SNP's 'Social Contract' means cuts

Submitted by Matthew on 18 November, 2010 - 11:18 Author: Anne Field

At the time of going to press (17 November) the SNP is announcing the Holyrood government’s budget for the financial year 2011-2012. Huge cuts are expected.

The Con-Dem government has cut the grant for Scottish government for 2011-2012 by £1.2 billions (out of a total budget of £30 billions).

But over the next four years the Holyrood budget for health, education and council funding will be cut by 7%. Its “capital grant” (for infrastructure projects) will be cut by 38%.

Cuts in welfare benefits will add to the damage inflicted on the Scottish economy by the cuts in the Westminster grant.

According to the government’s chief economic adviser, it will be 2025 before the Westminster grant to Scottish government returns to its 2009 level. In the intervening period the total amount of cuts will be in the region of £42 billion.

In an echo of the Wilson-Callaghan Labour government of 1974-79, Finance Secretary John Swinney says his budget will be based on the idea of “a Scottish social contract”.

The “good” side of this social contract is an extension for another two years of the freeze on the council tax (in place since 2007), guarantees to maintain free personal care and other benefits for pensioners, and scrapping prescription charges.

The “bad” side of the social contract is a one-year pay freeze for all workers in the NHS, the police, the fire service, schools and the civil service who earn more than £21,000 a year. This pay freeze is likely to become a two-year pay freeze. Local government employees will be subject to a similar pay freeze.

Swinney claims the money saved from a pay freeze will prevent 10,000 jobs from being axed.

But the “bad” side of the social contract must also involve major cuts in service provision. The money saved by the pay freeze amounts to nearly £300 million, whereas the cut in the Westminster grant amounts to £1.2 billion. That leaves a black hole of £900 million.

No one should be taken in by the argument that the budget is based on a trade-off between saving jobs and freezing the council tax on the one hand and cutting services and freezing pay on the other.

Labour will attack the SNP for making such cuts (conveniently forgetting the cuts which Labour would have implemented if re-elected in May). The SNP will blame Westminster for the cuts and argue that only independence will protect Scotland from such cuts.

The Tories and Lib-Dems will argue that such cuts are required as a result of Labour’s financial legacy, made worse by the allegedly spendthrift policies pursued by the SNP.

But what none of the major political parties will do is argue in favour of defiance of the cuts. In fact, Labour-controlled local authorities’ main line of attack is that the SNP wants to maintain the freeze on the council tax instead of allowing them to increase it.

This underlines the need to build effective campaigning against the cuts at grassroots level, bringing together trade unions and community activists, and combining support for industrial action against the cuts with a political strategy of campaigning for defiance of the cuts.

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