The key thing the UK Labour government could do to help their Scottish brethren win in May, Anas Sarwar told me some months ago, was to bring down energy prices. This would be a visible sign that the cost of living crisis was being tackled. Voters would feel the benefit. They would be grateful to Labour, and show that gratitude at the ballot box.
Well, according to Rachel Reeves, they’re doing just that. The Chancellor announced in her Budget that households will receive an average £150 off their energy bills through the scrapping of green levies. Unfortunately for Sarwar, the political situation has deteriorated to such an extent that the measure no longer seems likely to have much of an impact on his apparently dwindling prospects of becoming first minister.
Such has been the car crash of Keir Starmer’s government that its toxicity is infecting everything: Labour in Scotland, Labour in Wales, Labour in England. Taxes of one sort or another have shot up over the course of two Budgets, and the government is simply not trusted by the electorate. Both Starmer and Reeves are calamitously unpopular. Sarwar, who has aligned himself closely with the PM, is feeling the backdraft.
It’s not that Labour hasn’t been good to Scotland. Reeves’s first Budget provided an extra £3.4bn to the Scottish government. This week brought a further £820m, which the Chancellor said was thanks to Sarwar asking for it. The scrapping of the two-child benefit cap is something that both John Swinney and Sarwar have been demanding for some time.
However, the energy levy that is having such a horrendous effect on North Sea oil and gas, a vital part of the Scottish economy, has been kept in place. As Sandy Begbie, chief executive of Scottish Financial Enterprise, points out, capping salary sacrifice could hit the long-term savings industry, a particular strength of Scotland’s large financial services sector. The uncertainty surrounding the Budget process, the decisions taken last year on employers’ national insurance, and the smorgasbord of tax rises announced this week, will all damage Scottish Labour as the Holyrood election approaches. Businesses are withholding investment and putting off hiring decisions, growth projections are miserable, and consumers seem likely to spend less.
There is still no sense of what this government is for – it is not reforming public services, or cutting the ruinous welfare budget, or introducing measures that will get the economy firing again. Instead, Reeves bought off her own backbenchers with her spending increases. An administration that promised to be about service instead looks self-interested, party before country, a player of games.
Sarwar has to sell all this to a sceptical nation. He wanted to go into the election campaign with a message of hope and evidence from London that Labour is turning things around. I’m sure he will still try to do this, but there is a real danger that his words will sound hollow and that he will simply appear disconnected from reality. Voters are not stupid – their mood is one of nervousness and pessimism. The present is grim, and the future does not look bright. And the finger of blame for this is being pointed firmly at Sarwar’s pal in Downing Street.
It all works in Swinney’s favour. He now has extra cash to splash at a vital electoral moment. His government may be no great shakes either, but it is far less unpopular than the UK administration. Dull and ineffective, maybe, but in comparison to the weekly clown show at Westminster it at least appears steady.
The tragedy of all this is the impact the situation is likely to have on reform in Scotland. A nation that badly needs radical change to its public services and brave decisions from its political leaders will probably not get it. There is no real pressure on the SNP to take risks by challenging the vested interests that are holding us back – the polls suggest the party is cruising to victory as it is. When Scottish Labour was competing for first place a year or so ago, there was a refreshing energy to Scottish politics. That competitiveness forced Swinney to explicitly refocus his government on the big mainstream issues that affect everyone, such as education, health and the economy. Sarwar was snapping at his heels and the status quo would no longer do. Without that sense of jeopardy, the incentives have changed.
As for Sarwar, how radical can his own manifesto now be? With public confidence low and faith in Labour even lower, any programme of serious reform will be a major gamble. My instinct is that what we will see from the two main parties in the coming months will amount to little more than promises of tinkering – a tweak here, a nip and tuck there, electoral bribes and continued high spending, all amounting to not very much. Scotland will be doomed to continue on its current path of mediocrity and decline.
I dearly hope I’m wrong. The times and the challenges are too serious for low ambitions and playing safe. But it simply doesn’t feel like we are approaching the moment where our politicians will surprise us. And so Scotland continues to sink.
[Further reading: Scotland must learn from English schools]
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