A deficit of fiscal powers is to blame for boring budget

For a man getting to spend billions of pounds of other people’s money, John Swinney sounded less than enthusiastic.

The Scottish Government’s finance secretary is a serious man, the grit to Alex Salmond’s flash, but his draft budget statement on Thursday was a more sober affair than usual.

True, it was his first major appearance since the Yes campaign’s defeat in the independence referendum. That would sap the energy of any Nationalist, not least one who joined the SNP as a teenager.

The problem was not Mr Swinney’s vitality or a 45% funk: The budget was just, frankly, boring.

But it was always going to be.

Mr Swinney persevered admirably despite the modest fiscal powers of the Scottish Parliament, which place him roughly on a par with the treasurer of a middle-sized pensioners’ tea club.

Stamp duty would be abolished. Yay! And replaced with a land and buildings transaction tax. Boo! But, wait. First-time buyers won’t have to pay it on properties valued under £135,000. Get in. Always said that Swinney was a lad.

The long-standing council tax freeze would remain in place but services would still meet residents’ needs. The NHS, facing a £450m shortfall according to a leaked document, would be fine after all. Dr Swinney had prescribed a £288m tonic. Take once in the morning and hope you don’t need any more.

It was the familiar SNP left-right two-step. Talk social democratic and carry a big middle class vote-buying stick. The Nationalists have become so adept at being all things to all people that even Tony Blair could be forgiven for thinking them a bit shameless.

If the budget was a bore, the author of its dullardry was not Mr Swinney. The voters penned its turgid economic prose on September 18 when they voted to reject independence. Of course, a Yes vote would not have delivered formal independence for several years; a few more rounds with Barnett consequentials would have been on the cards.

After that, though, Mr Swinney could have taxed, spent, cut or borrowed to his heart’s content. More or less. He would likely not have the “full control of all the financial levers” that he often claims independence would bring — a currency union could have meant a fiscal stability pact with Westminster — but he would have been able to give those levers a good tug here and there.

And therein lies the challenge for the SNP, perhaps a more serious one than Nationalists fully comprehend. They are on a post-grief high. Losing has never been more rewarding. A mass influx of new members, poll leads for Westminster and Holyrood, a coronation-pending future leader popular with the voters and respected by the media.

Yet, without more access to those financial levers, the SNP can afford only to move money around. It can shift a good deal but change very little. The Nationalists hope this will convert more people to The Big Idea but there is as much chance that Middle Scotland will tire of the SNP’s Marlon Brando routine: We coulda been a contender if it weren’t for those bums in Westminster.

The difference between grievance and whining is a sympathetic audience. Give them long enough and the voters will turn on anyone. It scarcely matters whether the Nationalists are right about the limitations of the Barnett formula or the facinorous workings of Tory economic policy. If voting SNP doesn’t change things, the public will vote to change the government.

Which is why it is as vital for the SNP that the pre-referendum vow of more powers is kept as it is for the vowers themselves. Gordon Brown’s credibility is on the line but the future of the SNP is right there beside it. Seven years in government, seven years of sometimes impressive tinkering with the status quo, were the building blocks of independence.

But they weren’t enough to build a Yes majority. For that, the SNP has to prove it can do more than spend pocket money. To become an independent government it has to act like an independent government using powers short of an independent government which it can secure only with the assent of parties that oppose it becoming an independent government.

Isn’t politics fun?

The opportunity which the SNP should seize is presented by Lord Smith’s devolution commission, which will meet for the first time next week and see the winning and losing parties from the referendum campaign negotiate more powers for the Scottish Parliament.

Among the prizes up for grabs is full devolution of income tax, which could allow the Scottish Government to set its own tax rates, above those of the UK if it seeks to redistribute wealth and close the income gap or beneath if it desires a low tax “Tartan Tiger” economy. The devolution of housing benefit, which is also on the cards, could head off some future welfare reforms or provide scope for a distinct Scottish approach to modernising the benefits system.

Gain these powers and use them wisely and within a decade independence might begin to look more like a logical step than an unnerving leap to the cautious Scottish centre. But power brings risks and deprives politicians of the pretext to avoid difficult decisions. With great power comes the potential for great unpopularity, and unpopular governments do not win referendums.

The public are an emerging ally in all this. The expectations of the voters have burst through the austere seams of the devolution settlement. They may not have soared to the heights those in the Yes campaign had hoped for but nor are they still grounded in the like-it-or-lump-it past of top-down devolution, however much the more unreconstructed of Unionists might wish.

The SNP needs more powers to succeed, Labour needs them to survive, Scotland needs them to thrive. Few would envy the Smith Commission the task that lies ahead.

Originally published on STV NewsFeature image © Scottish Government by Creative Commons 2.0.

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