By Julie Hyland
11 April 2015
Scotland’s first minister, Nicola Sturgeon, has said that she could introduce full fiscal autonomy for Scotland within a year of the May 7 general election.
Sturgeon, leader of the Scottish National Party (SNP), made her remarks during the second televised debate between Scottish party leaders in Aberdeen on Wednesday night. Broadcast on BBC One, Sturgeon was joined by Patrick Harvie (Green), Jim Murphy (Labour), Willie Rennie (Liberal Democrat), David Coburn (United Kingdom Independence Party-UKIP), and Ruth Davidson (Conservative).
Sturgeon said the SNP would push for complete control of taxation and spending in Scotland, “as quickly as the other parties agree to give it,” and would vote for it in the next Westminster parliament.
She has previously avoided confirming that the SNP would press for “devo-max” after the May 7 election. This would mean ending the Barnett formula, under which funding is centrally allocated throughout the UK, making Scotland dependent on the revenues it raises locally.
The SNP is expected to be the prime beneficiary of a collapse in Labour support in Scotland. With Labour and the Conservatives polling neck-and-neck, the makeup of the next government could be determined by the ballot in Scotland.
The SNP has positioned itself as kingmaker. Following the defeat of last September’s referendum on Scottish independence by 55 to 45 percent, it has played down talk of separation as it seeks to win support among workers and youth taken in by its anti-austerity stance but otherwise opposed to independence.
Its main appeal has been that only a strong vote for the SNP in Scotland could keep the Conservatives out of office after May 7. Labour and the SNP could combine with other “progressive” parties, it claims, to block a Conservative administration in the event of a hung parliament.
In the first televised debate in Edinburgh Tuesday evening, which was restricted to the SNP, Labour, Liberal Democrats and the Conservatives, Sturgeon said she was “offering to make [Labour leader] Ed Miliband prime minister.” The SNP would keep Labour “honest,” she claimed.
This is despite the SNP itself highlighting that just weeks before the dissolution of parliament, Labour joined with the Conservatives and Liberal Democrats to back a further £30 billion in spending cuts.
Labour has so far rejected the SNP’s entreaties. Publicly, it claims that it is capable of winning an outright majority, without the nationalists’ help. The possibility of an SNP-backed minority Labour administration is the main plank of Conservative propaganda, arguing that this would produce an unstable government that would be “punished” by the financial markets.
Sturgeon was booed by sections of the audience in the first debate when she said that the call for another referendum on Scottish independence would not feature in the SNP’s manifesto for May 7, but refused to rule it out in the manifesto for elections to the Scottish Parliament in 2016.
The 2016 elections are “another matter,” she responded. Two years ago, Sturgeon had said that the vote on independence was “a once in a generation thing.”
Murphy used her statement to accuse the SNP of opening a “black hole” in Scotland’s finance in Wednesday’s debate. Ending the Barnett formula would leave an immediate £7.6 billion shortfall, he said. While denouncing Westminster austerity, the SNP would have to implement massive spending cuts of its own, he argued.
Home Rule featured heavily in the second debate, which was held in Aberdeen, home to much of the UK’s North Sea energy industry. During last September’s referendum, the SNP had claimed “Scottish oil” would provide the basis for an independent Scotland to break free of Westminster austerity. Since then, oil prices have collapsed by almost half to around $60 a barrel. Some 10,000 jobs in the energy sector have already been lost, mainly in Aberdeen. Many more are anticipated as the oil and energy companies attack pay and conditions.
Just hours after the Aberdeen debate, Royal Dutch Shell announced that it had paid £47 billion for the exploration firm BG—the largest deal of its type for several years. The two firms, which employ nearly 3,000 workers in Aberdeen, said the move was necessary to ensure greater efficiency and reduce costs. A Shell representative said that “quite a few hundred” jobs would be lost.
Murphy exploited the oil crisis to attack fiscal autonomy, stating that the SNP’s own financial advisers, business leaders and “most importantly, trade unions say it will leave a black hole.”
“After the difficult time that Aberdeen and the north-east of Scotland has been through, the idea that we voluntarily give up the pooling and sharing of resources, the ability to transfer money across these islands. I don’t think it makes sense,” he said.
Labour’s plans for a so-called mansion tax would affect just 0.3 percent of Scots, he said, whereas there would be “tens of millions of pounds of money coming from London and the south-east.”
The tax is in reality a paltry sop. Aimed at houses worth £2 million and above, it applies to fewer than 0.5 percent of homes in the UK and will raise just £1.2 billion. In March, to cross-party approval, the government handed some £1.3 billion worth of aid to the energy companies, announcing a cut in the Supplementary Tax on oil firms’ profits from 30 to 20 percent, the reduction of Petroleum Revenue Tax from 50 to 35 percent and other “generous” tax allowances.
The fractious debate in Aberdeen concealed that only the addition of the xenophobic, anti-European Union UKIP candidate enabled the others to pose as “progressives”.
Murphy’s shedding of crocodile tears over the victims of welfare benefit sanctions was especially nauseating. A member of the neo-liberal, pro-interventionist Henry Jackson Society, Murphy played a lead role in both the Blair and Brown Labour governments—voting for the Iraq war and the introduction of university tuition fees.
Davidson made explicit that the Conservatives are intent on far greater spending cuts should they win office on May 7. This was necessary to pay down Britain’s debt, she said—a debt incurred by the £1 trillion bailout of the UK’s banks and super-rich in 2008, repayments on which have gone directly back to the self-same architects of the financial crash.
But “debt reduction” is the mantra of Labour and the SNP alike, who differ from the Tories only as to the speed of implementation.
Murphy played up Labour’s commitment to raise the minimum wage to just £8 by 2020 as a part of ending the “disgusting” scandal of low pay. He studiously avoided answering a question by a local authority worker in the Edinburgh audience whether Labour would end the five-year freeze on public-sector pay.
Sturgeon was also keen to emphasise the SNP’s fiscal credibility. The SNP’s plans for “modest” spending increases would not jeopardise paying down the fiscal deficit, she said, which would take just “two or three years more” to complete.
Noteworthy also was Harvie’s response to the question of what was the Green’s “red line” for supporting a government.
Harvie said the Greens would not support a government “willing to repeat the disastrous neo-liberal economic model that has allowed wealth to be hoarded by those that need it the least while those in the greatest need are left stranded.”
Asked by the moderator in Aberdeen if this meant he would not be prepared to support a government that was based on capitalism, Harvie floundered and laughed nervously.
“I think there genuinely needs to be a re-evaluation of the nature of our economics,” he said. “There is a fundamental problem with the nature of modern capitalism as it stands at the moment, finance capitalism where so much of our economy is owned by the finance industry.”
Pressed again on whether this meant the Greens would not collaborate with a capitalist government, he said, “It’s that word, a red line. I’m not sure that’s meaningful.”
In the last Scottish parliament, the Greens had found “genuine areas of common ground” to work with a minority government, even though they had areas of disagreement, he said.