Monday, 18 October 2010

Scotland and the Spending Review

Stand by for a tidal wave of bad news about cuts this week. The national security strategy today sets out the context for the defence spending review tomorrow.

On Wednesday the Spending Review proper - the government have stopped calling it the comprehensive spending review - which will outline the scale of the cuts to come.

Then, on Thursday, we will wake up and life will go on much as it did before. The cuts will start biting until next year, 2011, and people will really begin to feel the pain next summer and into 2012.

But as Alan Johnson points out, this is the week that the cuts move off the spreadsheet and start becoming real job losses in the public sector. He has just finished outlining Labour's alternative - hammering the banks.

Scotland's share of the cuts could see spending going back to 2005 levels, if you calculate that £6bn will be taken out of the block grant over four years.

Listen to Alex Salmond at the SNP conference on the weekend and you'd think that there wasn't a spending cut to be had. He promises no increase in council tax, free prescriptions, matches Labour's pledge on a living wage for public sector workers...the list goes on as if there wasn't a stringency to be found, unless you're a police superintendent or health service manager.

Apart from an over-excited editorial in the Guardian today I don't think even the hall in Perth believed the Banff bluster Salmond maintained about Scotland being a social democratic haven from cuts in the next few years.

But his approach foreshadows how, I suspect, how all the main parties will campaign in the Holyrood elections next May. While dancing around the council tax freeze they will not spell out how they will handle the diminished block grant from Westminster.

That is, all the parties except the Tories whose very un-electability enable them to speak some truths on the scale of cuts to be had and some of the left field solutions that could meet them.

Previewing Wednesday in search form some silver linings for Scotland there's little glittering on the horizon. The aircraft carriers, which were as totemic as Ravenscraig, are to be built. But that only throws forward the future of Scottish shipbuilding jobs until 2013 or so. Campaigns for the next part of the joint yards order - the huge assault ships - start tomorrow, I reckon.

The RAF bases at Lossiemouth and Kinloss look a lot less safe but the defence footprint in Scotland remains substantial. What future for RA Benbecula,

The welfare budget, on which large numbers of Scots depend, is in for major cuts and child benefit for the well off is also to go.

The cold weather payments have been protected at £25 a week, we hear, at Danny Alexander's intervention, or rather thanks to some smart scrutiny and sharp press briefing by Labour's Ian Austin.

Also health spending has been ringfenced in England and Michael Gove has succeeded in ringfencing school spending in the Education budget, thanks in part to the £7bn "fairness premium" being attached to poorer pupils. All that should have the consequence of bolstering the Barnett consequentials for the Scottish block grant though, overall, the education budget could be slashed.

We'll unravel it all on Wednesday afternoon going into Thursday. No certainties except that you cannot pretend, as Salmond defiantly did, that the Scottish budget won't involve delivering cuts.

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