Working class unity knows no artificial borders: postal workers’ picket line in temperatures of minus 11 at Wishaw, near Glasgow. Photo courtesy CWU Scotland.
Short of options and short of money, the SNP/Green coalition has effectively shelved its demand for an immediate referendum. Yet its budget is widening the tax gulf with the rest of Britain…
In mid-December John Swinney, Deputy First Minister in the SNP/Scottish Greens coalition, presented the draft Scottish Budget for 2023-24. It will make Scotland the highest taxed part of Britain, continuing the trend since 2017 when some taxation powers were devolved.
This budget continues to keep Scotland on a divergent economic path from the rest of the country. Increased fiscal autonomy and distinct taxation in the devolved parts of Britain risks an uncontrolled drift to de facto separation and the break-up of a united working class.
Workers in Scotland are thoroughly engaged in the same or similar struggles on wages and conditions as their compatriots in the rest of Britain. This budget represents an estimated £129 million raid on their wage packets.
Anyone in Scotland earning over £27,850 will pay more income tax than those working in England or Wales. And the salary threshold for triggering the higher rate of tax is only £43,663 in Scotland compared to £50,271 elsewhere. A worker on a £75,000 wage in Scotland will pay over £2,000 more in tax each year.
Divergence
A downside for the SNP policy was highlighted by Dr Liz Cameron, chief executive of the Scottish Chamber of Commerce. She pointed out the disadvantages for workers and businesses, saying, “With over 350,000 people alone in the higher rate bracket, questions remain on the impact this will have on talent attraction, retention, consumer confidence and indeed departure of workers to other parts of the UK.”
The SCC said that the “further widening of the cross-border tax gap was exceptionally concerning.” Reacting to the Budget, Simon Cockburn, the chairman of the Chartered Institute of Taxation’s Scottish technical committee, pointed out that it “further entrenches the divergence between the income tax regimes in Scotland and the rest of the UK.”
‘This budget represents an estimated £129 million raid on workers’ pay packets…’
The Budget for Scotland also announced cuts in spending that bit harder than those elsewhere in Britain. The Institute for Fiscal Studies concluded that overall spending on public services had been “cut by more than in England and Wales” with “substantial reductions in funding for areas other than the NHS.”
There will be no restrictions on council tax rises in Scotland. This can be seen as an attempt to divert anger away from Holyrood and onto local councils who, with ongoing cuts, will be hard pressed to avoid raising taxes.
With the closure of the Edinburgh Film Festival, Film Theatre and running down of the International Book Festival, this Budget heaps more cuts on top for a struggling arts sector trying to revive after the pandemic lockdowns. Composer and Musicians Union member Ben Lunn commented, “This is a sad shift, and shows the Scottish government have no vision. Just more cuts, which will see the whole creative sector struggling because of their neglect; time and time again, all bluster and no action.”
Struggle over legislation
As a result of public anger and political pressure, £20 million that had been earmarked for spending on preparations for a second Scottish independence referendum has been diverted into social care funding. This means that plans for such a referendum to be held in 2023 have now been abandoned.
However they may try to spin this move, Holyrood in effect has accepted the decision of the Supreme Court that its devolved powers did not extend to organising a legal referendum without the agreement of the British Government.
Nevertheless, the SNP/Scottish Greens coalition is still determined to press on with the drive for separation. It wants to present legislation calling for powers to be created allowing Holyrood to call such a referendum on its own initiative. That move would amount to unilateral overturning of the Scotland Act 2016 and other devolution law.
The start of 2023 will see a struggle in Holyrood over the Bill for this legislation – as well as over the divisive Gender Recognition Act which the SNP and Scottish Greens are also trying to push through.
Brown pops up
Remarkably, just as the SNP and Greens were demanding a boost to their powers, former British prime minister Gordon Brown popped up with his long prepared blueprint for just that – he too wants more powers for the “Scottish Parliament”.
Devolution itself was described by the late Tam Dalyell when he was in parliament as a “motorway to independence with no exit routes”. The proposals presented by Gordon Brown are designed to create a super boosted version.
The House of Lords would be abolished, to be replaced by an elected “Second Chamber of Nations and Regions”. This would divide and regionalise the whole of Britain in a way similar to the vision of the European Union laid out in the 12 zone map of Britain that it produced.
A new council, one for “the nations and regions” would enable enhanced separate economic development with much increased borrowing and other financial powers. The Labour Party would pledge giving Scotland powers to join, in its own right, international agreements with the European Union, Unesco and the Nordic Council.
This plan would accept the already substantial independent foreign policy and activity of the SNP and Scottish Greens in Edinburgh. Their activities go well beyond domestic responsibilities into foreign affairs. The overseas presence of what their users dub “foreign embassies” now costs over £9 million each year and includes substantial offices in Berlin, Beijing, Brussels, Dublin, Ottawa, Paris and Washington. The total external affairs budget now exceeds £35 million.
‘Plans are being developed for a “two-tier” health service…’
The British government seems to have capitulated on the concept of the nation state. The Gordon Brown plan would effectively shatter it. The SNP/Scottish Greens coalition would inevitably use the opportunity to establish direct links with the European Union in their quest to abandon Britain and rejoin the EU.
The Brown plan reeks of the back-room work of the neoliberal EU; it should not be countenanced by Labour Party members – who, in any case have not been consulted. Nor for that matter has anyone in Scotland been consulted – not trade unions, civic bodies or political parties.
Brown’s proposals would only strengthen the SNP and Scottish Greens at the expense of the Labour Party. Every time devolutionists like Brown give the SNP more powers, the SNP wins politically.
Threat to NHS
Meanwhile, plans are being developed for what has been called a “two-tier” health service. This coincides with the SNP National Care Plan being deemed unfit for purpose. The STUC General Secretary Roz Foyer said “The Scottish government is needlessly gambling with the future of social care in Scotland.”
Leaks in November revealed NHS heads had been in discussion with SNP representatives to abandon the concept of health services being free at the point of delivery. Resulting headlines such as “Privatisation of Scots NHS seems to be under active consideration” alarmed many.
The proposals under discussion for Scotland included the introduction of an ability to pay system. This idea menaces the NHS throughout Britain; it must be resisted.
Dr Iain Kennedy, chair of BMA Scotland, said: “It is beyond doubt that in order to avoid sleepwalking into the two-tier system that threatens this fundamental principle of free health care we rightly hold so dear, we need a proper, open conversation about the NHS and how we make it sustainable now and for generations to come.”