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30 August 2023

Scottish Labour must do less, better

Anas Sarwar can position himself as the alternative to the SNP’s legacy of half-baked, over-budget policies.

By Chris Deerin

“Do less, better” was never a slogan likely to set pulses racing. Nevertheless, when it was adopted by the new first minister Jack McConnell in 2001 it made a kind of sense.

McConnell had come in on the back of Henry McLeish’s resignation, following a messy spell in which Labour’s Scottish government was widely seen to be frenetically busy but without much coherent sense of purpose. The new man wanted to bring focus and discipline to his administration.

The phrase was predictably mocked by opponents, who claimed it represented a lack of ambition for Scotland’s new parliament. Indeed, McConnell dumped it after about a year, stressing instead his “impatience” to see his vision delivered. He went on to introduce important reforms such as the ban on smoking in public places, innovative immigration measures, and changes to education policy.

More recently, devolution could be characterised as governments doing more, worse. Especially in her latter years, Nicola Sturgeon brought a hyperactivity to office that, unfortunately for her, was not matched by the success of her measures. A grotesquely over-budget and as-yet undelivered ferry contract, various failed plots for a second independence referendum, thwarted proposals for gender recognition reform, half-baked plans for a national care service, an abandoned ban on alcohol advertising, a scrapped bottle deposit scheme – these were signs of a first minister desperately scratching around for a legacy without doing the necessary due diligence.

Whether bad politics or bad policy or both, each of these failures was an expensive one, to a greater or lesser extent. If the SNP’s long reign can be corralled into any kind of thesis – and I’m not sure it can – it would be a constant attempt to extend the role and command of the state, accompanied by a firehose approach to spending taxpayers’ money. Billions have been wasted on schemes that have almost instantly dissolved on contact with reality.

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This is one reason that the findings of a new Survation poll, released on Tuesday 29 August, should be unsurprising. A majority of Scots are unhappy with the quality of SNP spending: only 28 per cent believe the level of personal tax they are charged is giving value for money in public services, while 54 per cent say it does not.

[See also: Why Scottish business is putting its money on Labour]

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At this stage, it’s worth reminding ourselves that any Scot who earns above £28,000 a year pays more in income tax than their equivalent elsewhere in the UK, and that Humza Yousaf, the First Minister, has all but committed to raising taxes further at the next available opportunity. As I wrote last month, this has left those living and working north of the border facing the worst of both worlds – high tax rates without a concomitant improvement to the quality of public services. There has been little from Yousaf so far to suggest he has the guts to take on the latter challenge. Rather, as economic growth remains sluggish and schools and hospitals decline, he seems likely to keep returning to the taxpayer well to fund whatever new attention-grabbing schemes he can dream up.

It was perhaps kismet that led the Scottish Tories to choose Tuesday to announce their own tax and economy plans. Douglas Ross, the party leader, demanded the Scottish government make growth its top priority and wants tax cuts that bring Scotland back into line with the rest of the UK. The size of the devolved government should be cut, too. This is hardly a surprising wish list from Conservatives.

If, then, we know that the SNP is the party of high taxes and the Tories the party of tax cuts, we have yet to learn where the Scottish Labour Party intends to position itself in this debate. With Anas Sarwar attempting to woo erstwhile nationalist voters as well as unionist ones before next year’s general election and the 2026 Holyrood one, there is an obvious instinct to split the difference. He might promise to realign income taxes with UK levels as soon as the economy returns to a decent level of performance – this would help head off SNP charges of planned cuts to services, and blunt Tory attacks that Labour will only continue the Nats’ profligate ways.

But Sarwar should also make a great deal of Labour’s intention to provide competent government and to avoid announcing the kind of wheezes that cost an arm and a leg before simply falling over. The Scottish state is already an overly generous benefactor (using our own money, admittedly) and should not become more so. More government cannot always be the answer to every issue – issues are, after all, endless. Budgets and tax levels are stretched to breaking point, and Labour ministers who want to tackle the rot that has set into our public services will need to prioritise spending in a way that shows they understand this.

If the economy is to return to growth, then political as well as business innovation will be required. For example, Sarwar could do a deal with Keir Starmer that control of corporation tax will be devolved to Holyrood, as it is to Northern Ireland. My think tank, Reform Scotland, has previously called for such a step, and for the opportunity to be used to design policy that attracts more entrepreneurs to Scotland, incentivises the creation and development of new businesses and, ultimately, produces more top-rate taxpayers. This could include offering a zero rate of corporation tax for new businesses setting up in Scotland, including for a set period after they begin to earn profits.

The Scottish businessman Sir Tom Hunter recently suggested something similar, arguing that devolution of the tax might be used to cut the levy on firms operating in renewable energy and the low-carbon manufacturing sector, life sciences and medical technology, and software, big data and artificial intelligence.

Given what appears to be a growing view among the voters that the SNP has been spending their money neither well nor wisely, a Labour Party that offered basic competence, greater care in how public cash is deployed, an end to the seemingly relentless increase in taxes, and fresh, innovative ideas to get the economy growing again, might just find favour. It’s almost an offer to do less, better – though Sarwar should probably find another slogan.

[See also: Can Anas Sarwar stand up to Keir Starmer?]

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