SNP must ditch tribal instincts and tackle economic disaster

THE price tag of the UK’s furlough is astronomically high, at more than £30billion and counting. It was crucial life support but the plug is about to be pulled and the coming months will be painful.

Some of those emerging from this weird period of enforced hiatus may well discover their job no longer exists. And there are dire predictions of a Great Depression-style downturn that will propel unemployment as high as 10 per cent.

It could hardly be a more sobering prospect, yet Nicola Sturgeon’s latest mantra, dutifully parroted by her ministers, is simply to demand yet more furlough.

Hypocrisy doesn’t quite cover it: one minute they’re revolutionaries agitating for an end to the oppressive British state, the next they’re asking their Westminster overlords for more cash.

The problem is it’s unsustainable: we can’t go on indefinitely keeping people out of the dole queue with handouts for staying at home.

Against this backdrop, the First Minister is unveiling her Programme for Government today, a bid to hit the reset button after a tumultuous few months.

Complacent, blundering, unaccountable, and still consumed by a constitutional mission that underpins its every move, what this administration really needs is to be replaced, not reset.

Heavyweights such as Mike Russell and Roseanna Cunningham are bailing out after long careers, leaving a rump of placemen and under-performers. Stripping out some of that dead wood would be a start, though you might wonder who’d replace them.

Recession

Few in the SNP ranks have had successful business careers beyond the parallel universe of Holyrood.

Health Secretary Jeane Freeman will soon end her calamitous reign when she steps down as an MSP; it’s worth remembering she was once a card-carrying Communist.

There’s limited evidence that Miss Sturgeon really grasps the scale of the challenge that lies ahead in postfurlough recession, in which her pitch for independence will become ever less tenable.

In July, the Fraser of Allander Institute reported that more than half of Scottish businesses were planning to cut staff once furlough ends. The report also revealed the majority of Scottish firms expect to operate at only about 50 per cent to 75 per cent capacity until at least January.

At the same time, about half of those businesses have sharply increased their borrowing since March in order to survive the pandemic.

Miss Sturgeon can’t depend on her cabinet cronies, devoid of business nous, but she can turn to her economic guru Andrew Wilson, mastermind of a commission which dreamt up ideas for imaginary currencies. And she has former banker Benny Higgins on her team to help with drawing up a plan for something called a ‘wellbeing economy’.

But his performance alongside Miss Sturgeon at one of her daily briefings – when he quoted Nelson Mandela and cautioned against a relaxation of the two-metre rule for bars and restaurants – didn’t inspire much confidence.

Even he admits ministers have failed to engage with business leaders, but many employers are disillusioned, and no wonder.

You might remember the Scottish Growth Scheme, Miss Sturgeon’s ‘£500million vote of confidence in Scottish business’, which managed to allocate less than a third of the cash promised. And what about her publicly owned energy company that would end fuel poverty? Well, so far £400,000 has been spent on this and there’s still no sign of a company being set up.

The Scottish National Investment Bank will cost hard-working families a cool £2billion over the next ten years – and its directors will pocket £850 a day.

So the omens for the kind of vision needed to restart the economy aren’t good.

In the short term, Miss Sturgeon needs to devise a plan to get white-collar staff back to their desks: home working is not viable in the long term, unless we want permanently atrophied urban centres.

We’re constantly reminded by the SNP that we do things differently here, and for all its grumbling about not having enough powers there is scope for a departure from the Leftwing statism that has defined devolved politics for decades.

Boris Johnson, currently fending off Treasury mandarins lobbying for tax hikes, wants to root out government waste. That’s a raw nerve for the bloated behemoth of the Scottish public sector – and the well-remunerated quangocrats who stand to lose so much if a similar exercise were ever contemplated here.

Sky-high business rates and punitive personal taxation mean that there are automatic disincentives for business start-ups. Why not rip up this approach and provide a stimulus for the economy that would give an instant boost to entrepreneurs?

It’s one of the ironies of Nationalism that while it envisages an entirely new society, it remains wedded to distinctly old-fashioned economics: raiding pay packets using the fig leaf of ‘social justice’.

Renewal

Tellingly, Mr Higgins gave taxation a wide berth in his blueprint for economic renewal. Explaining his decision, he said: ‘We avoided taxation as a general rule. It was in some ways to depoliticise the report.’ That was an inexplicable omission: economic growth can’t happen without a tax overhaul.

The Scottish Government was handed control of stamp duty and introduced its own alternative Land and Buildings Transaction Tax (LBTT) in April 2015. Since then, families have been hammered with a £170million bill, and income from the tax has rocketed by 41 per cent.

In July, the tax gap between Scotland and England grew when Chancellor Rishi Sunak scrapped stamp duty south of the Border on the sale of homes under £500,000.

SNP Finance Secretary Kate Forbes refused to mirror his changes – but later said the Scottish Government would temporarily exclude houses under £250,000 from LBTT.

There are hopeful indications of green shoots in the property market – but they won’t last long without a review of LBTT.

Miss Sturgeon said yesterday she had been too busy to read proposals from new Scottish Tory leader Douglas Ross on the need for infrastructure investment, including plans for a major M8 upgrade. A knee-jerk SNP press release later condemned them as ‘utterly hollow’.

But there is a risk that unrelenting attention on the minutiae of managing Covid-19 clusters means ministers aren’t spending enough time on a longer-term strategy.

What about delivering proper broadband to remote communities? Earlier this year, ministers admitted a flagship pledge to deliver superfast broadband across Scotland will now be met at least two years late.

The £600million scheme has been delayed partly due to a legal dispute with a broadband provider, meaning it will be at least 2023 before all premises are connected.

The term public sector is now rarely deployed here without being followed by the word ‘incompetence’ – and a failure of political oversight is a common factor in one costly fiasco after another.

Will Miss Sturgeon now set aside her party’s independence crusade, cut taxes and turn Scotland into a magnet for investors and a crucible of innovation?

Don’t hold your breath: failure is ingrained and old habits die hard but we’ll all suffer if the SNP can’t find the courage to ditch its tribal instincts and work to head off a looming economic catastrophe.