Ballot Briefing: the SNP looks over the horizon

Nicola SturgeonReuters
By Douglas Fraser
Business and economy editor, Scotland

  • The SNP manifesto is primarily about Brexit and independence, while it doesn't seek to balance books. It's in spending mode, particularly on health.

  • It has priorities for further devolved powers, from employment and drugs to national insurance.

  • There are signals here of where it can be expected to take its campaign into the 2021 Holyrood campaign.

These elections used to be awkward for the SNP. Westminster wasn't its home turf. It wasn't seen to be a player.

It could hope to return a handful of MPs, while Labour won a landslide and steam-rollered its Scottish rivals across the central belt.

How things have changed - particularly in Westminster elections.

In the past nine years, seven have lacked a majority at Westminster. Smaller parties matter, and can play a more influential role while the major parties have been split on the major issue of the day.

For the SNP, this election is a means to two ends. One is to get to an independence referendum. The other is to position itself for the Holyrood vote just over 17 months from now.

What does its manifesto tell us about that?

The positioning for an independence referendum is being well aired. There's an expectation that a deal can be done with a minority Labour administration, though it could be delayed.

It depends on the arithmetic and the leverage, but it could be that the SNP gets something looking like a mandate for a referendum in May 2021, taking the result to Downing Street with a demand that it should be respected.

That's before the preferred date that Nicola Sturgeon wants to have her indyref2, towards the end of 2020. Or so she says. Consider, for a moment, the state of polling on independence.

The SNP leader claims the survey evidence is moving her way. But if there's a trend, it's barely perceptible. After five years of campaigning and flag-waving, and despite three years of Brexit uncertainty, any shift in public support for independence is far from decisive. Nor is it reliable.

Ms Sturgeon might be quietly grateful if the occupant of Downing Street, after December 12, gives her an excuse for a delay until the indy polling look more favourable.

Shop around

Otherwise, the manifesto gives us some steer on the way the SNP is preparing for 2021.

It's marking out the ground for more powers, notably over drugs policy and employment.

Then there's the national insurance system. Without power over that, income tax powers are constrained by perverse, unintended consequences of two payroll taxes being out of synch.

It's worth noting that the SNP does not wish to use that power to raise the threshold for lower earners, as Conservatives do, but instead to freeze it. The SNP priority is to lower employers' contributions to national insurance. So instead of something that feels like a tax cut, this looks more like a job-creating measure.

Allied to that fiscal measure is a push for bigger borrowing firepower, to back up the Scottish National Investment Bank. That will be modestly funded when it starts, but with big ambitions.

Its efforts are being directed towards infrastructure to help tackle climate change. And there's a brief mention of something both radical and risky, which barely gained attention when it was announced last year - the SNP administration is looking at the possibility of setting up a National Infrastructure Company. What that seems to mean is a construction company, applying good employment practice and stripping the profits out of public sector capital projects.

In a similar way, the Scottish government had intended, last year, to set up an energy supply firm to rival the Big Six. With 17 such firms having folded this year, and the Big Six in difficulties, that has been downgraded to a more modest goal - a system to help encourage customers to shop around for a supplier.

Tranche of funds

Holyrood should have control of broadcasting, as we've heard before from the party, adding that the TV licence fee should be set independently. (The Brexit Party, meanwhile and in case you missed this, is arguing that it should be abolished.)

On welfare, the SNP is in fairly generous spending mode, reversing those squeezed entitlements that have become a feature of recent years of working age benefit cuts.

And in a manifesto that doesn't require the party to balance its books (it's not vying for a place in government, after all) the Scottish National Party has an ambitious but strange proposal on health.

It goes something like this: first, with apparent randomness, take the £136 per head gap in spending between Scotland and England. That's 6.3% higher.

You might ask: why? The answer: partly because of the higher cost of more dispersed rural health and historic problems with intractable ill health in post-industrial areas.

But the answer, not explained in the SNP manifesto, is also that Scotland's funding per head is more generous than England's, because of the Barnett funding formula.

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To continue: England should close that gap, by increasing its spend by £163 per head. But of course, it doesn't end there. The point is to get a bigger tranche of funding from the block grant to Holyrood, as a consequence of higher English spending.

Assuming, implicitly, that Scotland maintains that gap, you multiply the additional funds by the population, and get to £740m more for "frontline health" next year. That's on top of a £14bn Scottish health budget in 2019-20.

Then you continue to boost health spending by the same amount each year. And as if by fiscal magic, there's another £4bn to spend by 2024-25. That would be a 29% rise on a budget which is already eating up an ever growing share of public spending.

Big offers

Look at it another way. Labour is being accused of unconstrained profligacy with plans to add another £5bn to Scotland's spending on public services by 2024-25. If you follow the SNP's logic and arithmetic, and imagine Labour's spending taps are full on, 80% of that would be taken up by the health budget.

Try looking at it in yet another way. None of this tells you much about change in the health service. It is purely a signal of serious intent to fund it adequately, without any indication of how it would be spent differently or sustainably, in such a way that the rising cost of health could be brought under control.

That's an issue raised recently by Audit Scotland, pointing out that money is not the only solution. Reform is necessary too, it said.

Extra billions don't buy more doctors and nurses if they're not there to be recruited. It takes time to train them, and a well-run NHS to retain them.

The SNP used to say that it could help to close the gap between reality and aspiration for public spending by tapping into the oil and gas revenue coming from Scottish offshore resources.

Taking projections from the Office for Budget Responsibility, it says this adds up to £8.5bn over five years. But instead of applying that to public services, as it has said it would do in the past, the idea now is for a 'net zero fund', to help meet the cost of the transition from the burning of fossil fuels. (Labour has a plan for a windfall tax of more than £11bn from oil and gas, with a similar intention, but it doesn't say how that would be raised.)

So after this Westminster election, Holyrood will begin a shift into pre-election mode. One of the big stories that Nicola Sturgeon wants to tell the electorate will be on a promise delivered on expanded childcare. Child poverty takes a prominent place in this manifesto. The big offers for 2021 to 2026 begin to take shape here.

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