As many people were getting ready for a winter break, December 19th saw Shona Robison MSP share her budget with Holyrood. The Finance Minister's changes to income tax, as predicted, dominated the headlines. On tax and welfare Scotland is moving in a different direction to Westminster.
For the Scottish Conservatives and sections of the business community the moves on tax were seen as sacrilegious. We are told that people will quit the country rather that contribute to, and benefit from, Scotland's 'social contract'.
Conversely the STUC welcomed aspects of Robison's approach noting the increased taxation for higher earners was progressive and arrived in the context of ongoing Westminster induced budget pressure. However Roz Foyer of the STUC added that the council tax freeze and indeed the failure to reform local taxation endangers the services provided by local councils.
Roz Foyer also explained that the STUC's published research has shown that over three years, £3.7 billion could be raised in tax if the Scottish Government made use of all of its powers. Tellingly the STUC added that the opposition parties in the Scottish Parliament have failed to call for this.
This suggests the need for an effective alliance beyond the elected politicians, one that encourages our Government to test the limitations of devolution by challenging austerity and pushing for greater equality. In this context the Deputy First Minister’s closing budget speech remark that, 'we are at the upper limit of the mitigation that can be provided within the devolved settlement' is extremely interesting.
But building an alliance that responds to Robison's assertion will not be simple, for those experiencing poverty, inequality and poor health, mitigation is not enough. Others, that should perhaps know better, still suggest that growth and 'trickle down' is the answer. This needs to be consistently challenged.
The new year will see us mark the the 25th anniversary of devolution. We need to ask how the devolution settlement will respond to Scotland's future, and to consider what that future might look like. Too many budget days that negatively impact local government, social housing, and further and higher education are not good for any of us.
Published 22 December 2023.
Prior to Robison's speech, we had published the following article (17 December), titled 'Reshaping our Public Sector?'
December 19th will see Shona Robison get to her feet in Holyrood. In a much trailed speech she will announce changes to income tax with those earning over £75,000 contributing more.
This is a welcome step but it runs the risk of overshadowing other concerning announcements.
The Deputy First Minister has already shared her view that the size and shape of the public sector will need to change. There is no question that the devolution settlement and the inflationary context make for difficult times but it is also true that the reshaping that is being talked about will hurt.
A detailed assessment of the 19th will take time. But the Fraser of Allander Institute are already saying that the increased contribution from the highest earners will not plug the expected £1.5 billion budget gap. So who is first in line for ‘reshaping'? Consideration will likely be given to those working in Scottish Government departments. Robison has hinted heavily that there will be no compulsory redundancies here.
Local Government is a likely target as the health service is protected but the squeeze that is already being experienced in Fire, Police and further education may get tighter. The recent local government pay dispute (2023-2024) saw threats of service cuts come to the surface. This dynamic is likely to be tested to its limits in the new financial year.
Defending the Health Service is an understandable and welcome policy aspiration. But it will not be enough to defend those in our poorest communities ( see The Sickness of Austerity - Scottish Left Review 137).
The local campaigns to oppose cuts that have been sustained over the last decade are now being picked up by major unions and the STUC. Councillors across the country will be asked to make difficult decisions by the end of February. The Scottish Government's ‘promise' to fund Council tax rises are unlikely to address fully the reality where need is the greatest. There will be tense times in Lanarkshire, Inverclyde, Dundee, West Dunbartonshire but also elsewhere.
Scotland’s figures for inequality do not make for pretty reading. The UK government attempts to absolve itself from responsibility by pointing the finger at Humza Yousaf's government in Edinburgh. Edinburgh looks likely again to, in spite of its mitigations, shift much of the impact towards the local. Councils and a largely depoliticised voluntary sector are expected to carry an even greater burden.
The endless experience of ongoing Tory cuts requires communities, the voluntary sector, trade unions and politicians at all levels to be clear about which side they are on, to actively oppose austerity in what is likely to be an election year. Our society does not need more cuts. It does not need the management of mitigation. Society needs reshaped for the benefit of the people and planet. Building a campaign to support a public sector that understands this would be a good start.