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28 July 2023

Scotland has been left with the worst of both worlds

SNP rule has created a system of high taxes and low-quality public services.

By Chris Deerin

Scotland is an “an attractive, welcoming, inclusive place for people across the globe to come to visit, study, live, work and raise a family”, according to the minister for independence Jamie Hepburn. “The most important thing is that, no matter how we came to be here, all of us are as Scottish as we choose to be.”

Well, thank heavens for that, even if cybernats in the darker corners of social media disagree that the latter point applies to unionists. Hepburn made the remarks in his introduction to the fifth in a series of independence papers produced by the Scottish government. Published yesterday (27 July) it covers citizenship, and the SNP is at pains to point out that the loveliness outlined above will continue following the break-up of the UK. To save you reading the full document, the plan – as in so many areas – is for an independent Scotland to essentially become the Republic of Ireland.

The series is written by civil servants and funded by the taxpayer. You might – with some justification – grumble that there are certain urgent national priorities more deserving of ministers’ and mandarins’ attention. But if voters keep putting them in a position to do so, Nats are gonna nat. They’ll keep trying to blow up the foundations even as the house crumbles around them.

Still, in a UK run by Conservatives weirdly fuelled by rage against the other, whether immigrants or asylum seekers or European judges, it’s no bad thing for Scotland to say out loud that it dissents. That’s not the same thing as pretending the SNP will be in a position to implement its citizenship plans in the foreseeable future – it won’t. This is one reason angsty ministers and permanent secretaries in London should relax about the production of these papers. Another is that they’ve all been mediocre. A third is that Scottish voters can eject the SNP from office if they choose to.

As so often on independence, the SNP is running ahead of itself. It’s true that Scotland already is, in relative terms, an “attractive, welcoming, inclusive place for people across the globe to come to visit, study, live, work and raise a family”. But after 16 years of nationalist rule it is neither the country it could or should be. In important areas, of the kind that might make people more likely to come here, it has gone backwards. 

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We have lots going for us: cool castles, big mountains, rugged coastlines, the endless enigma that is Glasgow, the constant state of hyper-vigilance that comes with the weather system being an hourly lottery. But too many schools are below par and sinking further, the health system is in perma-crisis, the economy desperately needs to be sparked back to life, and the political culture is toxic.

Add to this a tax system that is increasingly out of kilter with that practised across the rest of the UK. All Scots earning above £28,000 already pay more income tax than those in England and Wales. Now First Minister Humza Yousaf looks like he will raise rates further.

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[See also: Keir Starmer, take note: voters want conviction, not austerity redux]

The SNP could have addressed Westminster’s two-child benefit cap at any point since it was introduced in 2017, through its own £50bn of public spending. It chose not to, instead concentrating on attacking Westminster’s heartless Tories.

Now, with Keir Starmer refusing to commit to the abolition of the cap, the Nats – spooked by a likely Scottish Labour comeback in next year’s general election – suddenly seem prepared to find the money. Yousaf said this week he was willing to “get round the table” with anti-cap campaigners, adding: “I’ve said previously that we need to be as progressive as we possibly can be on tax.”

There are a number of obvious problems with raiding Scotland’s benighted middle classes for yet more revenue. One is that almost everyone is skint, owing to the cost-of-living crisis and rising mortgage rates. Another is the signal it sends about the nation’s direction of travel.

The Green MSP Ross Greer recently told a parliamentary committee that tax levels were almost as high as they might reasonably go. This was intended, I suppose, to be reassuring. But the thing is, once you’ve addressed the two-child cap, as unfair as it is, there will always be another incidence of unfairness to deal with. The same influential left-wing campaigners will demand you spend more to address the outrage. You will have to prove your progressive credentials all over again. If you’ve been unable to say no before, why would you suddenly have the guts to start?

In Scotland the tax ratchet only goes one way: up. The SNP wants to shake Scotland free from an Anglo-Saxon economic system that it has been a member of – and significantly benefited from – for decades. It is pushing, more or less openly, towards the territory of Scandinavia, where high taxes fund a generous welfare state.

The difficulty is that Scotland’s public services are nowhere near as efficient or effective as they should be, given the enormous sums already being spent on them. The Nats’ terror of confronting the producer interest with anything resembling discipline or meaningful change means the national infrastructure is creaking. Scotland is therefore being stubbornly driven towards the worst of both worlds – high taxes and low-quality public services.

Things will only get worse unless major remedial action, and difficult, unpopular decisions, are taken. The burden of an ageing and sickening population will prove so great in the decades ahead that both the health and welfare budgets are inevitably going to surge, eating into the money available for other services provided by the state, such as schools and transport.

Economic growth will not come close to easing this burden, and so government will have to meet these extra costs from within budgets that look very much like today’s. The prospect is horrible and frightening. That’s even before you consider the instant tax rises and public spending cuts that would follow independence, in order to cover the new multibillion-pound deficit and to reassure global money markets.

Welcome, new citizens, to Scotland: a nation mired in unending constitutional warfare, caught in an immature, self-serving policy debate, and facing a grim future that we are bravely refusing to confront. Never mind that you can’t get to see a GP, here’s your tax bill. Yes, it really is that big. Wait, where are you going?

[See also: Rishi Sunak and Keir Starmer are both trapped]

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