’s Holyrood victory in 2011, constitutional issues have dominated public life in Scotland.

The plot-setting negotiations, the drama of the two-year referendum campaign and the astonishing denouement after the No vote in 2014 have diverted attention from the SNP’s main stage: government.

Having smashed the Labour Party in Scotland, there is no doubt that the SNP is a phenomenal political force.

But ahead of the election to Holyrood next year, it is essential for Scots to ask: what has the SNP actually done for Scotland?

What any government in Edinburgh can do for Scotland is determined by the Scotland Act 1998 and its subsequent amendments, most importantly the Scotland Act 2012.

Scotland has far more control over its own affairs than many realise, though Sturgeon is inevitably calling for more.

The 1998 legislation established the devolved parliament and laid out the powers that would be reserved for Westminster. In many cases, it built on the autonomy that Scottish institutions already enjoyed within the UK.

Today, Scotland makes policy for its health service, nurseries, schools, colleges, universities, police, prisons, courts, councils, cultural institutions and in some areas of economic development.

Holyrood is a parliament that spends more money than it raises itself. Since devolution, it has been responsible for more than half of public spending in Scotland, but less than one-tenth of tax revenues.

The share of taxes raised in the country will rise to 16 per cent from April 2016, when the Scotland Act 2012 is implemented in full.

It will increase further still, to about 40 per cent, under the proposals in the new Scotland bill announced in the Queen’s Speech.

These will give Scotland a degree of devolution within a sovereign state only bested by Canadian provinces and Swiss cantons.

The new Scotland bill legislates for the conclusions of the Smith Commission, the cross-party group established after the independence referendum to make real “The Vow” of further devolution by pro-union politicians in the final week of campaigning.

Although the SNP signed up to the agreement coordinated by Robert Haldane Smith, it continues to argue that its plans do not go far enough, especially on the control of social security benefits.

An annual block grant from the UK government makes up the balance between what the Scottish government spends and what it raises in taxes.

In 1999, the first year of the devolved parliament, public spending per head in Scotland was 12 per cent higher than in the UK overall, a figure that is essentially unchanged 16 years later.

This reflects the generosity of the increasingly controversial Barnett formula used to calculate the grant from HM Treasury. 

“John Swinney’s job is by definition not difficult,” says Alex Bell, former head of policy for Alex Salmond, Sturgeon’s predecessor as SNP leader and First Minister.

Swinney, the Cabinet Secretary for Finance, must by law balance his £37.5bn budget.

Referring to Swinney’s task, which has involved having to make relatively few decisions on taxation, Bell says, “he just has to divide up the pie.” 

Still, how that pie is divided reveals something of the government’s priorities.

In 1999, Scotland spent a higher share of its budget on health and education than England. But since the SNP took office this share has fallen below that south of the border.

Spending on schools in Scotland was cut by 5 per cent in real terms from 2010/11 to 2012/13, according to Audit Scotland, an independent public spending watchdog, while remaining flat in England.

The Institute for Fiscal Studies (IFS) estimates that health spending in England will increase by 6 per cent in real terms from 2009/10 to 2015/16; but in Scotland it will rise by only 1 per cent over the six-year period.

In the second half of that period, from 2013/14 to 2015/16, health spending will actually fall in Scotland in real terms, according to Audit Scotland.

All this despite Scotland having to implement less austerity than England, due to the nature of the Barnett formula.

Overall, Scotland cut spending on devolved public services by about 7-8 per cent between 2009/10 and 2015/16.

In the same period, the UK government cut equivalent spending in England by about 12-13 per cent, according to the IFS.

How does Scotland use the relative flexibility afforded by its fiscal settlement? In 2013/14 it spent about 6.5 per cent more on health per person than the UK average, down from 16.5 per cent in 1998/1999.

While allowing the extra amount it spends on health—and on education—to fall, the Scottish government has dramatically increased spending in other areas.

For example, Scotland spends more than twice as much per person on “enterprise and economic development” and agriculture than the UK average, three-quarters more per person on transport and approximately one-half more on “recreation, culture and religion.”

And Serena Kutchinsky writes:

“The beauty of the Scottish National Party is that it’s a mix of people from different backgrounds,” says Tasmina Ahmed-Sheikh, one of the SNP’s group of 56 Westminster MPs. “Some have come from the right, some from the left but everyone has something to offer.”

A solicitor, businessperson, and former actress, Ahmed-Sheikh is now the SNP’s Trade and Investment spokesperson.

She is also a former Conservative who was born in Chelsea and raised in Edinburgh. She defected to the SNP in 2000.

Speaking to Prospect in May, she said that her party’s economic stance was a mix of pro-business ideas which would “traditionally be thought of as centre or centre right,” with a strong sense of social responsibility.

When challenged that she was therefore a Blairite, Ahmed-Sheikh replied: “Absolutely not.” She suggested that the SNP’s landmark election victory has shifted the political landscape away from the traditional axis of left and right.

“We are an inclusive party with a civic nationalism that puts nation first,” she said. The party’s electoral success was remarkable—but the challenge for the SNP is to have an impact in Westminster.

With Labour in disarray and focused on its leadership contest, she suggests that SNP is the only “true opposition” to the government.

Ahmed-Sheikh is adamant that the government’s slim majority means her party can exert significant pressure on legislation.

“The SNP got 50 per cent of the vote in Scotland. David Cameron’s government will be ignoring a constituent part of the United Kingdom if he doesn’t give us our say.”

There is no more appetite for higher taxes and wealth distribution in Scotland than there is anywhere else in the UK and Ahemed-Sheikh’s pro-business position shows that her both she, and the party, grasp this.

In government they have emphasised tax-cuts over increases—witness the business rates relief for small enterprises which benefits almost 100,000 Scottish firms. The CBI described the SNP as “very pro-business.”

In a bid to gain further influence on legislation affecting businesses in Scotland, the SNP has tabled several amendments to the Scotland Bill.

Ahmed-Sheikh dismissed the bill as a “watered down” version of last year’s Smith Commission, which proposed the devolution of further powers over corporation tax, VAT, national insurance and air passenger duty.

The SNP is especially keen to cut the last of these claiming that it would boost tourism in areas such as Ahmed-Sheikh’s own constituency of Ochil and South Perthshire.

“We need to make sure that we are supporting business,” she said. “Control over VAT and NI will enable us to give, where necessary, a boost to businesses whether they are a new start-up or a business requiring a bit of help.”

One of the SNP’s core electoral messages was its opposition to austerity—but a setback came in April when the Institute for Fiscal Studies published a report stating that there was a “considerable disconnect between [the SNP’s] rhetoric and [its] stated plans for total spending,” and suggesting that party’s policies risked prolonging austerity.

Challenged with this, Ahmed-Sheikh said many Scots are facing “life-challenging circumstances. We stood on an anti-austerity agenda. Why? Because it’s not working—26 per cent of children in my constituency live in poverty.

“What we proposed was a modest increase in public spending to allow investment into our economy; to allow us to create jobs, build houses and take people out of in-work poverty.”

The SNP is not currently seeking another independence referendum, she said, or full fiscal responsibility.

For a referendum to take place, Ahmed-Sheikh said: “it has to be in a party manifesto, and that party needs to be elected into a majority government—that’s not where we are.”

On the EU referendum, she believes there should be a distinct Scottish campaign and that a No vote could be a trigger for a second independence referendum.

“If the constituent parts of the UK vote to stay in, but England votes to come out, what are we going to do about that?

“And what does that say about the ‘one nation’ idea that we’ve heard so much about from the government benches?”