Far from ‘building forward better’, the last budget of this Parliament is trying to weld itself into building back to the pre-pandemic ‘normal’, writes Craig Dalzell.
THE LAST BUDGET before an election is always a tricky thing.
On one hand, it’s a last chance for the party of government to show what it stands for and finish the term with a flourish (or, for the more cynical out there, to throw some sweeties at target voters) but on the other, there may be a temptation to not waste a policy now on something that could be a vote-winning manifesto promise later (especially given that the policy in question will in either case only be fulfilled post-election and only if the party is returned as the government). The last budget before an election can therefore either be particularly exciting and radical or it can be really boring – almost a placeholder.
The Scottish Government certainly talks a radical game. One of the first governments in the world to adopt the concept of the “climate emergency” and to adopt “wellbeing” principles which eschew chasing economic growth over actively improving the lives of people, it has set the framework under which our country could be utterly transformed for the better. As we enter the second year of the Covid pandemic, we really need to see the vision of this transformation to remind us what we’re fighting for.
But it takes more than a headline to change a country. The policies must match up too. And this is where the government all too easily slips back into old language, old rhetoric and old ideas of the old ‘normal’ of the pre-pandemic world.
Take economic growth and wellbeing. Despite stating just a year ago that “Health and Wellbeing are as fundamental as GDP”, the analysis of where Scotland is right now was couched much more in terms of the impact on GDP (down 7.1 per cent on pre-pandemic levels in Scotland compared to around 8.5 per cent down across the whole of the UK) than it was in terms of lost health outcomes or growing inequalities.
Indeed, the line that framed the strategy for economic development was “We must invest for growth”. This is entirely antithetical to the concept of Wellbeing Economics that states clearly that we must determine when the world and our country in particular has had “enough” growth and that we should transition into a steady-state economy.
This is particularly important if we determine that we’ve already passed our destination (World Overshoot Day – when the world consumes as many planetary resources as can be regenerated by the planet in a year – was on 29 December in 1970, but had shifted to 22 August in 2020). That the government attempts to sanitise the image of this growth by couching it in terms of “Inclusive”, “Green”, or “Sustainable” Growth does not resolve this conflict.
Away from the philosophical arguments and into the policies, this last budget before the election did tend more towards boring than the radical. There will be no exciting debates about the progressiveness of the Income Tax rates, they’ve been fixed and the band thresholds – with the exception of the top rate – will rise with inflation. Despite rumours that Rishi Sunak is considering scrapping Council Tax in favour of a more up-to-date Property Tax, the Scottish Government decided not to steal the march on that. Council Tax – with all of its flaws – will remain for another year (though Councils have been given a financial inducement to freeze its rates).
Not even I can get too excited about the proposed rises in Landfill Tax (we’re still a long way from the Scottish Government adopting its stated principle of developing a Circular Economy and all that that transformation needs to entail). Housing policy in particular has fallen far short with proposed increases in funding for housing retrofits being more than matched by falls in funding for new builds and with little sign that either tranche will be enough to meet the demands of the climate emergency. We need to start a radical social house building project (no more subsidised private volume builds) to kick-start an industry building Green New Deal compliant zero-carbon houses. We need to ban the building of sub-standard housing now (every non-GND compliant building we construct today is another retrofit for before 2045).
And we need to face up to the enormity of the retrofitting challenge we already have. Common Weal has estimated that the total budget to bring every existing house in Scotland in line with GND targets could be around £40 billion. With only 24 years left to do the job, a budget of only £145 million for this year represents less than a tenth of what is needed.
Everyone in Scottish politics understands the constraints of the Fiscal Framework that the Scottish Government is under and the budget did make a great deal out of explaining those constraints (though less mention was made of the strategy that will need to be developed as this Framework is renegotiated over the course of 2021 and 2022). These constraints are real and substantial and Common Weal is of the view that the only real way out of them is via independence (those who demand that ambitions for independence are shelved should be prepared to show their proposals for circumventing or living under these constraints) so we see the long view of the prospects of our recovery from the pandemic and adaptation to the climate emergency very much in this light (as shown by our Resilient Scotland plan).
We know that the Scottish Government accepts this philosophically too, but until the policies start to match the ambition, it will be difficult to see how these ambitions are fulfilled. We have a chance to build a new country out of the recent catastrophes. The Scottish Government should not simply slide us back into the old ‘normal’ out of lack of will to meet its own promises.