Richard Murphy: Austerity in England means austerity in Scotland

Everything that she had said for years, and even her career before becoming an elected politician, suggested that she was a neoliberal politician dedicated to promoting the interests of wealth, large corporations, and of growth, irrespective of the consequences for climate change. Everything that she has done since being elected has confirmed this to be the case.

If rumours now spreading from what looked to be well-placed Westminster Treasury sources are correct, then it seems very likely that Rachel Reeves’s first budget, to be delivered at the end of October, will reveal tax increases (although since these only planned on the wealthy, they are bound to be modest); significant cuts to public spending, and continued pressure on benefits, including a refusal to review the two-child benefit cap wherever it applies.

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There are inevitable consequences. Most particularly, the funding supplied to Scotland for essential public services will continue to be restricted. Whatever the arguments about the competence of the SNP might be, no one should ever forget that they govern from Holyrood with two hands tied behind their backs by Westminster.

If the Government in London will not supply the funding required to deliver decent public services in Scotland then, ultimately, given the incredibly restricted and wholly inappropriate taxing powers devolved to Scotland, there is nothing that any government in Holyrood can really do to change the well-being of the people of Scotland. Austerity in England means austerity in Scotland, whether Scotland likes it or not. That is the issue that should really be at the core of the independence debate, and it is the job of the SNP is to remind Scotland of that, time, after time, after time.

If that was not bad enough, the general approach already seen from Reeves, which suggests that those who will pay for this austerity are the least well-off pensioners and vulnerable children, is a quite staggering indication of the current Labour Party leadership mindset.

I am old enough to remember when people voted Labour because they knew the party had what might be best described as a bias to the least well-off. Whether those least well-off were in that situation because of low pay, ill-health, old age, poor housing, poor education or the failure of an industry in the area where they lived, it could be safely presumed that Labour would at least try to do something to help those in need. They might not have always succeeded, but their bias towards the underdog and those in need was always apparent.

What is more, those with wealth were made to pay. Company tax rates often succeeded 50%, and personal tax rates were higher still for those at the very top of the earnings pile. The difference between those at the top and the bottom of the pile was also much lower in those days. Labour made a deliberate effort to redistribute wealth from those who had it to those who needed it, and by and large, it worked.

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It is now very clear that Rachel Reeves shares none of that thinking. She will very clearly not fund the public services that people need. Scotland will be hit hard as a result. She will not support the vulnerable; she has already made that clear. As we have already seen with the Winter Fuel Payment, the amount that the Scottish Government can do to prevent this harm is very limited.

And, as she has already made clear, there will be no increases in income taxes, national insurance, VAT on luxury goods (except school fees), or the company tax rate, meaning that the vast majority of the low tax rates that the wealthiest now enjoy will continue whilst she is in office.

I would like to resist the temptation to say “I told you so”, but I cannot. All of this was so predictable because it was hiding in plain sight for all to see. Reeves said all this for a long time before this election. All that happened was that some in Labour managed to convince the people of Scotland that somehow this was not what she would really do, and as a result, persuaded people to vote against what were their best interests.

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Let’s leave aside the fact that right now this means that there will be many who either already are, or will be soon, suffering with buyer’s remorse about voting for a Labour Party that is Tory in all but name. Let’s instead talk about what needs to be done about that.

What this requires is the creation of a distinct narrative on the response that is possible in Scotland given the assault on the well-being of the country that is going to happen over the next five years.

That firstly requires many of those who contribute to The National on economic issues to hone their messages so that the real alternatives can be defined. There are many available.

Secondly, this requires more broad-mindedness from the SNP, who, like Labour, have been far too neoliberal in outlook of late, and were most especially so during the Nicola Sturgeon era. If the SNP are going to offer any answer to Scotland they have to move very decisively away from this agenda that can never serve the best interests of the country, as 45 years of failure have now proved.

(Image: PA)

Third, whatever alternatives the SNP and other independence parties adopt have to be trumpeted loud and clear. And, I stress, this does not just mean within the Holyrood context. If, as I note above, English austerity is always imposed on Scotland, what all these parties have to make clear now is what would be different if only Scotland really was independent. What, otherwise, is their purpose?

Scotland should reject Rachel Reeves and her cruel economics. But that requires politicians who both know and show they can deliver something better. Are they available?