The SNP must get serious on tax

Last weekend the SNP Conference overwhelmingly passed a strong motion on progressive and redistributive tax measures proposed by its largest affiliate body, the Trade Union Group.

This set out the direction Scottish Government needs to take in order to mitigate cuts and to address austerity, under-resourced public services, the continuing cost-of-living crisis, impending pay demands, and the need for serious investment in a Just Transition. It commends the work of the STUC (and, by close association, Common Weal) in putting serious alternatives on the agenda.

Despite that, there was not a word on taxation from First Minister John Swinney or from Cabinet Secretary for Finance and Local Government, Shona Robison, when they spoke at conference. Nor as they unveiled their Programme for Government in parliament a few days later.

The documents accompanying the statement at Holyrood have nothing to say about tax, either. And Deputy First Minister and Cabinet Secretary for Economy, Kate Forbes, has similarly been silent. Meanwhile, the mainstream media seems not to have noticed the emerging contradiction between the cry of “there’s no money”, and the adoption of a motion pointing out exactly where the money is.

What green strategy?

This is part of a pattern. In recent years, the SNP’s conference has twice called for an asset creating, renewables-based, public energy company. This was rejected, allowing Starmer’s Labour to move in with their GB Energy plan, aimed at seizing control of the agenda and probably redirect resources away from Scotland.

Similarly, the SNP government has defied party policy opposing Freeports and their greenwashing. The party rightly recognised these as tax and regulation free zones which create a backdoor into the economy for the Westminster political duopoly’s corporate pals.

Regarding Scottish Government green industrial strategy, which looks at present to be heading in the direction of another asset sale approach, it is worth noting that the Sumitomo and Haventus energy projects fall within the Cromarty Freeport, with the former investment effectively being a grant and the latter a credit facility. Neither are equity finance initiatives to build up ownership in the sector. Government equity stakes in offshore developments are a vital way to deliver recurring rather than one-off revenues once operational, instead of all of the profits going to multinational companies.

Other examples of the growing gap between party policy and government action or inaction could be cited, notably around the National Care Service. Along with Common Weal, trade unions and voluntary groups, the SNP Trade Union Group has articulated the strong desire of SNP members and many others for moves in the direction of a proper public service. What we are being given instead, at present, is effectively a procurement service for private providers full of unaddressed questions and potential pitfalls.

Party v government

It is not unusual for parties of the left and centre-left to find that things drift away from core values and commitments when they enter government, particularly after a sustained period in office. In Scotland, it is time to address that gap with urgency. Why? Because the other gaps now wide open involve a £1 billion (and rising) hole in public spending requirements, £500 million worth of cuts (a few days earlier it was being estimated at half that amount) and a forecasted reduction in the Scottish government’s capital budget of 20% in real terms over the next five years.

Yes, the likely capital shortfall highlights the fact that unnecessary fiscal decisions at Westminster are having a serious impact on Scotland. Labour promised an end to austerity, but will now be delivering it. But the Scottish Government also has to take responsibility for its own decisions, or lack of them. That includes £150m on funding a vote-touting council tax freeze rather than investing in services and giving real support to local authorities. A ScotWind auction in 2022 that massively undervalued Scotland’s offshore energy resources and placed a low and arbitrary maximum ceiling on the amount that competitors could bid for their development. Much of the £756m revenue has already been spent, and the rest (around £460m) is now likely to be needed to balance the books through until April next year.

Think again

Yes, the Programme for Government contains some good measures. But overall, it is another huge, missed opportunity. A rethink and serious recalibration is needed.

That SNP conference motion on ‘Effective Use of Taxation’, passed almost unanimously, called for a further increase in the tax contribution of higher earners across Scotland, realistic options for a tax on extreme wealth (probably done regionally), power and discretion for local authorities to introduce taxes which appropriately meet local needs and protect local services, and the speeding up of reform of local authority finance (including replacing the council tax with a new residential property tax related to actual value).

The motion also called for positive engagement with the STUC’s proposals for generating more revenue to tackle poverty and inequality, and to invest in a sustainable economic and energy future. These focus on the abundance of wealth tucked away in property, land and assets. A land and property revaluation should be the foundation of revamping our taxation and revenue-raising powers.

So where do things go from here? Blaming Westminster, finger-pointing at Labour and shouting “wiznae us!” will not suffice. Not now, and certainly not in 2026 and 2027, when the Holyrood and council elections occur. The SNP Trade Union Group wants to engage actively with the STUC, Common Weal and others in looking at concrete proposals for an alternative Scottish government budget, and perhaps another emergency one next year. This should address the practical steps that need to be taken towards a staged, scaled approach to further progressive and redistributive tax measures. Then we should get the widest campaigning coalition within and beyond the SNP pressing for it.

As SNP trade unionists, we are also looking for improved channels of communication and engagement with both the party’s leadership and the Scottish Government. That is in their interests, not just ours. The concerns and contribution of workers and communities should be central to green industrial thinking, the renovation of public finances, better decisions from parliament, reinvesting in local government – and, yes, the case for the full powers we need from independence in order to move from gradualism and mitigation to something altogether more transformational.

First published by Common Weal and reproduced with the author’s permission

Featured image of Swinney with economist Joe Stiglitz via Scottish Government flickr CC BY 2.0 Generic