THE SNP budget for 2018-19, which passed with the support of the Scottish Greens, draws a stark line between the mainstream conservative economic policies of the SNP and what is now offered by the Scottish Labour Party.
Even though he has only been in office for two months, Richard Leonard has transformed Labour’s approach to Scotland’s economy from a timid managerialism to one that challenges the fundamental tenets of neoliberalism.
The SNP is using its powers to make changes to the tax system in Scotland, but it is not prepared to offer fundamental redistribution of wealth.
The Scottish Greens are giving themselves a great pat on the back, but the concessions they achieved — an additional £170 million for local councils and public sector pay rises applying to 75 per cent of workers rather than the 51 per cent originally proposed — will do nothing to bring an end to deep-seated austerity.
Nicola Sturgeon must look at the new Labour leader and realise that he is an existential threat to her appeal to the left. Her claim made at that 2015 SNP conference that she was leading a “left-of-centre social democratic party” sounds even less convincing.
Responding to Scottish Labour’s radical alternative to the SNP budget, Finance Minister Derek Mackay was reduced to the age-old insult that it was “scribbled on the back of a fag packet” and some changes would require legislation and so couldn’t be introduced immediately.
Sturgeon’s response was reminiscent of May’s magic money tree. She said: “It is as though Richard Leonard is suggesting that we fund our NHS through Monopoly money.”
Scottish Labour’s alternative budget called for redistribution not just of wealth but of power.
On income tax it proposed reintroducing the 50p rate on people earning more than £100,000 and to match the SNP proposals to reduce the basic rate for those earning under £13,851. It introduced a 41p levy for those earning between £42,386 to £60,000 and 45p for those up to £100,000.
It proposed £545m for the protection of lifeline services, an additional £100m for the NHS, an additional £5 in child benefit and a fully funded pay settlement. It also proposed greater powers for local government, including the ability to levy a tourist tax and a land value tax on vacant properties.
The SNP faced angry accusations that it had failed to implement a £5 increase in child benefit after a campaign exposing the plight of 260,000 children in Scotland living in poverty.
Elaine Smith MSP argued in her speech on the budget that, “after 10 years in office, is it not time that the SNP used the powers of this parliament to their full extent to redistribute wealth and power, eradicate poverty and create a fairer Scotland for the many?”
It is important to understand that Scottish Labour’s proposals are not just about this year’s budget. The plans go much further than that and aim to introduce radical alternatives to SNP acceptance of Tory austerity and an economic system that tolerates gross inequalities and poverty.
In a recent speech Leonard stated: “Scotland needs to be bold on extending public ownership. That is why Scottish Labour will
work proactively with local councils to develop and deepen municipal ownership in public services like buses, social care, building and energy.
“Introduce an Industrial Reform and Common Ownership Act to give workers a statutory preferential right to buy an enterprise when it is up for sale or facing closure.
“Support the development of co-operatives and place Co-operative Development Scotland on a statutory footing.
“Create a National Energy Company to facilitate and expand community, co-operative and municipal-owned energy generation that builds in democratic control of our energy sector, where surpluses will be used to reinvest in infrastructure and tackle fuel poverty by keeping energy bills down.
“Labour’s budget for real change will be underpinned by the values which I want Labour to take into government.”
Leonard made this speech in Dundee where he explored the challenges that working people there had faced over the previous century.
Dundee, he said, “is a fitting place to consider where the balance of power is today in our economy and in our society and it is a fitting place to consider what we can do, what I believe we must do, to tilt the balance more in the favour of working people.”
Labour, both in Scotland and in Britain, must address this balance of power as a matter of urgency. It cannot wait to be in power to formulate its strategy for change.
It should start the debate by encouraging Labour, trade unionists and community activists to explore how we can shift power in our institutions to give real power to the people.
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