Things Can Only Get…

We may be witnessing one of the great myth-creation moments of modern politics as Labour hammers home its tax rise message. Actually, slogans aren’t always fanciful – they can be pretty truthful too. I suppose Things Can Only Get Better falls into this category because it was destined to be proved correct in the face of Major’s evaporating government. But it did nevertheless bear the hallmark of a newly-minted rhetorical currency because in one phrase…from a song!…it encapsulated all the policies, all the personalities and the possibilities of 1997.

Another more clearly misleading trope was the Tories’ effort in the election just passed which created the myth that Labour Spent All the Money. Before the Crash they were marginally spending more than income, but well within acceptable levels and less than Mrs Thatcher. It was the Crash itself that maxed out the national accounts because revenues declined rapidly and benefits spending escalated. Labour lost the presentation argument to Tory spin and, when allied to the image of gormless Ed, made a gift for Cameron.

Today we are repeatedly told that a 1p rise to income tax is an anti-austerity measure. Kezia chooses to use the powers coming to Scotland not just manage the Tory cuts. They money will save vital services. The SNP choses to do nothing.

This works at the key level of reaching a distrustful and confused electorate. The message appears to make sense by asking them if they really want to defend essential services. Do you want to support our children in their schools? Then, since ‘there is no money’ we have to raise more by putting our hand in our pocket. The SNP run the schools and set the budget, ergo this is a direct challenge to them. In addition, the tax itself is broadly progressive in that takes more tax from those with more money. What are you waiting for? Vote Labour, save out schools…

There are many side issues relating to previous Labour decisions which impact negatively on this policy idea, but leaving them aside for a moment and taking the 1p rise at face value, does it do what it claims? I argue it doesn’t. There is a small industry in defining what anyone means by austerity. In as few words as possible though it is Less Money in the Economy. It is a reduction in the circulation of money through economic activity, taxes and public spending. Money is the blood that pumps through the body and keeps it alive and healthy.

For that very reason there is definitely a case for increasing public spending at a time of recession because it provides employment and therefore money in circulation and usually, say, a new bridge or road which itself is an economic artery. But that’s money the government can borrow to be paid back in time through growing revenues.

But if you take money out of people’s pockets and leave them with less to spend, you do the opposite of combating austerity – you take money out of the economy. You add to austerity.

That’s especially true if the extra money you save isn’t invested in a directly economic- generating enterprise, which is the case with money directed to a local authority for education services. (For school to be a motor of anti austerity activity requires the kids to grow up first and start earning.) Jackie Baillie told Holyrood teachers were ‘doing their own photocopying and buying jotters’ but so far as I can see no one is saying teachers will lose their jobs which would affect economic activity. Indeed the government is training 3500 teachers, a total that is up for the fifth year in a row. Simply putting money into a council budget does not in itself guarantee any particular advantage for services. There is, again so far as I can ascertain, no promise to ring-fence extra spending for education services, if that is Kezia’s objective. Without it, we are entitled to ask if the extra funds will simply ‘disappear’ (to use Jackie Baillie’s word) like the £1b in anti-poverty money the government disbursed to councils. The GMB is understandably agitating for the 1p tax policy as a means of protecting jobs for its members who include school support staff but in order to sell the Save Our Schools offensive it is first necessary to create the idea that without it schools will be lost. But there is no evidence any schools will be forced to close or that any pupils will not have a school place. If the tax rise was imposed – and we don’t know how much will be left after administration and ‘rebates’ – it can be used to support a school meals service, essential janitorial staff and road crossing personnel. It won’t ‘save any schools.’

Still brutal though, isn’t it? This is what we’re reduced to…counting playground staff and dinner ladies. These are dismal times under budget surgery Labour itself voted for in the Commons only a year ago and which are now passed down through the SNP government. Government, eh? Tough decisions, Johann used to say. Make the tough decisions….not what she’s saying today.

There is an actuarial equation at work here – do you benefit more from leaving the money in a voter’s pocket to spend or more from taking it out to put in a council budget? I’d go for leaving everybody better off so the economic benefit is spread across the whole of society. That’s the real anti-austerity gambit. Hitting even the low paid – and bizarrely giving rebates to a two-earner £40,000 household – isn’t anti austerity no matter how often you hear it repeated.

Nor, by the way, is placing the SNP beside the Tories factually correct. The Tory policy is to cut tax. The SNP policy is to retain tax levels. The Labour policy is to raise tax. Those look quite different to me.

And yet, there is a sense that the SNP is defensive and no doubt at all that this is a debate we need to have. So the myth that Kezia’s plan is anti austerity and the SNP does nothing looks like it will catch on as a campaign theme. Are Scots just perverse enough to vote for the party that pushed the cuts and now wants us to pay for them?

I think we already know the answer.

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