For a decade, the Scottish National party has successfully fused the agenda of Scottish interests and social democratic values, leaving once-dominant Labour looking unsure and wrongfooted. But the tide appears to be turning. When asked how they would vote in a general election, more Scots in the latest opinion polls backed Labour than the SNP. Things look certain to take a turn for the worse this week when the SNP announces plans to fill a billion-pound hole in next year’s budget with tax rises and spending cuts.
Unlike the UK government, Holyrood has few options but to balance its yearly budget. Inflation produced £580m more in tax receipts than projected and the SNP gambled that this would be enough for outlays, such as £100m for NHS waiting lists and higher than expected pay awards, to bolster its flagging appeal. This was a costly bet to lose. The Fraser of Allander Institute warns that the public sector workforce – which accounts for one in five jobs in Scotland – may have to shrink to fill next year’s £1.5bn gap between spending commitments and state revenues.
