With the country facing economic armageddon, the SNP must end its high-tax mania
EVEN in the best of times, the SNP was remarkably cack-handed when it came to domestic policy. With attention elsewhere during the pandemic, some of its most egregious failures have fallen off the radar.
But stewardship of the economy was perhaps the most unforgivable of its deficiencies – evidenced by sluggish or indeed non-existent growth.
Defined by punitive taxation and sky-high business rates, it was an agenda that seemed at every turn to militate against the chances of success for any commercial enterprise.
Households felt the squeeze, too, as pay packets suffered disproportionate damage, with the SNP hell-bent on rejecting Westminster tax cuts and ploughing its own, more destructive, furrow.
Now, as fiscal disaster looms and a tenth of Scots are facing the dole, the stakes are much higher, and it has taken ministers far too long to wake up to the threat.
The continuing ‘debate’ about independence has been muted by the pandemic, but has never seemed more absurd – would a post-Union Scotland have funded furlough for a third of its workforce? (And it wouldn’t have handed big pay rises to civil service mandarins, either – but then again, old habits die hard.)
The theoretical discussion of the currency of an independent Scotland seemed Tolkienesque before lockdown; now it seems insultingly stupid.
Meanwhile, catastrophe gathers pace with each passing day, and tourism – worth £10.5billion to the Scottish economy – is bearing the brunt of the initial shockwaves.
The chain of Scottish hotels which owns Crieff Hydro, Peebles Hydro and Ballachulish Hotel has given notice that 241 staff face redundancy at the start of August, more than a quarter of its workers.
Lost revenue amounts to at least £17million for the group in the current financial year, and for every month closed, the bill for keeping buildings safe and insured is £500,000.
Hundreds of jobs are also under threat at five Scottish luxury hotels run by the InterContinental Hotels Group, which has started redundancy consultation with staff in Edinburgh and Glasgow.
Beyond tourism, around 700 staff at Rolls-Royce in Inchinnan, Renfrewshire, are set to lose their jobs as a result of the pandemic – more than half of the 1,300-strong payroll.
Hundreds of workers are also facing redundancy after three separate firms announced plans to close factories.
Jedburgh in Roxburghshire is facing a double blow after Mainetti, the clothes hanger maker, said it would transfer work to its site in Wales, with close to 100 staff at risk of losing their jobs.
LS Starrett, which makes tools and other components, opened its plant in the town in 1958 but has started a redundancy consultation, with about 100 manufacturing and support roles at risk.
Turmoil
And laundry firm Fishers is to close its operation in Perth, with more than 80 employees being made redundant.
It’s a grim roll-call, and it’s set to lengthen in the coming months: as Stuart McIntyre, head of research at the Fraser of Allander Institute, has made clear, there is ‘turmoil ahead – now isn’t the low point for the economy’.
Yet it’s hard to detect any sense of urgency in the Scottish Government response.
A news release published last week was headlined ‘gradual recovery from Covid-19 crisis expected’, although it also disclosed that unemployment could increase to ‘more than 10 per cent this year’, and conceded that ‘significant uncertainty in the economic outlook remains’.
The idea of ‘gradual recovery’ doesn’t seem all that compatible with some of those dire predictions. Nor does it chime with earlier forecasts of a projected slump of a third in GDP, or warnings that we’re heading for the biggest crash since the Great Depression.
The lack of a precise timescale for the reopening of shops and the housing market hasn’t helped, as businesses have warned they are still ‘in the dark’ over when they can begin trading again.
They rightly fear being left behind – because retailers in England and Northern Ireland know when they can get their businesses back to work.
From yesterday, furniture, electrical and phone shops were allowed to welcome customers in Northern Ireland, while in England all nonessential retailers will be able to open on Monday, June 15.
Yesterday, the First Minister signalled she was ‘optimistic’ phase 2 of easing lockdown in Scotland could go ahead from June 18 – meaning that, for example, pubs and restaurants could operate outdoors.
Factories and warehouses should also be able to open their doors again, with social distancing in place.
Individual local authorities are devising clever plans for partial restoration of normal business, such as the proposed reopening of pub gardens this month in Glasgow.
If phase two does kick in on June 18, it won’t be a moment too soon.
The Scottish Retail Consortium warned in yesterday’s Mail that a failure to reopen shops in coming weeks could have a ‘significant detrimental impact to town centres and high streets’.
Some 750,000 Scottish jobs have been affected by the lockdown, with workers furloughed, or self-employed people unable to work.
South of the Border, ‘unlockdown’ is moving at a more rapid pace, and the UK Government is planning a series of measures to jolt the economy back into action. A £1.5billion scrappage scheme could increase car purchases, while road upgrades and infrastructure investment will be prioritised. It’s important that none of these actions triggers the dreaded ‘second spike’ in coronavirus, though reassuringly yesterday, for the second consecutive day, no Covid-19 deaths were reported in Scotland.
Yes, a surge in the virus must be avoided – but it’s also true that lockdown itself carries a terrifying cost which, for now, is incalculable.
When furlough payments end, many won’t have jobs to go back to: this twilight period is the calm before a storm of awesome proportions. But it isn’t just giving the green light for businesses to reopen that will help to limit the economic fallout from lockdown.
Vulnerable
Education has been treated as an optional extra, but the price of getting these decisions on home learning and reopening schools wrong could be extremely high; you can’t run an economy without skills and training.
It’s strange that we can countenance reopening beer gardens while the schools stay shut (even when the science indicates children are least vulnerable to Covid-19, and poor ‘transmitters’ of it).
And it’s vital that whatever tax reductions are proposed by Chancellor Rishi Sunak are replicated here.
The fig leaf of ‘social justice’ was used to justify tax hikes before lockdown, but it was always unconvincing; any further increase would put intolerable pressure on salaries – many of them already depleted by virus-related cuts.
The Nationalists’ statist mindset must give way to a recognition that the NHS we’ve all worked so hard to protect can’t exist if the economy founders.
This is an opportunity for Nicola Sturgeon’s government to stop living in the fantasy land of constitutional politics and rebrand itself as an administration devoted to heading off total economic meltdown.