My speech in Glasgow on the SNP’s plans for extended fiscal austerity

Today is ten days until General Election day.

We meet here in the last full week of what is set to be one of the closest and most important general election campaigns we ever have faced.

At the heart of this election is a big choice.

Since I was last in Scotland, the publication of party manifestos has confirmed that the Tories are committed to extreme spending plans – bigger cuts than any other advanced economy in the next three years, spending cuts which are set to double next year.

And what the Tories won’t admit is their plans are so extreme they would end up cutting spending on the NHS.

Because countries round the world which have cut spending on this scale have cut health spending by an average of one per cent of GDP – the equivalent of £7 billion here in the UK.

When I last spoke here I set out how only a vote for a Labour Government would end Tory austerity and deliver change for working class Scots.

I argued that only Labour will deliver a higher bank levy, a mansion tax, the bank bonus tax, changes to pensions tax relief for the highest earners – which will fund extra investment for the NHS, education and jobs for young people starting this year.

Additional funds here in Scotland which will reach £800 million a year.

And I set out three reasons why the SNP could not end austerity here in Scotland.

Because the SNP do not support Labour’s progressive measures for new spending across the UK.

Because, for all their sound and fury, the fundamental truth is that the SNP are committed to a fiscal approach for Scotland which rejects the pooling and sharing of resources across the United Kingdom.

And because a vote for the SNP makes it more likely David Cameron stays in Downing Street.

SNP plans under scrutiny

Since then we have seen the SNP spending plans come under sustained scrutiny.

And we have seen the truth.

First, the comments from the SNP Deputy Leader Stuart Hosie have exposed the total hypocrisy of the SNP manifesto.

They try to claim they support Labour’s measures for fairer taxes across the UK.

Apparently they now support the additional funds for the NHS and youth jobs in Scotland, paid for by these measures.

Even though they voted against the 50p tax rate just this year in the Scottish Parliament.

And even though until their manifesto they had opposed the bankers’ bonus and mansion taxes.

But this last minute U-turn isn’t going to convince anyone that they are really progressive.

Because at the same time they are sticking to the position that they would vote to abolish the Barnett Formula…

… which is precisely the mechanism by which Scotland would benefit from these measures.

The SNP position is now utterly ridiculous.

Their manifesto commits them to vote for fair taxes at the top to provide additional funds for public services in England, Wales and Northern Ireland.

But it goes on to make clear that on no account must these changes help Scotland – because that would mean the pooling and sharing of risk and resources across the UK, something to which they are fundamentally opposed.

And Stuart Hosie’s stark words when amongst the party faithful – revealed today – confirm it.

If these progressive measures were to apply to Scotland and deliver additional resources to Scottish public services, the SNP plan is to cry betrayal and call for another referendum.

On the grounds that full fiscal autonomy has not been delivered.

And this is the second area where scrutiny of the SNP manifesto has exposed the real truth.

We know that the SNP fiscal autonomy plan is to cut Scotland off from taxes raised in the rest of the UK.

The IFS confirmed last week that under the SNP’s policy the scale of the cuts and tax rises needed to fill the gap in the SNP plans caused by fiscal autonomy could:

“reach £9.7bn in 2019–20 (equivalent to £8.9 billion in today’s prices).”

These plans have had commentators and economists queuing up to back the IFS in saying that this would mean huge cuts and tax rises for the Scottish people and Scottish public services.

Jonathan Portes, Director of the National Institute of Economic and Social Research, has said:

“If the SNP plan for full fiscal autonomy were to go ahead then as a number of commentators have said that would lead to very very severe austerity in Scotland.”

The STUC has warned that the SNP Government’s own accounts were “a sobering reminder of some of the risks of full fiscal autonomy.”

Indeed, when the IFS analysed Nicola Sturgeon’s spending plans, they found that they meant longer austerity, bigger cuts, more debt and less money for public services than Labour’s plans.

They rejected SNP claims that somehow Scotland could double its growth rate to close the gap.

This is what they said:

“Even closing the gap over a longer ten or fifteen year horizon would require a step-change in Scottish economic performance, and revenue generation” that is “much easier to promise than it is to deliver.”

And they rejected the claim from the SNP that delaying fiscal autonomy for a couple of years would do anything other than delay the inevitable austerity.


This is what the IFS said:

“Delaying a move to full responsibility for a few years would not on its own deal with the fiscal gap though.
Indeed, if anything, given current spending and revenue forecasts, the gap would likely grow rather than shrink over the next few years. It would remain the case that full fiscal responsibility would likely entail substantial spending cuts or tax rises in Scotland.”

“reaching £9.7bn in 2019–20 (equivalent to £8.9 billion in today’s prices).”

The SNP simply cannot hide from the facts.

The SNP plans mean longer austerity, bigger cuts, more debt and less money for public services than Labour’s plans.

Not fiscal autonomy but extended fiscal austerity.

The SNP’s priority is independence not ending austerity

Because, of course, ending austerity isn’t the SNP’s real priority.

SNP MPs aren’t going to the House of Commons to fight poverty they are going to re-fight the referendum.

Scotland faces a choice between two roads.

A road to reforming our economy so it works for working people again.

Or a road to another referendum.

Nicola Sturgeon says this isn’t about another referendum.

But her Deputy Leader – when he thought he was only taking to the party faithful – has given the game away.

SNP MPs will demand things they know we would never deliver, like an end to the Barnett formula or end to UK pensions.

That is why I say working people in Scotland need a Labour government.

They need an end to food banks.

Action which the SNP don’t support.

They need an end to exploitative zero hours contracts.

Action which the SNP does not support.

They need fair tax changes at the top like on Pensions tax relief – again something the SNP do not support.

They need a higher minimum wage.

Something that only a Labour Government can deliver.

The last thing they need is to be back into another referendum so soon.

If Scotland elects Labour MPs they will spend every day working to make things better for working class people.

We know that SNP MPs will spend every day working for another referendum.

And they will make it more likely that the David Cameron remains as Prime Minister.

Conclusion

So as we enter the final ten days of this election campaign, this is the choice.

The extreme austerity of George Osborne and David Cameron’s plan.

Extended austerity with the SNP plan.

Or a vote for change.

A vote for a Party that believes that when working people succeed, Scotland and the UK succeeds.

Only a vote for a majority Labour Government will deliver in Wales, Northern Ireland, in England and here in Scotland

A real end to Tory austerity.

A better future for Britain.

A better future for working people.

And a better future for Scotland.

That’s what Labour’s first Budget will deliver.

But only a vote for Labour in ten days will make it happen.

Thank you

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Posted April 27th, 2015 by Ed