Fight Labour and SNP austerity

Editorial of issue 75 of the Socialist

Update since this article was written the SNP government have announced £500 million in public sector cuts

What we think

SNP First Minister John Swinney, at his August Bute House meeting with Labour Deputy Prime Minister Angela Rayner, stated “Scotland faces the most difficult financial circumstances in the devolution era”. Swinney’s pleas for major investment in public services are being unheeded by Starmer’s Labour government. Chancellor Rachel Reeves, citing the “£22 billion blackhole left by the Tories” states bluntly “if we cannot afford it, we cannot do it”.

 Starmer’s government bases itself firmly on the needs of the British capitalist market, hindered as it is by historically low productivity and stagnant growth. 

Finance Secretary Shona Robison, taking her cue from Reeves, announced emergency spending controls on government departments. This comes after the largest cuts since devolution passed in the last Scottish government budget, before the agreement with the Scottish Greens was ended.

Every part of Scotland’s public services, from local authorities to affordable housing to arts funding face major financial pressures. Several universities even face going bust, councils are cutting teacher numbers. Pay disputes with local government, rail and college workers trade unions are ongoing, with many other public sector workers expectant and impatient about pay rises that meet the cost of living.   

Fiscal deficit

Swinney will announce the SNP’s new programme for government in September, hoping to begin to recover from its big losses in the general election and present a coherent strategy for campaigning for independence. He, and the SNP’s case for an independent capitalist Scotland is further undermined by the Government Expenditure and Revenue Scotland (GERS) report showing, Scotland’s net fiscal deficit at £22.7 billion, 10.4% of GDP.

Revenues from the North Sea halved.   The report’s result shows Scotland’s vulnerability to shifts in global oil and gas markets including cost increases because of the Russia/ Ukraine war. It is now more than double that of the UK deficit. 

The Holyrood opposition Scottish Tories, themselves in a leadership crisis, point to decades of higher social spending, using devolved powers, by the SNP. They and capitalist media commentators are now more vocal in raising questions over the long-term viability of free NHS prescriptions, baby boxes and child payments, subsidised rail fares, no university tuition fees and council tax freezes in Scotland. Insiders from the SNP government are mooting in the press about delaying the roll out of further free school meal provision.

The SNP point to the higher revenues Holyrood receives than the rest of the UK from its “progressive” use of devolved income tax powers which can be aligned in a fiscally responsible way with higher spending. Swinney and Robison also point to the UK government keeping the majority of Scotland’s revenues under the devolved Barnett funding formula claiming their capitalist vision of independence would mean having greater fiscal flexibility to increase revenues. This is utopian given the current state of the world capitalist economy, they even claim a return to the bosses European Union would be part of this. An independent capitalist Scotland would be an indebted state like the poorer EU countries.

The SNP have only ever utilised their devolved economic powers to enact limited social protections that allowed them to pose to the left of the Tories, for a period. They havent even made the changes to taxation the STUC recommended in a 2023 report, including a proportional property tax and tax on private jets what would raise an extra £3.7 billion. There is money in society. While currently Scotland’s major cities have declared housing emergencies, there is a boom in investment by private housing providers and in commercial property including the builders of student accommodation. 

Even faced as they are now with the closure of Grangemouth oil refinery and major questions over the future of the North Sea hydrocarbons industry (previously a bedrock of their case for independence) the SNP, while claiming they will “fund net zero” are not prepared to step outside the confines of the capitalist market and raise public ownership of Scotland’s most revenue generating economic capacity.

Starmer’s GB energy, to be based in Scotland is also a market-based solution. Only a workers led transition based on the Socialist nationalisation of oil, gas and the entire energy industry under democratic workers control can possibly guarantee the livelihoods and income of workers and communities.        

The SNP have fundamentally never been prepared to take the wealth off the richest or to mobilise the working class for more funding from the Tories, and now Labour.  Socialist Party Scotland and our activists in the trade union’s have consistently called not just for changes to the income tax bands to hit the 1% by the Scottish government, but for fighting no cuts/ needs budgets from Holyrood and councils, utilising all financial powers, including borrowing and reserves, cancelling PFI/PPP projects and mobilising the trade unions and working-class communities to demand back from Westminster the billions stolen in austerity. 

Re -emergence of national question?  

Starmer and Swinney’s initial overtures and discussions suggest they want a more “collaborative” approach to the relationship between Westminster and Holyrood rather than the instability seen under the Tories. But neither capitalist party will be able to solve the national question. This September it is decade since the mass politicisation around the 2014 independence referendum that turned into a nightmare for the British capitalist class and its allies internationally. The YES vote, 1.6 million strong, was based on the rage of workers and youth against capitalist austerity and a yearning for social change.

This was most explicitly expressed in the last weeks of the campaign as the polls narrowed and tens of thousands attended Hope over Fear – the Socialist Case for Independence rallies that Socialist Party Scotland played a crucial role in. Our activists in this mass audience explained the need to answer “Project Fear” with demands for nationalisation of the banks, big industries and major parts of the economy under a socialist plan rather than market chaos.  Then as we do now, we called for a struggle for a independent Socialist Scotland as party of a voluntary Socialist Confederation with England, Wales and Ireland.    

It was only the SNP’s inability to answer the economic fears stoked by “Project Fear” the campaigning of the Tories, Labour, the US president and the EU campaigning together which raised the prospect of pensions disappearing, rocketing energy bills and even more austerity fuelled by debt that got NO over the line. The SNP’s White Paper for capitalist independence was of course drafted by the then Finance Minister Swinney.

July’s general election saw the issue of independence ebb with the cost-of-living crisis to the fore. The SNP with successive crisis, their record of implementing Tory austerity and their inability to challenge the British capitalist state over self determination are now no longer seen by wide layers, critically by radical workers and youth as the natural leadership of an independence movement. Support for independence however still hovers around 50% in the polls.

Discontent with a pro capitalist Starmer government will no doubt be expressed in trade union-based class struggle, and struggle against cuts in communities but also potentially over the issue of self-determination, with Starmer, reflecting the wishes of the majority of the capitalist class, refusing to negotiate over the right to indyref2. With the SNP’s pro capitalist leadership now discredited, after it was widely perceived to be anti-establishment in 2014 by sections of workers and youth, the trade union and workers movement have an opportunity to link the struggle for our class interests to democratic rights on a mass basis.

It also cannot be ruled out that Labour’s gains in the 2024 general election will not be repeated to the same scale in the 2026 Holyrood election, Starmer and Scottish Labour’s Sarwar already point to the SNP’s dismal record that by then will be just under 20 years in power. But by then there will be rising anger at Labour, and workers having experience of struggle under Starmer.

Demands on Starmer’s Labour

There is an opportunity this autumn for the trade unions and the wider working class and youth to come into struggle make demands on Starmer’s Labour and the SNP. Workers and youth can have no truck with the idea of “waiting” until what we need can be “afforded”. Not just over pay rises and investment into public services but also for the repeal of anti-trade union law’s including the ballot thresholds contained in the 2016 legislation. This would open even more opportunities to take effective strike action nationally mobilising the power of workers in areas like local government to force pay demands as Westminster, Scottish government and councils set their forthcoming budgets.

Socialist Party Scotland was alone in standing against the surge to the SNP to which much of the left succumbed in the aftermath of 2014, calling for a new mass workers party based on the trade unions that could draw in the participation of the youth and the best of the anti-war, climate and other movements. This idea, which we have raised consistently by standing as the Trade Unionist and Socialist Coalition will now likely become a major element in the ferment of discussion that is likely to develop in the trade unions of how workers can get political representation under Labour.

We call on those Labour MPs suspended by Starmer for daring to vote for the SNP’s amendment on the two-child benefit cap to discuss with Corbyn and the left independents but most crucially with the trade unions about steps towards a new worker’s party including drawing up workers demands in a manifesto and a conference. A force that began to develop into a mass workers party, utilising trade union power would also cut across the development of the far right.

The sustained crisis of the SNP stems from its attempts to reassure big business and the ruling class, in Scotland and internationally that it is a reliable partner for government and the viability of independence while at the same time hold onto the electoral support from sections of workers and youth. Witness the fallout over Gaza, with Swinney giving secret permission to External Affairs minister Angus Robertson to meet Israeli diplomats while the SNP  has positioned itself as a pro ceasefire party  against Starmer’s Labour and the Tories.     

Neither Starmer’s Labour or the SNP both based on crisis capitalism with its ten-month, bloody slaughter in Gaza, its climate crisis, its economic inequality and stagnation can offer anything to workers struggling to feed their families or the hundreds of thousands of young people leaving school. Capitalism needs to go, its time to join us in the struggle for a socialist future.