FOR nearly a decade we’ve kept up some convenient fictions about austerity. Every party in Scotland, barring the Tories, has been more-or-less rhetorically against the programme of cuts, and they have competed for dominance of the “anti-austerity” vote. But this opposition concentrated on the most obviously detestable features of the Conservative programme: the bedroom tax, the broader welfare “reforms”, and NHS privatisation. The main financial bulk of the cuts programme came in the public-sector pay freeze followed by the one per cent cap and, on that topic, there was silence.
These cuts went unchallenged because the whole anti-austerity camp in Holyrood was complicit in them. Pay is a devolved issue, implicating the SNP and, more recently, the Greens; Labour are also implicated by, under previous leaderships, having broadly accepted most welfare reforms and the pay freeze; while the less said about the LibDems the better. For all parties, pushing it would involve mutually assured obloquy.
Nonetheless, at times the issue did arise, and when it did, so did high-level political silliness. Consider the unedifying case of Claire Austin, the nurse who pressed Nicola Sturgeon on the pay cap and was rewarded with an onslaught of largely false accusations that reached the press.
This display of bad form did little for the reputation of nationalism. However, the silliness of some online Scottish justice warriors was outdone by Ruth Davidson, who defended the nurse’s criticisms of the pay cap even though the policy is – or was – quintessential Tory economics.
That incident demonstrates the childishness that results from a mixture of bad policy and two-bit sophistry. Ruth Davidson – a Conservative, remember – posed as the principled opponent of the pay cap, while the SNP’s “my party right or wrong” faction announced that anyone criticising the pay cap was a disguised Tory. Even trying to put this Orwellian contradiction into words gives me a migraine.
Suddenly, though, it looks like the smoke of this strange era is clearing. Labour, followed by the Greens and SNP, have openly confronted the pay cap. Since Corbyn’s success in the election things are changing fast, and now most of the Conservative Cabinet wants Theresa May to slaughter this most sacred of austerity cows.
But the job isn’t done yet. The Tories want to compromise by lifting caps on a “case by case” basis. Cuts to fire services, police officers and nurses are becoming major political problems for them in an era of emergencies, so they are looking to make a distinction between these “essential” service workers and everyone else in the public sector.
The Tories are hoping to trade on the myth of public service workers as faceless bureaucrats with easy career tracks, fat salaries and gold-plated pensions.
But we’re talking about one in four Scottish workers, not Yes Minister. Most people defined as public and civil servants do essential work while suffering from chronic low pay to the degree that many have resorted to food banks.
Breaking the pay cap is a crucial battle, but we must remember that so much damage has already been done.
There’s already been a 20 per cent reduction in real wages, and inflation is rising at alarming rates. Unless public sector pay, across the board, rises in line with inflation, we’re still in an era of austerity.
Now that we’re finally admitting the problem, the Scottish Government should come under scrutiny. Derek Mackay rhetorically opposes the pay cap, but wants to keep it in place for another year, under conditions of fast rising inflation. This decision will pile damage upon damage.
Ultimately, the pay cap is his call and always has been. We can wish this problem away with the rhetoric of independence, but the Scottish Government must release a detailed plan of how independence will improve public finances or the problem remains.
One answer might be a spurt of Keynesian economics. Scotland’s economy has endured a decade of slump, as the Fraser of Allander Institute showed last week, and a traditional solution is to pump more money in.
Independence might offer more leeway here. However, you’ve got to square that with the EU, who are now demanding zero per cent deficits under their increasing stranglehold by German neoliberalism.
Tax rises are another option. But while the SNP remains wedded to the Laffer Curve – a Dr Seuss notion where higher taxes mean lower revenue – that policy remains out of bounds.
A final option is to push the Tories out of power and to form a Labour-led coalition with a redistributive agenda. This seems increasingly possible, and it would give the Scottish Government more room on the budget, but it would be rabidly opposed by the economic elites of Britain. It would also raise doubts about the existential purpose of Scottish independence.
Whatever happens, we’ve got to accept some culpability for living standards in Scotland. All things remaining equal, there’s another decade of regression ahead. Growth is going to limp along, regardless of whether we’re Scottish, British or European.
Trickledown economics never really worked, and it’s a doubly silly notion when there’s nothing left to trickle down. For politicians willing to face the hard reality of our crisis, that leaves just two options: redistribute or reverse.
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