The Baltic News 2.
Jeremy's miserable medicine, dodgy Scottish stats, and how Truss-onomics lives on in Skye
Budget blues
JEREMY Hunt’s bitter medicine for the UK economy has left a pall of gloom around the country. Thank God for the distraction of the World Cup.
The Chancellor’s shtick is that, after years of cakeism, at least the government is now being honest about the hole we’re in. He and Rishi Sunak say they will be unsparing in facing up to the key challenges we face.
And there are two particular issues Mr Hunt mentioned last week that the Government should keep focussing on - and, where possible, carry out on a UK wide basis.
Firstly, the Chancellor raised the alarming question of Britain’s missing workforce, as noted in James Forsyth’s Times column on Friday.
Mr Hunt declared:
“I am proud to live in a country with one of the most comprehensive safety nets anywhere in the world, but also concerned that we have seen a sharp increase in economically inactive working age adults of 630,000 since the start of the pandemic.”
“Employment levels have yet to return to pre-pandemic levels which is bad for businesses who cannot fill vacancies and bad for people missing out on the opportunity to do well for themselves and their families.”
The Prime Minister, we are told, has now asked the Work and Pensions Secretary to examine what is holding back workforce participation and will conclude that work early in the new year.
This is urgently required in Scotland too. Today, there are 48,000 more individuals in Scotland not seeking work compared to 2019. In total, 187,000 Scots are currently economically inactive due to long-term sickness. The cost in terms of the loss of economic potential is £5.9 billion per year.
The Scottish Government should be thinking urgently about how to support those who can work, get back to work.
The answer may lie in another area of their responsibility. There is clear evidence that one of the reasons for the increase in economic inactivity is the vast NHS waiting list. In a Our Scottish Future report two weeks ago, we estimated that rising waiting times are, as a result, costing the Scottish economy £700 million a year from people staying off work due to ill health, rather than receiving treatment and returning to employment. Never mind the human cost.
So the second issue the Scottish Government should look at in Mr Hunt’s statement is the question of NHS reform.
The Chancellor announced that former English Health Secretary Patricia Hewitt has been asked to examine how to make NHS England more efficient. And while NHS England and NHS Scotland are separate, there is the same core challenge – how to smooth the path between hospital care and social care. The SNP is pressing ahead with its plan for a National Care Service, despite widespread concern about the cost and effectiveness of yet more centralisation. A smarter move would be to pause and take part in Ms Hewitt’s review and to see what can be learned by comparing notes. The Scottish Health Secretary Humza Yousaf has gained a reputation as somebody who doesn’t like working with his counterparts across the UK (in contrast to his canny predecessor, Jeanne Freeman). Here’s a chance to course correct.
Stato-gate
Scotland’s political village has been consumed over the last week with a row over the use of statistics, and particularly the long-standing claim that Scotland has 25% of Europe’s renewable potential on and around our shores. Persistent digging by the admirable Sam Taylor of the think-tank These Islands has now revealed this to be complete twaddle.
Accusations are flying that SNP and Green Ministers lied repeatedly by citing this figure. But I’m not sure that’s quite right. Lying is the conscious act of speaking something you know to be untrue. I don’t think the SNP and Green Ministers were doing this. Rather they were just parroting a shonky stat that had ingrained itself into Scotland’s popular consciousness over the last decade and a bit. The story is actually more interesting and troubling than whether a few Ministers deliberately mis-led parliament. For it shows what happens when an incredibly dominant political party with unquestioning faith in its own rectitude tells people things they’d like to be true. Everyone ends up believing it and before you know it complete hogwash slips through the net to emerge as fact. In other words, this isn’t about people lying, it’s scarier than that. It’s about how a largely honest society ends up detaching itself from reality.
The problem for Unionism, as we all know, is that it won’t win over nationalist voters over by lecturing them that nice-sounding untruths about Scotland are, indeed, untrue. This is why it’s important to focus on solutions. For example, on this particular matter, by improving the national grid so that more renewable electricity in Scotland can power homes across the UK. For more detail, see here.
Trussonomics lives on…in Skye
What a curious interview with Ian Blackford, the SNP’s Westminster leader, on Radio 4’s Today programme on Friday. The SNP Westminster leader – fresh from seeing off a challenge to his leadership from backbench MP Stephen Flynn - was challenged by Mishal Hussain to set out whether the SNP will copy Mr Hunt by lowering the threshold for the higher rate of tax from £150,000 to £125,000. It seems a sure bet that the SNP will now do so, but the former investment banker-turned-MP did not sound convinced. Asked directly whether the government in Edinburgh would follow suit, he replied:
“What I would rather see is that the Scottish Government has the kind of control over the levers that Westminster has to borrow and tax.”
Ah, those mythical levers. If only we had some in Scotland – for example, if only we could decide our tax rates, tax thresholds, create new benefits, have control over our skills, economic development and education, create bonds….
Oh, hang on.
Anyway, after Ms Hussain pressed Mr Blackford again, he replied, reluctantly:
“We could do that (lower the threshold on the higher rate) but then we would have to reduce spending on public services in Scotland.”
I don’t think Kwazi Kwarteng could have put it any better: it appears Mr Blackford agrees with right-wing Tories, Arthur Laffer, and the Institute of Economic Affairs that soaking the rich will only end up reducing funds for the government. As Liz Truss contemplates the ruins of her career, at least she can draw comfort that her economic philosophy lives on in Ross, Skye, and Lochaber.
ENDS