SF: How will we pay for it?

Scotland's Future Yesterday, the Bank of England announced that interest rates would not rise from the historic low of 0.5% at least until 2015, as the Bank “believes the UK economy is running at around 1.5pc below its potential, and said it would need to make up more lost ground before it would consider raising rates”: that “productivity was much weaker than expected, while surveys pointed to less slack in the economy.”

Austerity is stifling the UK economy. The Tory/LibDem oft-repeated claim that there are more people in work than ever before is technically true but says nothing about the real state of the economy: people in part-time work, work on minimum wage, work below minimum wage: more people than ever before in work but claiming benefits.

What of the Scottish economy?


Bedroom Tax DefeatedOne of the biggest potential boosts is the end of the bedroom tax in Scotland. From an email sent to me announcing the historic agreement between Scottish Labour and the SNP to end the bedroom tax in Scotland:

“I think it’s important to realise this victory has only been won because grass-roots resistance, in particular massive non-payment and potential direct action to stop evictions, has meant the bedroom tax has become unworkable in Scotland?

The bedroom tax was acknowledged by Scottish Labour, SNP, and Scottish Green MSPs to be absolutely unworkable in Scotland because no local authority in Scotland has ever built as many one-bedroom council homes as would be necessary if everyone “underoccupying” their council home was evicted to a smaller one. Huge numbers of families would be forced into bed&breakfast “temporary accommodation”, massively increasing council housing benefit bills and enriching private landlords and causing more homelessness – none of which is good for the productivity which, the Bank of England soberly notes, is the essential ingredient of a stable economy.

Of course the same is true across the UK. But in Scotland, the parties that openly acknowledge the pointlessness and uselessness of forcing the poorest and most vulnerable to suffer cuts in their housing benefit because they have nowhere else to go, are in the majority in government and so could do something about it.

Edinburgh Anti-Cuts AllianceToday in Edinburgh Council, the councillors are debating and voting on the budget, and the Edinburgh Anti-Cuts Alliance is lobbying – a collection of community groups and trade unions, including Edinburgh East Save Our Services, who were key to the successful anti-privatisation campaign of two years ago. This is Scotland in minature: the elected politicians in coalition voting on a budget they may not individually agree with, and which their constituents do not, in general, support.

Edinburgh Council plans ‘savings’ of £36 million in the next financial year. These cuts will certainly lead to increased costs of care for the elderly and disabled; reduced services and support for disabled people; increase in class sizes; and school libraries closing. This is austerity: cut jobs, cut services, cut education, all for the sake of a reduced budget that looks good on paper and leads to the Bank of England noting quietly that “recovery” is unsustainable and unbalanced.

Edinburgh Anti-Cuts AllianceThe SNP/Labour coalition council claims they will cut costs by “competitive procurement of outsourced services” – that is, that people who work for charities and businesses which are funded by the council to provide essential services, will be expected to do their jobs for less pay. Lower wages mean less spending means the local economy gets less money meaning more recession – local shops closing, local employers cutting jobs. It’s estimated that staff at council-funded organisations will see a 25% drop in their wages by 2018.

This austerity is ultimately sourced from Westminster, but the SNP at Holyrood is also responsible. Edinburgh Council could review the higher levels of the council tax. In Edinburgh today, at least 6% of the homes for sale are priced at over half a million: on the ESPCC website today a third of the homes for sale are priced at over £225,000. Yet the highest band of council tax valuation set at properties over £215,000.

Edinburgh Anti-Cuts AllianceThis freeze on council tax isn’t Edinburgh Council’s choice: the SNP have kept council tax at 2007 levels for as long as they’ve been in government – a superficially-appealing policy that saves people who live in Band H houses a lot more than people who live in Band D houses, and gives local authorities very little flexibility in determining their own budget.

Andy Wightman notes that the power of the Scottish government to enforce a council tax freeze on local authorities is accomplished by anti-democratic means:

But the Scottish Parliament does not have the power to set council tax rates. In order to implement its promises following the 2011 election the SNP had, in effect, to bribe local authorities to accept the freeze or face cuts in revenue. This corruption of democracy is made possible by the lack of any constitutional protection for local government’s autonomy – a point elaborated on recently by David O’Neil, the President of COSLA. In short, central government has virtually unfettered freedom to interfere in the affairs of local government even to the extent of abolishing it.
So, if local authorities wish to freeze the council tax – fine. But the Scottish Government should have no power to do so or to appeal to voters in national elections on the basis of this brazen interference with local government’s freedoms and powers.

There are other options besides council tax, and Edinburgh Anti-Cuts Alliance has proposed reviewing the salaries of the highest-earning council employees; rescheduling the repayment of interest on PFI contracts; and imposing a tourist tax on city hotels and businesses. Des Loughney spoke to the council of the need for all workers to get paid a living wage – both those directly employed by the council and those who work for outsourced services.

We voted in 1997 for a Scottish Parliament with tax-raising powers: neither Labour/LibDem coalitions nor the SNP have shown any interest in making use of that power.

A favourite line from SNP politicians speaking about the referendum is “putting the levers of government into our hands”, or, in longer form:

Scotland should be independent because the best people to take decisions about Scotland’s future are those of us who live and work here.

We believe the people of Scotland should have the opportunity to choose a new path for our nation. We believe that independence is the necessary next step for Scotland if our nation is to become a fairer and more prosperous place.

But when we who live and work here have no means of effectively making decisions about our future by voting, because the politicians we vote for aren’t allowed to set budgets according to the policies they committed to in their manifestos, how are we able to choose the fairer and more prosperous path?

Edinburgh Anti-Cuts Alliance

The next meeting of Edinburgh East Save our Services is on Tuesday 18th February, 6.30pm at Northfield Community Centre.
Everyone is welcome to join us.
We will be discussing the outcome of the lobby of Edinburgh council.
It would be great if you could join us at the lobby outside the City Chambers from 8.30-9.45 am on Thursday 13th February.
At the meeting we will also be discussing the latest good news about the bedroom tax.

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Filed under Economics, Indyref White Paper, Politics, Scottish Politics

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