Is it the economy, stupid, that will decide the outcome of the Scottish Parliament election?
Scotland needs a more collegiate government focused on serving Scotland’s economy, not mining of political grievances
Political consultant James Carville coined the phrase “it’s the economy, stupid” when advising Bill Clinton during his successful 1992 US presidential campaign. If this is true for the Scottish Parliament election on May 7, then Labour is in for a well-deserved pasting, as the government at Westminster carries the can for UK prosperity or lack of it.
The UK’s economic outlook is so bleak it hardly bears thinking about, which is perhaps why so few ministers appear to do so. All the warning lights must be flashing red on Chancellor Rachel Reeves’ dashboard as she and her colleagues drive the UK hurtling towards a potential debt crisis.
Taxation, borrowing and expenditure are at eye-watering levels and yet Labour ministers seem psychologically incapable of doing anything about it. Some perhaps even view deregulation, bringing down public spending and cutting the size of the state as morally wrong.
A worrying debt spiral
But debt is approaching £3 trillion – roughly 100 per cent of GDP. When Tony Blair took office in 1997, it was around 35 per cent. Financial markets – sovereign wealth funds, insurance companies, global investors and such like – view the UK as an increasingly risky proposition.
For more than a year, the cost of government borrowing has been higher than it was during the 2022 mini-budget crisis of Liz Truss’s brief premiership. Of the £14.3 billion the government borrowed in February, £13 billion was spent on debt interest alone.
This is a debt spiral. Businesses and households cannot operate in this way, and yet this is how the country has been run by successive governments.
‘We are not safe’
We now spend twice as much servicing the national debt as we do on defence. No wonder Lord Robertson, who was Defence Secretary under Blair before becoming Nato Secretary General, gave both barrels to the “non-military experts in the Treasury” last week.
With no sign of the Strategic Defence Review he delivered in June ever being acted upon, Robertson warned: “We cannot defend Britain with an ever-expanding welfare budget.” He added: “We are under-prepared. We are under-insured. We are under attack. We are not safe … Britain’s national security and safety is in peril.”
The UK tax burden is on track to reach its highest level since 1948. Added to that burden this month are changes to national insurance rates and inheritance tax reforms for farms and businesses that will drive more employers to the wall.
This, combined with an increase to the minimum wage far above the rate of inflation, has seen youth unemployment rise to 16 per cent. Anything that is taxed becomes more scarce – including jobs.
Upside-down energy policies
The “triple lock” on pensions was introduced as a temporary measure in 2010 to bring payments into line with the cost of living. It has done its job but remains in place as the population ages.
Replacing it with a double or single lock would seem logical, except it would be unpopular with Britain’s growing ranks of pensioners, who are particularly diligent in carrying out their civic duty on polling day.
Our upside-down energy policies have sent costs for households and businesses soaring, fuelling inflation and deindustrialisation. Ministers’ enthusiasm for the madcap race towards net zero and unreliable “renewables” has compromised our energy security and made us hugely reliant on imports of resources we could extract for ourselves from the North Sea.
Today, Norway might happily sell us gas they have extracted from North Sea fields, but tomorrow decide they no longer wish to do so. The truly toxic legacy we risk leaving future generations is economic rather than environmental.
Identity matters
The state of the UK economy will do Scottish Labour leader Anas Sarwar no favours on May 7, and nor will many other aspects of Sir Keir Starmer’s unpopular administration. But in a Holyrood election, it is not just the economy, stupid. It is also identity that drives voters.
For this reason, the SNP looks a shoo-in to secure yet another five years on top of the 19 it has already had – despite its own shortcomings on the economic front.
Former Scottish Enterprise chief executive Jack Perry recently accused SNP ministers of pursuing the “economics of the madhouse” and having the financial sense “of a bunch of drunken sailors on shore leave”. Perry pointed to public spending per man, woman and child of £4,721 more than the tax taken in, and a seemingly endless Generation Game-style conveyer belt of “free stuff”.
There is no free stuff, only stuff that somebody else has paid for. “Who is going to pick up the tab?” Perry asked.
Meanwhile, Scots entrepreneur Sir Tom Hunter has demanded tax cuts to end the gap between Scotland and the rest of the UK, condemning “crazy” business rate hikes.
But First Minister John Swinney ignored these appeals when he launched the SNP’s manifesto last week, which includes a pledge to introduce food price controls for items such as bread, milk, eggs and chicken in supermarkets. Swinney declined to point to economies where such measures have been successful, or even not led to shortages.
This would be beside the point, which is to set up yet another grievance against the UK Government when it vetoes the move on the grounds that it would be unlawful.
Starmer, the narrative would then go, would be unable to take the bread from the plates of poor Scottish children if only we were unshackled from Westminster.
Labour and the SNP have little to shout about on the economy. They could both suffer losses to Reform and the Greens. The Liberal Democrats could do well. Perhaps the Conservative vote will just about hold up.
And maybe this would lead to a more collegiate government that is better focused on serving Scotland’s economy rather than the mining of political grievances.
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