Here Comes The New Boss, Worse Than The Old Boss

“A president cannot defend a nation if he is not held accountable to its laws.” – DaShanne Stokes

(This blog post previously appeared in Common Weal’s weekly newsletter. Sign up for the newsletter here.)

Look. I’m not in any way going to defend Boris Johnson. The disastrous policies – from his disorganised Brexit to his Rwanda human trafficking scheme – are causing real harm, his Covid policies have killed over 200,000 people while enriching his cronies and his constant power grabbing have pulled power into the UK Executive (read: the PM) and have disrupted our ability to vote freely, destabilised the autonomy of the devolved Parliaments, the primacy of the UK Parliament and he has torn up the last tattered shreds of what passes for the UK Constitution. He should not go down in the annals of history as one of the UK’s “great” politicians.

And yet…who comes next is looking very likely to be even worse.

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As I write this (on July 13th), we don’t yet know who will be the next PM for the UK though given the botched failure of Labour’s Vote of No Confidence motion and the subsequent passing of the UK Government’s own confidence motion in itself, it is looking unlikely to be Keir Starmer. The job will probably go to one of the current figures vying for the Conservative leadership. Here’s the thing. None of them are calling for the maintenance or expansion of the growth of public spending seen during Johnson’s tenure. Much of that was Covid related and much of that Covid spending was lost to corruption on a damning scale but do also remember that Johnson’s pitch was for “Levelling Up” the deprived areas of the UK. Yes, it was based more on political patronage than economic need. Yes, it failed utterly to do anything other than funnel even more wealth into London and the South East. Yes, some of it was designed to override and undermine the Scottish Government in an attempt to suppress the desire for independence. But that did represent a growth of public spending nonetheless. And yes, even while the “cost of living” payments were welcomed, they were late, insufficient, badly targeted and withdrawn as soon as they could be.

Compare instead the offers from some of the current Tory leadership candidates. I’m not going to review them individually – others are doing that – and many will already be out of the running by the time you read this but there is a common thread running through most of them.

The threat of “the return of Thatcherism” is a well worn cliché in Scottish politics but this time it is not just an idle threat from some random, bitter Scottish Nationalist, but an actual boast from at least one candidate, Rishi Sunak, who is openly pitching that he’ll “run the country like Thatcher”. The revivification of Thatcherism will surely be a joy to hear in the so-called “Red Wall” seats that Johnson won in 2019. These are areas that have suffered the exact same lethal effects of the long-term deprivation kicked off by the first round of Thatcher and they haven’t even had the limit benefit of devolution to counter it. 21% of Scotland’s children live in poverty but even this appalling inhumanity stands as nothing compared to the 30% of children living in poverty in the North West of England and 38% – the worst in the UK – in the North East.

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(Source: NE Child Poverty Briefing)

Sunak is one of the more moderate candidates – saying that tax cuts would have to wait – but he has hinted that he’ll focus on “fiscal prudence” – that’s Austerity to you and me – to balance the budget. Of course, his lack of willingness to cut taxes may not endear him to the hard-right voters champing at the bit to pull the party every closer to their extremes. Others, like Suella Braverman,  are openly campaigning on a platform of scrapping climate targets, continuing Johnson’s bonfire of Human Rights and, of course, harsher tax cuts.

Back on the budget, possibly the most extreme pro-Austerity candidate is new Chancellor Nadhim Zahawi who, in addition to tax cuts, has claimed that he wants a blanket cut to all government departments by 20%. This is would be absolutely devastating to government departments that are already on a knife edge since the last round of Austerity. It’s also unthinkable that this cut would apply to all government departments as cuts to health would be difficult and cuts to the military would directly contravene the new hawkish tone of the UK Government who are calling for defence spending to be increased – possibly to around 2.5% of GDP.

And this is where this leadership contest will have grave impacts on Scotland. Almost none of us here will be able to influence this election – Just six Tory MPs will be involved in whittling down the shortlist and an estimated 10,000 Scottish Conservative party members – fewer than the number of Conservative voters who also say that they are pro-independence – will have a vote in the final selection.

But Tory tax cuts to devolved taxes like income tax will be followed by extreme pressure from the Scottish Conservatives for the Scottish Government to “match” that tax cut. Cuts to reserved taxes like National Insurance will indirectly impact Scottish budgets and cannot be controlled by the Scottish Government at all. When we produced our blueprint for a National Care Service we said that we were against the National Insurance rise and the introduction of a Health and Social Care Levy but that as it was happening, the funding coming to Scotland due to it should be used to start our NCS. Unfortunately, it now looks unlikely that this tax will be introduced and the fear of that happening as we mentioned in the paper has come true even before the launch of the NCS.

Even without the threat of overall Austerity, Scotland’s ability to provide public services would be threatened by this leadership election. As said about, the UK is getting ever more hawkish and is planning to increase its spending on weapons and military. The thing about the Scottish budget is that it is not calculated based on what Scotland needs or on a percentage of the overall UK budget but only on a percentage of what is spent on certain activities in England. This is the Barnett Formula at work. Whenever the UK Government spends on, say, healthcare, the Barnett Formula ensures that an amount of money is added to the Scottish, Welsh and Northern Irish Block Grants.

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(Source: UK Government)

If, however, that same UK Government funding goes into an area like “defence” which is reserved and is said to “benefit the whole of the UK” regardless of where that money is spent, then this does not impact the Block Grants of the devolved nations. You can perhaps see where I’m going with this. If Tory leadership candidates promise to increase defence spending then they may take that money out of areas that attract Barnett consequentials and put it into defence which doesn’t.

Either case will involve Scotland having to make choices. I said above that if a tax cut comes through then there will be pressure from the Scottish Conservatives to “match” it but I wonder if they’ll be quite so keen to call for matched cuts to devolved public services. If our next PM cuts education or climate spending in England and that reduces the Block Grant will they call for the Scottish Government to pass those cuts on too? Or will they drop their simultaneous demand to match Tory tax cuts in devolved areas? Or resist attempts to compensate using devolved taxes such as – possibly – a land value or property tax?

Scotland may well be pushed to breaking point by the next round of Austerity hitting us before we had the chance to recover from the last one. If it isn’t, then the distraction from (or complete denial of) the climate emergency certainly will.

I still don’t know what the future holds for the independence campaign but we are starting to see the shape of the “offer” from the pro-Union side of that campaign. It looks a lot like “One in five of your children are in poverty but be thankful it’s not worse than that…yet. Look at what we’re doing to the rest of the UK”. Boris may be going. His legacy will continue. His successor…may well be worse.

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