The differences between the UK Conservative government and the SNP Scottish government are more rhetorical than substantive on many economic and social policy issues
The Scottish National Party (SNP) describes itself as ‘a social democratic political party committed to Scottish independence’. However, two key speeches at the SNP’s latest annual conference which finished at the end of last week suggest that both aims will have to be postponed. Instead, the political dynamic in Scotland and the UK as a whole will continue to contribute to a strange and often inconsistent social and economic strategy that would not be chosen in either a fully reserved UK or a fully independent Scotland.
The first speech, by Nicola Sturgeon, the SNP leader, confirmed that, although she believes that support for Scottish independence may have risen since the referendum, she does not foresee a second referendum in the near future (unless – and this may be a caveat of importance – the UK population votes to leave the European Union on the back of votes in England and opposition in Scotland). Instead, Scotland will enjoy further devolution in some areas, such as a greater ability to set income tax rates and vary some social security benefits, and continue to deliver most public services, albeit without having complete control in either sphere of policy.
Consequently, it is not yet possible for the Scottish government to take a fully ‘social democratic’ approach, often linked to the idea of ‘Nordic’ social democracy, thereby combining (a) spending decisions based on an appeal to universal service provision, and (b) redistribution through taxation. Instead, there is great potential for inconsistent UK/Scottish strategies: the Scottish Government to oversee a spending regime that favours the wealthy and middle classes (on universal free services with no means testing) while the UK Government maintains a tax and benefits policy that many people will perceive to be insufficiently redistributive.
These issues arise infrequently on the Scottish political agenda, partly because Scottish independence has drawn attention away from serious debates on budget priorities. Further, a continued sense of constitutional uncertainty – built on the SNP leadership’s short-term acceptance of devolution, but long-term hope for independence – may help to minimise economic debate and thus maintain an economic system that few would have designed.
The second speech, by John Swinney, Scotland’s equivalent of the Chancellor of the Exchequer, confirmed something else of interest: that the SNP likes to combine ‘social democratic’ ideas on spending, but strategies on taxation that would generally not look out of place in George Osborne’s Red Box. Swinney proposed to give local authorities the power to reduce rates of business tax (well in advance of Osbourne granting the same powers in England). This initiative follows a series of speeches by Alex Salmond, during the time he was First Minister, which suggested that the SNP would also like to reduce corporation taxes and airport charges, to increase economic competitiveness and to encourage inward investment. Swinney’s proposal also reinforces the SNP government’s decision to (effectively) ‘freeze’ the rates of council tax, which remain a more regressive option than its previous plans to introduce a local income tax, and is consistent with its likely aversion to raising income tax (the most toxic taxation instrument) in any meaningful way.
In that context, the economic lines between a Conservative UK government and an SNP Scottish government are far less clear than we might suppose from the vociferous debates that took place during the referendum debate in 2014 and were repeated in the run-up to the UK general election. Indeed, the biggest dividing lines were in areas that the SNP knew it could not control – as when it argued for an alternative to ‘austerity’ and a slower rate of budget cuts to allow for economy-boosting investment – all of which makes the differences seem more rhetorical than substantive.
In cases where the SNP has demanded more powers successfully, its actions tend to relate to ‘hot button’ issues, such as its intention to mitigate the effects of the ‘bedroom tax’. Rather than propose a major reform of tax and benefit provision to get to the ‘root causes’ of socio-economic inequalities via redistribution, it talks instead about the use of public service delivery to mitigate their effects. This strategy relies largely on public service reforms, localism and the idea of ‘prevention’ policies – by which is meant intervention as early as possible in people’s lives to improve their life chances via schemes such as parenting programmes – which are also promoted by the UK government.
Furthermore, these strategies generally still sit in second place in importance behind the higher profile spending decisions which often exacerbate inequalities. For example, the SNP government maintains free tuition fees in universities which, in the absence of redistributive fiscal policy and the continued presence of an attainment gap, doubly reinforce major inequalities in education.
These various approaches to economic and social policymaking sometimes receive critical attention, but generally only from opposition parties which remain remarkably unpopular in Scotland and a media that many supporters of the SNP or independence view with incredible mistrust. As long as independence remains the main reported story of SNP conferences, and the SNP retains its extraordinary current popularity, few will pay meaningful attention to these important socio-economic policy issues.
Paul tweets @CairneyPaul.