Scottish budget: SNP’s sorry capitulation to austerity continues

Philip Stott reports

The Scottish Government’s draft budget for 2017/18, which was unveiled on Thursday, was yet another sorry chapter in the SNP’s capitulation to Tory austerity.

Finance secretary Derek MacKay claimed that the budget would deliver “£240 million extra for services”. But this boast lasted barely 24 hours before crumbling into incredulity as council after council let it be known they would all unveil cuts budgets of their own in the coming weeks.

Indeed as MacKay was making his budget speech to the Scottish parliament, top officials in Tayside Health Board were admitting they intended to make cuts of £214 million over the next five years. Scotland’s NHS faces cuts this financial year alone of half a billion pounds. Public services in Scotland are at breaking point and this proposed budget will add to the misery facing workers and local communities.

The SNP refused to even use the new tax powers they now have to increase taxes on the richest. Instead council tax rises will be the order of the day for millions, alongside a government pay cap of 1% for local government and other public sector workers.

Hundreds of trade unionists protested outside the parliament on budget day, including Glasgow Janitors who are striking against their own Labour council. A council that is currently trying to privatise their own ICT service.

Their union, Glasgow City Unison, was demanding a no cuts budget from the SNP on Thursday. Nationally, Unite and Unison both support the Scottish Government and councils setting legal no cuts budgets. This is the only alternative to the failed policy of the SNP and Labour in power, which is to play pass-the-parcel with Tory austerity.

Socialist Party Scotland and the Trade Unionist and Socialist Coalition outlined our alternative approach (see below).

It’s absolutely vital that the trade unions in Scotland prepare urgently to build a mass campaign against this new round – and in many ways a deepening – of austerity. Coordinated strike action on pay, attacks on terms and conditions, increasing workload and in defence of services would win mass support. As the socialist-led Glasgow City Unison is proving, militant trade union action can offer a real alternative to cuts. Of course, this must be linked to standing and electing councillors and MSPs who’ll oppose all cuts and lead the fight for a return of the £3 billion that will have been cut from Scottish public by 2019.

MSPs and councillors must defy Tory austerity and set no cuts budgets

Text of Socialist Party Scotland leaflet

There is no end to the cuts facing public services, wages and benefits in Scotland. Recent reports have laid bare the ongoing nightmare of under-funding and continued austerity.

Scottish health boards face combined deficits this year alone of £500 million. After cuts of almost £500 million this year, and the loss of 7,000 jobs, councils are expecting cuts of at up to £1 billion over the next three years. In addition, the Tory Autumn Statement delivered a crushing £550 mil- lion per year in lost income due to continued freeze on benefits.

The Institute for Public Policy Research (IPPR) Scotland estimate that overall cuts to the Scottish Government’s resource budget will be £800 million by 2019-20. Because the NHS and other areas of spending are “protected”, the scale of cuts facing Scottish councils is very likely to be of a level not seen before. With elections to all 32 Scottish councils taking place in May 2017, the attention of trade unionists, socialists and anti-austerity campaigners will increasingly turn to a discussion on what is needed to defeat this tsunami of cuts.

The starting point for such a discussion has to be that the current policy of the Scottish Government and the 32 council administrations is a bankrupt failure. Their “strategy” has been to pass on every single penny in Tory cuts to workers and communities, making a mockery of their – SNP and Labour – claims to be opposed to austerity. In addition, councils are increasingly turning to privatisation and the use of “arms-length companies” to cut costs, leading to the undermining of workers’ rights and terms and conditions.

Socialist Party Scotland and the Trade Unionist and Socialist Coalition (TUSC) offer a real fighting alternative to cuts. The central plank of a viable anti-austerity policy today has to be mass mobilisation of the trade unions and communities and linked to this the drawing up of “no-cuts” budgets in Holyrood and council chambers across Scotland. There are number of elements to a no-cuts budget – supported by local government trade unions in Glasgow and Dundee – but the main ones are:

Reserves

The Accounts Commission reported that as of 31st March 2016 Scottish councils had £2.5 billion in useable reserves, including general funds of over £1.1 billion. If councils came together and used those re- serves to refuse to make cuts over the next two years, reserves would fall to £165 mil- lion. Reserves are supposed to be used in an emergency or for unforeseen financial shocks. Austerity is a financial shock on steroids and councils can and should use every power they have set a no-cuts budget as a springboard for a mass campaign to win back what has been stolen.

Borrowing powers

Councils have prudential borrowing powers and now the Scottish Government also have significant borrowing powers for in- vestment and capital spending. If, for example, the Scottish Government and Scottish Councils came together and used these powers this would be additional way of avoiding making cuts. It’s often argued by cuts politicians that these borrowing powers are only for capital investment and not day-to-day spending. But the use of capitalisation (that is transferring elements of revenue spending to capital) would allow councils to mitigate cuts through this and other financial mechanisms.

Debt

Total local government debt in Scotland is £15.2 billion at a cost of £1.5 billion a year in debt repayments. Much of the debt arises from, for example, the building of council housing in the past and more recently arising from rip-off PFI/PPP contracts. We demand all of the historic housing debt be written off and an urgent renegotiating/writing off of the rest, especially important given the low level of interest rates today. Why should private companies make hundreds of millions in exorbitant profit through PFI/PPP schemes? The Scottish Government can play a key role in ensuring this is done.

Tax

With new tax powers coming to the Scottish Government this year the potential exists to raise extra revenue to fund public services. We would support an increase in the top-rate of tax from to at least 60% as a first step. In addition, we oppose any increase in the council tax or the basic rate of income tax, which would hammer ordinary workers who have seen big cuts in their wages already as a result of wage restraint and pay caps. We also campaign for the scrapping of the council tax and its replacement with a wealth tax that reflects the ability to pay.

By using a combination of all of these measures, the setting of a legal no-cuts budget by councils and the Scottish Government is perfectly possible. These 100% anti-austerity budgets would only be the start. They would be a springboard for a mass campaign of community and trade union mobilisations to demand, as a first step, all the money back that has been stolen in austerity since 2010. If the Scottish Government and a number of councils united together around this common goal it would have a huge impact, and could begin to turn the tide against the cuts tsunami.

Between 1983 and 1987 the socialist council in Liverpool refused to make Thatcher’s cuts and build a mass movement in the city, including two one-day general strikes of the council workforce and mass demonstrations. Thatcher was defeated in 1984 by this militant stand and tens of millions was won in extra fund- ing for the city.

Today, what has been lacking is the political will to defy austerity and defend work- ing class communities across Scotland. It’s for that reason that Scottish TUSC and others are going to be standing as widely as possible in the elections in May 2017 on this 100% anti-austerity manifesto.

Come to the Scottish TUSC confer- ence on 25th February 1pm-4pm Renfield St Stephens Centre, Bath Street, Glasgow