SNP’S command economy brings Scotland to brink of disaster
Scotrail cuts are the latest example of Sturgeon’s failed economic ideology, writes
Chaos at Scotrail is the latest twist in a torrid month for Nicola Sturgeon and her Scottish National Party. Less than two months after being nationalised at a cost of at least £4m, and days after launching a half-price offer to coax in travellers, the operator said it would cut services by a third from next week in a dispute with the unions.
Almost 700 weekday services will be lost, with further cuts yet to fall on weekend operations. It follows a string of disastrous efforts by the Scottish government to involve the state in business affairs, which is putting pressure on the country’s economy.
Liz Cameron, the chief executive of the Scottish Chambers of Commerce, says Scotrail’s issues are a new blow to the country’s companies. “When the Scotrail franchise was taken on by the Scottish government, businesses had hoped to see improvements to timetabling to better suit businesses and commuters, ensure that ticketing is accessible and affordable, and deliver network-wide improvements that drive up business use and support economic growth,” she said.
“Regrettably, just weeks into the new publicly owned franchise operation, the opposite is happening.”
It comes as the SNP still reels from an unfolding scandal over plans to build two new super-ferries to serve Arran and the Hebrides. Due to sail in 2018, the Calmac vessel – 801, named the MV Glen Sannox, and the as-yet-unnamed 802 – are already four years late and on track to cost at least £250m, versus an initial stated price of £97m.
They are being built by Ferguson Marine, which was nationalised in 2019 after overrunning costs on the ferry project tipped its owner into bankruptcy. Accounts published earlier this year showed the shipyard made a £100m loss in nine months after being nationalised. The original contract for the ferries had been awarded in 2015 without the usual financial safeguards being put in place, according to a report in March by Audit Scotland, with a paper trail showing the Scottish government was warned of severe risks yet ploughed ahead. Opposition MSPS have accused Holyrood of a “catastrophic failure” in the procurement process for the ferries. Cameron says the Scottish government needs to “urgently address ongoing disruption to ferry and rail services”.
The enthusiasm for pulling the levers of state has come with a price tag. Scotland’s next set of government figures will not be published until August, but those for 2020-21 showed its budget deficit plunged to more than a fifth of GDP in the first year of the pandemic – roughly double the size for the entire UK. That took its implied overall deficit to 13.6pc, versus 11pc for the UK as a whole, according to the Institute for Fiscal Studies.
The Scottish Government spent about £14,800 per resident that year, well above the UK average of £13,400.
David Phillips, one of the think tank’s researchers, was damning in his assessment of the implications such largesse would have for an independent or fiscally autonomous Scotland.
“A structural deficit of the scale of Scotland’s would not be sustainable,” he said last year. “It would need to be tackled by some combination of spending cuts and/or tax rises, in the absence of much stronger economic performance, which is unlikely.”
Even before Scotrail and Calmac, there was the nationalisation of Glasgow Prestwick airport, which Scottish ministers bought from its New Zealandbased owner for a pound in 2013. The move was spearheaded by Sturgeon ahead of the Scottish independence referendum the subsequent year.
Tens of millions in taxpayer cash have been funnelled into the airport since. A Labour MSP last year branded the SNP’S running of Prestwick a “disaster from start to finish”, saying the industrial strategy of Sturgeon’s Government “is decided by soundbites”. The Scottish government scrapped a plan to sell Prestwick late last year. Kate Forbes, the country’s economic secretary, has claimed the airport is carving out a specialist niche – highlighting its role as a landing pad for delegates to the Cop 26 conference last November. Scottish Tories, however, say the airport needs to go “on the market, and off the books”.
Other failures highlight the growing omnishambles around Sturgeon’s state. Examples abound of the First Minister and her underlings taking matters into their own hands with disastrous results.
On Thursday, Sturgeon was forced to concede its census – conducted at a cost of £148m – may prove to be useless because of a lack of reliable data. The project, which was hived off from the UK census at a £21.6m cost to taxpayers, may never reach sufficient return levels despite its deadline being pushed back – an extension that will cost £9.76m. Sturgeon has now launched an inquiry.
Meanwhile, the day before that, Shirley-anne Somerville, the Scottish education secretary, said the country would abandon its flagship pledge to close the educational attainment gap between the country’s rich and poor – a goal Sturgeon had once called her “defining mission”. And earlier this month, Britain’s audit watchdog launched an investigation into a £586m deal Sturgeon made with Sanjeev Gupta, the steel tycoon, in order to rescue an aluminium smelting business in the Highlands. The state offered the money in guarantees to Gupta, helping him buy the business from Rio Tinto in 2016 despite warnings. The takeover of Alvance British Aluminium was supposed to create 2,000 jobs. Figures released last year showed the true number was 20. Recent events show the dangers of Sturgeon’s penchant for throwing money at difficult problems. They may provoke more caution from Scots next time they are asked to hand the SNP unfettered access to the country’s finances.
A Scottish Government spokesman said: “The Scottish Government has taken decisive action to save jobs and protect key assets and infrastructure – and public services in Scotland continue to outperform those elsewhere in the UK on a range of measures.”