Our Finance Minister Derek Mackay may be new to his job but the boyish looks deceive; he is no rookie. Bred in the rough-and-tumble West Central politics of Renfrewshire Council, he built the SNP Group there into formidable opponents of Labour;s hegemony. His reward was leading the fist-ever SNP administration there 2007-11. That was followed by election as an MSP, with ministerial posts soon after before taking over the hot potato of Finance from John Swinney’s legendary ‘safe pair of hands’.
So, How Did Our Boy Do?
In his first budget on December 15th, his hands did not fumble. Faced with predictable “no-taxes!” cries from the Tories and “more-taxes!” cries from Labour, he dominated the centre ground with a budget that should appeal to Scottish voters, most of whom are in the middle these days. But alienating both main opposition parties does not exclude either of the minor parties from supporting his budget after a little horse-trading.
Nicola should give him high marks for continuing John’s safe pair of hands. Going beyond ‘steady-as-she-goes’ Derek contrived a number of items that received little attention. Amonng these are:
- £340m more for the NHS, which is a real £120m increase over inflation
- £200m in capital to help provide more affordable homes
- £140m in capital to extend the home insulation programme
- £100m to speed up the rollout of fast broadband and communications
- Extending to 100,000 the number of small businesses paying no rates
- £60m for the police budget which at least keeps pace with inflation
He deserved more praise for these. But since even his opponents agree these are good ideas, the Scottish media ignores harmony to fixate on controversial or tabloidesque gossip as juicier reading. Even leaving tax thresholds alone earned scant coverage.
Does That Mean Our Boy Done Good?
Erm…not quite. As a stratagem to flatfoot the opposition, please his boss and stay popular among SNP MSPs, the answer is ‘yes’—a slicj fiscal elastoplast for the short term that raises little ire. But the UK struggling with a devalued currency on the brink of recession. Add in Scotland trailing England by over 1% in economic growth and that needs decisive action that wasn’t there.
Despite being given tax levers for the first time, scant use was made of them to re-stimulate Scotland’s economy. Indeed, by draining a third of Scottish Enterprise’s £450m budget (richly though they deserved it), it could be argued he did more harm than good to growth.
Throwing more money at the NHS and schools and even rail passengers are popular with voters. But they do little to increase or distribute wealth. There was, however, one area where smoke and mirrors were deployed extensively: local government. His budget only got mealy-mouthed when it got to his. press release (published verbatim in the Hootsmon) said: “Councils to get £240m funding boost“.
Keeping Councils Quiet
Given council elections due next May, he had to boost the chances of 1,200 SNP candidates hoping to become councillors. After a decade of austerity and five years of real-term cuts of 9%, warm words don’t cut it in the teeth of cold number any more. Let’s look closer at that £240m ‘boost’.
Ever since John Swinney’s 2007 ‘Parity of Esteem’ turned out to be code for central control, the SNP government has treated local colleagues of all parties as subservient. Although Derek was local government minister for three years (2011-14) his main effort was to keep councillors docile before passing them on to the equally comatose Marco Biagi. Derek is smart enough to know local government underpins party political strength. So May must offer good reasons why the SNP should run schools, refuse, etc. Derek offered|
- £107m to further fund integration of local NHS with social work
- £120m direct to head teachers for attainment in deprived areas
- £100m stepped increases in council tax rates for bands E, F, G & H
- Assumed £70m from 3% increase in council tax now freeze is lifted
Sounds more like £400m than the £240m he cites. But the money for NHS integration and school heads is ‘ring-fenced’ and can be spent only on those items, Inflation and pay rises alone would require £300m more to provide the same services as this year. That looks more like a £160m shortfall.
Councils will be forced to raise council tax by 3% AND levy the increased tax from high-end property owners—and get pelters for it while Derek smiles and claims he raised no taxes taxes. Meanwhile, councils will have only half the increase they need. For all his warm words and council experience, this leaves Derek’s council colleagues rather in the lurch as they face budget setting this February.
It will take special loyalty and bravery among would-be SNP councillors who face voters so poorly furnished with fiscal arguments without giving Derek a choice piece of their mind at the very next opportunity..