Earlier this month, we jointly hosted the latest in a regular series of roundtable events in central London with our colleagues at SCDI. The focus of the latest event was the Scottish Government’s 2018 Programme for Government and implications for the Scottish business community.
Unveiled by the First Minister on the 4th September, the Scottish Government’s 2018 Programme for Government focuses on a number of key economic priorities. These include helping Scotland to make the transition to a low carbon economy, investing in Scotland’s infrastructure, protecting the Scottish economy from the perceived negative effects of Brexit and encouraging more Scottish businesses to export goods and services in larger volumes.
Featured prominently among the ‘low carbon’ headlines: A commitment to invest £15 million in the installation of 1,500 electric vehicle charging points, a substantial increase in low-carbon transport loans and ultra-low emission vehicles in public sector fleets, a reconfirmation of a commitment that Scotland will become a carbon neutral country by 2050 and action on plastic waste including the setting up of a deposit return scheme and a ban on plastic-stemmed cotton buds.
On the infrastructure front, the programme includes a commitment to close the infrastructure investment gap between Scotland and other G7 countries by the end of the current parliament, a £7 billion increase in investment over current plans. Also unveiled with much fanfare was a proposal to set up a new Scottish National Investment Bank, providing ‘patient finance for ambitious companies’.
Following the recent defeat by a unified front of Holyrood’s opposition parties of John Swinney’s proposal to introduce standardised Primary 1 assessments, education is likely to continue to be a major political battleground during the year to come.
11 years since first taking power, opposition parties are keen to portray the SNP minority administration as one that has run out of steam and ideas. They also point to the 15 bills introduced as part of the 2017 programme, of which only two have so far passed into law. The Conservatives in particular accuse the Scottish Government of pursuing an ‘anti-business’ agenda and are likely to set out their stall on that front with attacks on taxation policy and perhaps also the least popular aspects of the Barclay review of non-domestic rates. They have also greeted proposals for a Scottish National Investment Bank with a large degree of scepticism.
Meanwhile, Labour has made clear its intention to outflank the SNP on the left, accusing the Scottish Government of lacking ambition or the radical vision needed to tackle inequality.
The Greens, having brokered agreements with the SNP over the past two years since the 2016 election to allow the annual budget bill to pass, have declared they will not countenance entering negotiations this year unless the Scottish Government shows real commitment to meaningful reform of local taxation. Finding any kind of majority consensus on a replacement for the council tax has eluded the SNP before and they are unlikely to want to go down that road again, which may mean that they cast about for another partner to get this year’s budget through.
The Lib Dems perhaps? They accuse the Scottish Government of administrative ‘meddling’ on education and have shown an ongoing commitment to campaign hard on issues including mental health. Their campaign priorities might point the way to potential grounds for a Scottish budget deal this year.
Clearly, this year’s programme for government has been unveiled against the backdrop of Brexit and the prospect of a potential second referendum on Scottish independence. On the latter, Nicola Sturgeon continues to play a waiting game and has urged party activists to be patient. Initially lukewarm on the idea for fear of creating an unhelpful precedent for Indyref2, the First Minister has latterly expressed her support for a so-called ‘People’s Vote’ on the final Brexit deal.
Although polling around various Brexit scenarios currently shows only a modest shift in opinion towards independence, it is still possible that Scottish public opinion could shift much more radically in the event of a hard Brexit or a no-deal scenario actually happening.
The political arithmetic of Brexit and Indyref2 in Scotland remains complex. For instance, almost a third of Scots who voted Yes to independence in the 2014 referendum went on to back Leave in the 2016 EU referendum. This goes a long way to explaining why, fearful of splitting the Yes movement ahead of any second independence referendum, the First Minister has been so deliberately vague about the process for an independent Scotland potentially rejoining the EU. Would this require a further referendum for instance?
The SNP also face another paradox in that the seemingly easiest route to independence might lie in Brexit going ahead but then proving to have a disastrous impact on Scotland’s economy. That scenario could do fatal damage to the case for the Union between Scotland and the rest of the UK continuing and arguably do the most to bolster the case for independence. This raises questions within SNP circles as to how actively they should be campaigning to stop Brexit from happening when going through with it could provide the best chance of building majority support for independence in Scotland.
With so much political uncertainty currently in the air, there appears to be no prospect of a second independence referendum taking place very soon – despite all of the pressure being placed on Nicola Sturgeon from her activist base, she remains pragmatic and very much alive to the risks of calling a referendum too soon.
A lot will hinge on what actually comes to pass on the 29th March next year, the official deadline for the UK formally leaving the EU. With much of the talk at Westminster currently focused on prolonged transition periods, it may yet take a lot longer for the Brexit fog to clear. Whatever the outcome, it seems likely that the timing of Indyref2 will continue to be fraught with challenges. Brexit is also likely to continue to dominate political debate at Holyrood as much as at Westminster – all of which could hamper progress on this year’s Programme for Government and mean that the backlog of un-passed legislation in the Scottish Parliament gets even longer.