Before the General Election, the Labour Party made great store about how their plans “were fully costed, fully funded” and that working people would not pay any more tax.
We now know it was a load of nonsense because not only were they unable to define a working person, but their plans to reward their union paymasters with massive public sector pay rises without deals to reform services and improve productivity, turned out not to have been fully funded at all. The so-called “£22 billion black hole” was almost entirely of their own making.
But it was the claim that working people would not face increased taxes which was the most disingenuous, firstly because some two million companies and a similar number of business owners will be paying higher National Insurance (NI) contributions from April, but also because every person, working or not, will feel the impact of higher prices as the cost is passed on to customers.
The Labour Government said that public sector organisations would be no worse off, but that means councils being forced to meet the extra cost of employment, and then hoping the UK Treasury will provide full compensation. But in the bureaucratic guddle of devolution, the Treasury sends the cash to the Scottish Government, which then pays the councils but is not compelled to pass on the full amount. In fact, it is likely that Scottish authorities will not get the full amount, in Edinburgh’s case a total of over £35m a year, because costs are higher than in England.
It’s far from straightforward, and a report to yesterday’s Edinburgh City Council’s finance and resources committee pointed out it’s uncertain there will be any compensation at all for the higher NI faced by the so-called Arm’s Length Organisations (ALEOs).
Publicly owned, but not run by the local authority, they provide services which are vital to the city’s fabric, not least of which is Lothian Buses. No compensation will almost certainly mean higher fares. Edinburgh Leisure is in the same situation, so that will mean your New Year resolution to get back in the gym or the pool is about to become more expensive, and the kids’ Sunday morning football costing more because pitch hire fees have increased.
And next Christmas your family night out to see Grant Stott and Allan Stewart in the panto will be pricier, because Capital Theatres are caught too. With the Edinburgh International Conference Centre, the additional NI bill for Edinburgh’s ALEOs next year will be £2.6m.
Against this background, Scotland Secretary Ian Murray had some cheek to tell journalists in the Scottish Parliament this week that: “We were honest with the public back in July that it will be tough. Maybe the public don’t like honesty after all.”
I don’t remember Rachel Reeves telling voters the higher cost of a bus journey, weekly swim or a theatre ticket was part of her “fully funded” spending plans, and when a politician starts attacking the public for complaining then you know the plot is being lost. At least Anas Sarwar has someone to blame when he’s not First Minister next year.
