Iain Macwhirter: Growth Commission report brings new hope to Labour

All week, Labour have been pinching itself in disbelief. For months, it has been banging on, pretty unconvincingly, with the line that the SNP is the new “austerity party”, with cuts in local government and constraints in the NHS.

Now, Nicola Sturgeon, who was always thought of as a dedicated left-winger, has found herself defending a document that reads in places like one of George Osborne’s Budget speeches.

Labour sees the Growth Commission as an unforced error comparable to Theresa May’s snap election last year, which lost her a Tory majority in Parliament. It has helped breath life into a moribund membership that has failed, even under Jeremy Corbyn, to shake off the “Red Tory” image. Now here is the SNP making bold targets for deficit reduction and promising to harness an independent Scotland to the disciplines of Bank of England monetary policy for the foreseeable future.

READ MORE: SNP ministers start work on recommendations from the party’s Growth Commission

Prominent nationalists like the author Michal Fry are proclaiming the “death of socialism” in the movement. Actually, it’s some time since the SNP declared itself to be a socialist party – what we may be seeing is the end of it as a Keynesian, social democratic party. It certainly looks like a settling of accounts with the Left. Influential nationalist bloggers like James Kelly are saying good riddance to disgruntled Yessers like the writer/rapper Darren McGarvey, author of Poverty Safari. If so, Labour will be welcoming them with open arms.

Labour was shattered in 2015 by the loss of 40 Scottish seats in the General Election. The SNP post-referendum landslide was on the basis of the optimistic and buoyant 2013 White Paper on independence which captured the imagination of thousands of Scots and energised the Yes campaign with a message of hope. This has now largely been repudiated by a much more downbeat prospectus for an independent Scotland that, in its early years at least, sounds like it would be the UK writ small – a country ruled by the same economic orthodoxies.

The SNP lost one-third of its seats after Nicola Sturgeon cancelled her referendum plans last year. It takes only a few percentage points in the polls for Labour to largely regain the position it lost in the 2015 tsunami. Its left-wing leader, Richard Leonard, had been making little progress against Ms Sturgeon. But with the independence movement now divided as never before, with a referendum all but abandoned and with Ms Sturgeon’s personal popularity waning, Labour sees itself recovering its position as Scotland’s default, social democratic party. I don’t know about that, but it’s certainly in with a shout.

READ MORE: Further splits in Yes movement over SNP's Growth Commission report

The Growth Commission has surely killed the prospect of an early independence referendum. A decade and more of belt-tightening, currency instability and the departure of the banks doesn’t sound like a manifesto for one. Many in the SNP appear to believe that the “realism” of the Growth Commission makes the Scottish Government seem more responsible, credible and favourable to newspaper columnists. And that’s a good thing isn’t it? However, the SNP didn’t get to where it is today by being respectable, media-friendly and sounding like New Labour circa 1998.

Gordon Brown’s famous preoccupation with “prudence” – low taxes, flexible markets and fiscal Golden Rules – which was echoed in the Growth Commission document may have gone down well in the South of England in the 1990s, but it was never a winner in Scotland. The SNP under Alex Salmond repositioned itself in the noughties as a left alternative to New Labour, on issues like the abolition of tuition fees, the NHS market reforms, selective schools, PFI, trades union rights. It thrived by adopting Labour’s abandoned spending policies on free prescription charges and school meals.

The SNP’s snatched victory in 2007, and the landslide of 2011, were largely based on Mr Salmond’s “social wage”. These policies would surely not be sustainable in the kind of Scotland the Growth Commission envisages, because the country would be born under the burden of deficit reduction. At any rate that is the interpretation of the pro-independence think tank, the Common Weal, and economically-literate former SNP MPs, like George Kerevan.

READ MORE: Ruth Davidson throws down gauntlet to May on immigration, NHS and tax

Many SNP supporters on social media have been contemptuous of the independence Left with their “money trees” and “unicorns” and welcome the opening to the political right. One prominent social media commentator described the leftists as the “brats” of the movement who only want independence “their way”. Many in the SNP think that abandoning “tax and spend” policies will make them more popular with ordinary middle class Scots. This is most unlikely.

Middle-class Scots who voted No will simply see the report as confirming their view that independence is a leap in the dark, fraught with financial risks, which are not worth taking for the sake of a flag. The praise heaped on Andrew Wilson from Unionist columnists, like Alex Massie and Euan McColm, is not a sign that they endorse independence, but a celebration of their having been right all along about the deficit and currency. They are burying him with faint praise.

It’s not clear that the SNP can win without the Left. The 2014 Yes campaign succeeded in mobilising large parts of Scotland who never voted before and achieved the unprecedented 97 per cent voter registration and an 85 per cent turnout. The Radical Independent Campaign, Women for Independence, National Collective and the like were among the more dynamic elements. Without their enthusiasm, online propaganda and door-to-door activity in working class areas, it is most unlikely that the result would have been so close. Could you imagine the Yes wish trees being inspired by a vision of Scotland as neo-liberal New Zealand, where inequality is increasing even faster than here?

Of course, Ms Sturgeon insists that public spending would increase in an independent Scotland. But if so, why chain yourself to rigid spending-reduction targets based on the questionable assumptions of the GERS deficit figures? As even the chair of the Growth Commission, Andrew Wilson, accepts, Scotland is committed to rejoining the European Union, not becoming an isolated free market economy like New Zealand or Brexit Britain. So why even raise it? Politics is about hope not hardship, and hope has stirred in Scottish Labour after a long-time dormant.

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