There is a gap between what the Scottish Government claims it wants to do in its economic response to this crisis and its actions.
Health Secretary Jeane Freeman said on International Worker’s Day on Friday that: “If we’re to maximise the chance to renew our country, then we need to take a serious look at how we want to address inequalities of income and inequalities of advantage.” Correct, so why two days later did The Herald report that one of the Scottish Government’s most resolute policy measures to tackle inequality in this parliamentary term, the scrapping of charitable tax breaks for private schools, was being dropped? If the Scottish Government want to use this crisis as an opportunity to tackle inequality, you wouldn’t prop up private schools with savings on business rates which could be spent on tackling child poverty, or on paying social carers more. Private schools are the definition of entrenched inequality.
First Minister Nicola Sturgeon has said that she would like to introduce a Universal Basic Income, but does not have the necessary powers at Holyrood to do so. Fair enough, but what is the Scottish Government actually going to do with the powers it has got to tackle inequality and poverty? It could cancel rent payments in the short-term and in the long-term introduce rent controls, as tenants’ union Living Rent has suggested. It could cancel or re-negotiate PFI contracts and re-nationalise care homes, as public health physician Allyson Pollock has suggested. It could take advantage of the fact that EU state aid rules have been largely suspended to take over strategic sectors of the economy which are revenue raising, such as green energy production. It could use tax levers at local authority level to increase tax on property and land wealth by finally replacing the Council Tax. It could make Income Tax more progressive by increasing the burden on the top 10 per cent of income earners and using the money for a pay rise for key workers, as the STUC has called for.
The problem is that none of these measures will ever be lobbied for by those who tend to have the ear of Ministers. Take the property development lobby, for example. If any industry sector has done well in Scotland out of the last decade, it is the property developers. The Ferretreports that they have managed to utilise this crisis to bolster their control even further over the planning process. New emergency rules allowing more local authority planning decisions to be taken in private during the Covid-19 crisis will leave even less room for public scrutiny of planning decisions. The rules were introduced in consultation with the property developer lobby – Scottish Property Federation and Homes for Scotland – but without any input from community groups.
It’s not the only way in which the property lobby have done well out of this crisis. Housing Minister Kevin Stewart dropped enforcement measures on new home energy efficiency standards in the private rented sector, which were supposed to come into force 1 April. The reduced costs for landlords will mean higher electricity bills for tenants and poorer public health outcomes. The Scottish Government has also given short-term let flat owners access to the small business grant fund, meaning if AirBNB landlords all applied for the scheme they could be in for a collective £13 million windfall. Its anyone’s guess why the Scottish Government think at a time when families are going hungry, dishing out money to AirBNB landlords – which act to reduce the availability of residential housing – is a good use of public funds. As Scottish Greens MSP Andy Wightman has pointed out, these landlords are already getting 100 per cent business relief during this crisis.
AirBNB has successfully lobbied the Scottish Parliament before, to water down the Planning Bill last year. The short-term lets firm used Halogen Communications, a lobbying firm run by two ex-civil servants and senior Tory staffers. It helps to have people who know how the system works. Other Halogen clients include the notorious tobacco giant Philip Morris international, the real estate fund manager Frogmore Property and the supermarket Morrisons. I’m sure Halogen have been busy during this crisis.
At least we know who Halogen’s clients are. Charlotte Street Partners, run by former SNP MSP Andrew Wilson, keeps its corporate clients secret. We know, however, that CSP worked for IHSL, the private finance consortium at the centre of the storm over the Edinburgh Sick Kids Hospital, which has been delayed due to construction faults while IHSL continued to get millions in pay-outs from the taxpayer. And we know Wilson doesn’t like the idea of higher taxes on the rich during this crisis, because he told us. Writing on CSP’s blog, he said: “Taxing the rich rhetoric will see us through maybe one election, a satisfying, reckless, and ironic self-indulgence. The truth is that this is a burden all will have to bear.” One would think that Ministers would want to avoid association with secretive corporate lobbyists working for firms extracting cash from the NHS and openly opposing progressive taxation, but apparently not. Economy Minister Fiona Hyslop has happily tweeted Wilson’s ideas for economic recovery, published on another CSP blog, as an “interesting adaptation of my four point economic plan.”
The Scottish Government’s economic recovery group is laced with such conflicts of interest between the corporate world and government. We are not going to see proposals for radical land reform while the chairman of Buccleuch Estates, Benny Higgins, is on the recovery group. Neither are we going to see plans to cut the ludicrous salaries of university Principals as part of a package of measures to deal with financial shortfalls in higher education, when University of Glasgow Principal Anton Muscatelli is also on the group. People don’t tend to recommend that they should take a pay cut or see their own power curtailed.
Here’s the reality: you can’t do what the corporate lobby want and reduce inequality. It’s a contradiction in terms. The lobbyists work for the richest people and companies in Scotland. They are paid to protect their interests. If the Scottish Government want us to believe that they are going to back up their rhetoric on Scotland’s future with actions, they have to give the corporate lobby the cold shoulder.
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