Scottish Labour's support for cuts plays into the SNP's hands

Johann Lamont's echo of Conservative rhetoric - "something for nothing" - was a disastrous way to begin the debate.

At the last Scottish Parliament election in 2011, Labour pledged not to reverse popular SNP policies such as free university education, free NHS prescriptions and the council tax freeze. But in a speech in Edinburgh yesterday, Scottish Labour leader Johann Lamont signalled a change of direction, declaring that Scotland could not be "the only something for nothing country in the world" and calling into question the future of those benefits. She said:

I know that there are families, working hard, on above average incomes who feel they pay enough and are attracted by policies likefree prescriptions, free tuition fees and the council tax freeze.

I know where they are coming from.

But I ask them to look at how they are paying for those free things. What price your free prescription when an elderly relative spends five hours on a trolley in A&E, or the life-saving drug they need isn’t available at all?

What price free tuition fees when your neighbour can’t get a place at college, or when university standards are now lower than when they went to uni?

What price the council tax freeze, when your parents care is cut, and your child’s teachers cannot give them the materials they need because there is a ban on something as simple as photocopying.

With growth likely to remain anaemic or non-existent, few will dispute that there is a reasonable debate to be had about the services the state should provide and how they should be paid for. But with her provocative support for cuts, Lamont has fallen into a giant SNP elephant trap.

The speech itself was considerably more nuanced than most of the headlines suggest, but her echo of Conservative rhetoric - "something for nothing" - has allowed Alex Salmond's party to present itself as the defender of the poor against a Labour Party dedicated to savage cuts. Rather than implying that cuts were inevitable, Lamont should have presented voters with a choice: higher taxes or lower spending? In fact, she did just that, stating "if we wish to continue some policies as they are then they come with a cost which has to be paid for either through increased taxation, direct charges or cuts elsewhere. If we do not confront these hard decisions soon, then the choice will be taken from us when we will be left with little options." But the provocative language elsewhere in the speech meant any nuance was lost.

In challenging the concept of universal benefits, Lamont has underestimated the strong body of popular support that exists for them. "What is progressive about a banker on more than 100,000 a year benefitting more than a customer on average incomes from the council tax freeze?,"  she declared. But universal public services, to which all contribute and from which all benefit, are the essence of social democracy. Once this principle is abandoned, greater cuts will inevitably follow as the rich, no longer receiving, have less incentive to give (you could call it "nothing for something"). For this reason, as Richard Titmuss sagely observed, "services for the poor will always be poor services". If Lamont is not to alienate many of her party's natural supporters, she should reassure them that she still recognises as much.

Scottish Labour leader Johann Lamont said that Scotland could not be "the only something for nothing country in the world". Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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What type of Brexit did we vote for? 150,000 Conservative members will decide

As Michael Gove launches his leadership bid, what Leave looks like will be decided by Conservative activists.

Why did 17 million people vote to the leave the European Union, and what did they want? That’s the question that will shape the direction of British politics and economics for the next half-century, perhaps longer.

Vote Leave triumphed in part because they fought a campaign that combined ruthless precision about what the European Union would do – the illusory £350m a week that could be clawed back with a Brexit vote, the imagined 75 million Turks who would rock up to Britain in the days after a Remain vote – with calculated ambiguity about what exit would look like.

Now that ambiguity will be clarified – by just 150,000 people.

 That’s part of why the initial Brexit losses on the stock market have been clawed back – there is still some expectation that we may end up with a more diluted version of a Leave vote than the version offered by Vote Leave. Within the Treasury, the expectation is that the initial “Brexit shock” has been pushed back until the last quarter of the year, when the election of a new Conservative leader will give markets an idea of what to expect.  

Michael Gove, who kicked off his surprise bid today, is running as the “full-fat” version offered by Vote Leave: exit from not just the European Union but from the single market, a cash bounty for Britain’s public services, more investment in science and education. Make Britain great again!

Although my reading of the Conservative parliamentary party is that Gove’s chances of getting to the top two are receding, with Andrea Leadsom the likely beneficiary. She, too, will offer something close to the unadulterated version of exit that Gove is running on. That is the version that is making officials in Whitehall and the Bank of England most nervous, as they expect it means exit on World Trade Organisation terms, followed by lengthy and severe recession.

Elsewhere, both Stephen Crabb and Theresa May, who supported a Remain vote, have kicked off their campaigns with a promise that “Brexit means Brexit” in the words of May, while Crabb has conceded that, in his view, the Leave vote means that Britain will have to take more control of its borders as part of any exit deal. May has made retaining Britain’s single market access a priority, Crabb has not.

On the Labour side, John McDonnell has set out his red lines in a Brexit negotiation, and again remaining in the single market is a red line, alongside access to the European Investment Bank, and the maintenance of “social Europe”. But he, too, has stated that Brexit means the “end of free movement”.

My reading – and indeed the reading within McDonnell’s circle – is that it is the loyalists who are likely to emerge victorious in Labour’s power struggle, although it could yet be under a different leader. (Serious figures in that camp are thinking about whether Clive Lewis might be the solution to the party’s woes.) Even if they don’t, the rebels’ alternate is likely either to be drawn from the party’s Brownite tendency or to have that faction acting as its guarantors, making an end to free movement a near-certainty on the Labour side.

Why does that matter? Well, the emerging consensus on Whitehall is that, provided you were willing to sacrifice the bulk of Britain’s financial services to Frankfurt and Paris, there is a deal to be struck in which Britain remains subject to only three of the four freedoms – free movement of goods, services, capital and people – but retains access to the single market. 

That means that what Brexit actually looks like remains a matter of conjecture, a subject of considerable consternation for British officials. For staff at the Bank of England,  who have to make a judgement call in their August inflation report as to what the impact of an out vote will be. The Office of Budget Responsibility expects that it will be heavily led by the Bank. Britain's short-term economic future will be driven not by elected politicians but by polls of the Conservative membership. A tense few months await. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.