They say that nothing is certain in life but death and taxes. Over the next five years, if the UK government has its way, public sector spending cuts can be added to that unhappy list of certainties. While the Scottish Government may have a level of control over where the axe falls, the axe has already been crafted.
The Scottish Parliament does not have the power to collect its own substantive tax revenue, and the limited tax varying powers granted following the successful yes-yes vote in the 99 referendum have been allowed to lapse through either incompetence or indifference. The Parliament obtains its funding through a block grant from the UK government under the Barnett formula, which it then distributes to non-reserved matters. While the rhetoric of the Salmond administration is of maintaining services and an unchanged commitment to supporting freely available prescriptions and personal care, the next few years is likely to see that sorely tested.
Rather cleverly, Salmond managed to pursue delays to the cuts to the Scottish budget until after the election, however addressing these cannot be delayed indefinitely. There are some expensive polices in the SNP governments 2011 manifesto, including the continuing commitment to free prescriptions and personal care – popular but expensive. Another popular – some unkind souls may suggest populist – policy was the pledge to freeze council tax. This may yet come back to bite the administration on the bum …if they sign up to the UK government’s agenda. It is up to us to ensure that the the Scottish Government holds its nerve in the fact of a fiscal onslaught.
The political power-sharing in the governance set up of Scotland, particularly central Scotland, has never been more complex. We have an austerity promoting Tory/LibDem goverment committed to cutting public spending, including the money given to the Scottish Goverment in leiu of tax revinue. An SNP government at Holyrood whose rhetoric embraces the public sector ethos, however given that the purse strings are still held by Westminister will come under pressure to impose the spending cuts. These spending cuts will be palmed off as much as possible as the responsibility of local councils – where it is the Labour party which has the largest stake – controlling three councils outright, including Glasgow, and the largest party in the majority of them.
Given that every major party operating in Scotland is either initiating, instigating or implementing public sector spending cuts, what is the independent minded anti-cuts activist to do? So many targets; so little responsibility likely to be taken. And how does our desire for not only control over our finances but also our destiny fit in with the reality of cuts on the ground. The only sensible response is to make independence a backdrop and a filter of all anti-cuts actions and activities that we participate in. The cuts which are about to descend on Scotland are a direct result not only of our position within a rentier state and the financial dependence we experience as a consequence, but also the international position we find ourselves in as part of the UK state and its dependence on global capital flows.
The cuts – to benefits, public services and employment – are a direct result of the capitalist crisis of 2008 and the UK government’s decision to rescue the banks at the cost of their citizens. As part of the UK, Scotland had no power to oppose this decision. A decision to lend £62 bn was taken in secret by the Bank of England and the total amount gifted to the banks had reached £850bn by the end of 2009. To put this in perspective, the entire Scottish budget is just £33bn. Or to put it another way the amount given to to the banks over the course of just 18 months is as much as is spent on public services by the people of Scotland in 25 years.
If the UK government can find £850bn kicking about when the financiers go cap in hand; if it can produce £62bn from under the table with a nod and wink and a promise from a bunch of bankers and if it can find £1.5bn for rich men’s bonuses after they threaten to go in a huff, why cant they find a couple of billion for the services that are actually needed, used and wanted by its citizens.
Given that Scotland had no say in the decision to gift this money, why should the citizens of Scotland accept cuts to wages, services and living standards to pay for it? We must ensure that we are never again in a position where our future can be mortgaged to pay for the luxury homes of City Bankers, their fancy offices and positions of dominance over access to business funding, housing and public sector capital projects. Devolution, with health as a reserved matter, has protected the Scottish NHS to some degree however the legacy of this disgraceful transfer of public money to private purses lives on with an estimate of £6.7bn being paid over the next 30 years on hospitals worth less than 1bn.
The message of the anti-cuts movement should be clear. We didnt ask for this money to be given to bankers, we didnt want this money to be given to bankers, we had no say in this money being given to bankers and we had no power to stop these unholy deals being done. But we refuse to pay for their crisis.
A deficit Scottish budget, protecting the services that the people of Scotland rely on will lead the way in ending this obscene transfer of wealth from the public to the banks, shareholders and private financiers that are currently holding us to ransom. Deficit budgetting obtained new housing, social investment and protected public services in Liverpool in the mid-80s when the Thatcher government was forced into a humiliating climbdown. Putting pressure on each and every council in Scotland to set a budget based on the needs of its citizens rather than the desires of the international financiers for repayment and demanding funding from the Scottish Government to support it will pressurise the Salmond administration to take on this fight.
The cuts being imposed on Scotland are a consequence of our lack of influencel over the money markets and our domination by the Bank of England, the UK treasury and the international financiers that they appease. Only independence will allow us to shape our own destiny and stand up to the tyranny of global capital. We need to make our demands clear at each governance level of Scotland. To councils we demand need based budgets, with the shortfall to be made up by the Scottish Government; to the Scottish Government we demand that Council services are adequately financed with any deficit in the budget being demanded from Westminister, and to Westminister we demand complete control over our financial destiny and international fiscal strategy. No less is good enough.
First published on Bella Caledonia on 3rd June 2011