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More Tory and SNP austerity for Scotland

24/3/2015

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George Osborne's final budget was long on spin, but short on substance. And it comes with a big sting in the tail for Scotland's public services.

Listening to the Chancellor you wouldn't have thought we have had the worst fall in real earnings in recorded history a total fall of 7.9%. No other real earnings decline comes close. The IFS says his tax and benefit changes since 2010, including the big VAT rise, have cost families on average £1,127 a year. Nearer £2000 if you are a public service worker suffering from the UK and Scottish government pay policy.

For public services, the OBR confirmed that the spending squeeze becomes much more severe than anything we have seen to date in 2016-17 and 2017-18. While the Barnett consequentials are difficult to calculate precisely, it looks like a another £2bn of cuts and a further 30,000 public service job cuts.

The SNP's attack on the budget is less than credible when you consider their Full Fiscal Autonomy plan would impose even greater austerity on Scotland. On Brian Ashcroft's very measured assumptions; "If we assume that under FFA Scotland could have been able to borrow to fund a deficit the equivalent of the UK’s 5.6 per cent – which would have been a tall order for a sub-state government, or an independent Scotland, at the same borrowing rate as the UK – then a further £3.8 billion would have had to be funded by higher taxes and lower public spending."

£3.8 billion amounts to half the education & training budget and one third of the health budget - between 50,000 and 60,000 public sector job losses.

And this isn't just about recent oil revenues, it goes much deeper as this chart shows.
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The SNP response to this is economically illiterate. They claim that FFA will grow the economy, including a 50% increase in exports. At the risk of 'talking Scotland down' there isn't any indication as to how this amazing, record shattering growth is going to be achieved.

We know the Tories want to slash spending, not because they have to, but because they want to. As Ed Miliband said in Clydebank this week; "These Tories have their own vision. They believe that wealth comes just from a few at the top. Because he believes in a smaller state. The market left to run riot. Working people left to fend for themselves."

True, but the SNP plans could be even worse. Only Scottish labour can credibly claim to be Scotland's anti-austerity party.
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