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Socialism Today 126 - March 2009

SNP exposed as the recession bites

THE SECOND anniversary of the coming to power of the Scottish National Party (SNP) government approaches. With Scotland gripped by a deep recession, the SNP is responding by moving to the right and jettisoning some of its more progressive policies. The SNP government has abandoned plans to scrap the widely despised council tax, which was one of its key flagship policies and, moreover, a policy that played an important role in their election victory in May 2007. Alongside reneging on the promise to write off student debt in Scotland and the resurrection of PFI/PPP to build some public infrastructure projects – despite promises to scrap (in reality, modify) the use of private finance – the largely phoney radicalism of the SNP is being exposed.

These policy reversals, taking place at a time of deepening economic crisis and rapidly rising unemployment, underline the inability the SNP to offer any alternative to the capitalist market. The SNP has not benefited politically from the capitalist crisis. If anything, it has been exposed to a greater degree than at anytime since it came to power and particularly after the sky fell in on the banks last autumn. This is some feat given the huge opposition to the failed and discredited New Labour government led by Gordon Brown and Alistair Darling.

The SNP’s economic model, the so-called ‘arc of prosperity’ of Ireland, Iceland, Norway and an independent Scotland, has become the arc of insolvency. Iceland is in the grip of a national bankruptcy, while Ireland has gone from ‘Celtic tiger’ to economic basket case in less than a year.

The SNP leadership, including first minister, Alex Salmond, has a very close relationship with many of Scotland’s top bankers. Salmond is a former economist with the Royal Bank of Scotland (RBS). Former RBS chairman, Sir George Mathewson, chairs the Scottish government’s council of economic advisors. Salmond described the now battered and insolvent HBoS as a "very well capitalised bank", blaming spivs and speculators for short-selling HBoS shares leading to its demise, rather than the greed and incompetence of the bank’s own executives. The SNP had hoped to build its ‘smart and successful’ Scotland on a thriving financial services sector. These events have left its plans in tatters.

Financial services have taken a battering. The takeover of HBoS by Lloyds/TSB is expected to result in at least 7,000 jobs lost. RBS are expected to cut at least 25,000 jobs, more than 2,000 of them in Scotland. One in three of all new jobs created over the last seven years have been in the finance sector, which now employs 86,000 people. It is expected to collapse by 10% this year. The credit crunch will have a devastating effect on workers’ jobs.

The construction industry is becoming a desert – 26,000 jobs have already gone with another 100,000 in jeopardy. New home starts have fallen by a colossal 86% in the last year, while 86% of construction companies and 67% of retail firms have reported falls in contracts and sales leading to thousands of lay-offs and redundancies.

The SNP blamed the lack of a majority in the Scottish parliament for its decision to give up on its promise to end council tax. However, it was clear that the recession and the planned huge public spending cuts were key factors in its decision. As the International Socialists pointed out, the SNP’s planned replacement to the council tax, the local income tax (LIT), was going to raise around £750 million less in revenue than the council tax. With the Westminster government refusing to assign current council tax benefit – £400 million – to help fund LIT, there was a huge hole in the SNP’s plans. The SNP’s local income tax was different to the parliamentary bill for a Scottish service tax presented by the then MSP Tommy Sheridan in 2002. Rather than tax the rich more while raising more money for public services, which Tommy Sheridan’s bill would have done, the SNP’s LIT plan was going to be levied at 3p in the pound for all workers, leaving a huge shortfall in revenue.

This deficit was made worse by Darling’s demand for swingeing cuts – described as efficiency savings – in public spending in 2010 and 2011. For the Scottish government, that will mean slashing £500 million a year from the Scottish budget. It is for this reason that the SNP gave up on scrapping the council tax, although a freeze on council tax is still in place for now.

For the SNP, defying cuts in public expenditure and building a campaign to win resources to fund decent public services is not an option it is prepared to contemplate. At a time when hundreds of billions of pounds in public money is being used to bail out the banks, a mass campaign to demand our bailout to safeguard jobs and services, including demonstrations and strike action, would get a huge response from working-class communities, public-sector workers, and trade unionists in general. This was the approach that the Liverpool city councillors took in the 1980s when they refused to make the cuts that the Thatcher government demanded. Instead, they built a mass campaign among the working class of the city and won extra resources to build homes, improve education and create jobs.

The SNP, in contrast, is quite prepared to implement the cuts at a local and national level. It is taking the axe to jobs and services in the councils it forms part or all of the ruling administrations. The ‘responsible’ SNP government in Edinburgh is also demanding 2% efficiency savings, ie cuts across the public sector. It has imposed below inflation pay deals on its own low-paid civil servants while supporting wage cuts on Scottish local government workers who were on strike last year.

As a result, there is a growing questioning and opposition to the actions of the SNP, which is being exposed as a pro-business and anti-working class government. New Labour offers nothing except the increasingly likely road to the return of a Tory government led by David Cameron. There is no sign of a Tory revival in Scotland. The Tories may do well to hold on to the one Westminster seat they currently have in Scotland. It is possible therefore that, in a desire to prevent the return of a Tory government, Labour’s support in Scotland could hold up or increase. However, if a Tory government seems inevitable, the SNP could also gain, despite its policy failures.

Support for independence has been held back. There are increasing doubts about whether an independent Scotland could be viable against the backdrop of the biggest economic crisis since the 1930s, a dramatic fall in the price of oil, and a severe contraction in the banking and financial sector. These doubts are likely to remain a big complication for the SNP as the recession worsens. For many workers, even those sympathetic to independence, the SNP's inability to provide any answers to the deepening economic crisis can undermine support for independence, currently standing around 38%. However, the election of a Tory government could alter that situation and would be likely to produce a surge in support for independence and/or a Scottish parliament with more extensive powers, given the memory of the last period of Tory rule. Between 1979 and 1997 the national rights of the Scottish people were trampled on and Tory policies produced a resurgence of the national question.

For trade unionists, young people and the working class generally the political choice is between the devil and the deep blue sea. The screaming urgency to build a mass working-class and socialist alternative to the capitalist parties is clear in Scotland, as it is across Britain. The International Socialists support the building of such a party and we welcome the discussions that have been taking place among leading trade unionists and socialists in Scotland with a view to convening a national meeting to clarify how the left and socialist ideas can be strengthened. This is an urgent and necessary task. At the same time, we will be actively involved in helping to build Solidarity – Scotland’s Socialist Movement, and the Youth Fight for Jobs campaign.

The scandalous decision by the Scottish Crown Office, ‘under incredible pressure’ from Lothian and Borders police, to pursue a libel trail against Tommy and Gail Sheridan also requires all socialists and class-conscious workers to fight this brutal vendetta by the enemies of socialism and working people. It is clear that massive state resources are being brought to bear to try and destroy Scotland’s best-known socialist. In particular, this onslaught is designed to extract revenge for Tommy Sheridan’s role, alongside many other members of Militant, in the defeat of the poll tax and the injuries inflicted on the ruling class by that mass movement. But these attacks will not save their system nor will it prevent a new generation from finding a road to the ideas of socialism and Marxism in the months ahead.

Philip Stott

International Socialists (CWI Scotland)


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