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Scottish budget holyrood swinney

Budget madness

So what was that all about? The wheels of government nearly seized last week; local authorities prepared for an emergency council tax hike and staff cuts; there was talk of an early election. Yet, what plunged the Scottish parliament into turmoil was an eleven million pound shortfall in a home insulation programme – a sum so vanishingly small as to be lost in the small change of the thirty billion Scottish budget. Not much more than the golden parachute Fred the Shred Goodwin awarded himself when he abandoned the Royal Bank of Scotland. Could the entire system collapse over such a tiny sum?

Well, the answer is no, of course it couldn’t. What happened last week in Holyrood was a kind of parliamentary theatre, a bit like one of those dramatic reconstructions they used to run on Channel 4 before it dumbed down. A kind of ‘what if’’. All the parties in the parliament looked into the abyss of a lost budget and came racing back from the brink. Everyone is chastened by the experience, and Holyrood is probably a better place for it.

What actually happened was this: the two Green MSPs, Patrick Harvie and Robin Harper, had been trying to get a £100m free home insulation project off the ground in Scotland. Scottish homes have all the thermal efficiency of patio heaters, and half of the output of Torness power-station goes on heating the sky. It’s a very good programme, as it happens, tried and tested south of the border, which largely pays for itself in reduced energy costs. Except, of course, government has to put money up front to get the home insulation into the houses first.

Now, it appears that the Greens and the SNP came to a deal over a £33m start up of the scheme, which would have been an honourable compromise. This was being negotiated, by Alex Salmond personally, even as MSPs gathered for the budget debate on Wednesday afternoon. But the compromise came unstuck shortly before the vote. The Greens co-convenor, Patrick Harvie claimed he had not been given a guarantee by the Finance Secretary, John Swinney, that £11 million of the cash would be new money and not drawn from other budgets.

The SNP claim they had given a guarantee, and are very,very angry. But the real reason for the breakdown was that Harvie – who is under pressure from his own party for accepting the M74 extension and other road extensions in the budget – wasn’t in a position to get an endorsement from his party in time. So in a state of frustration and fury he voted against it, risking losing the scheme altogether.

It was just one of those things, really. A combination of confusion, emotion and brinksmanship. Anyway, the budget bill went down and the roof went up. Suddenly, the illusion of government disintegrated; the ship of state was rudderless. Almost immediately, councils started ringing up the Scottish Executive to find out what had happened to the money they were expecting from the budget. Might they have to make emergency council tax increases to meet their financial commitments? Trades unions were in a panic about job losses in countless public sector schemes. Firms were ringing up the Scottish Executive to find out if their contracts were going to be honoured. Now, maybe a lot of this was just needless bureaucratic fuss – but it was not entirely without foundation. The truth is that no one knows what would happen if a budget actually did fall – except that the previous year’s budget is reapplied. In a searing soundbite at FMQs Alex Salmond claimed that it would mean cuts of £1.8bn and the loss of 34,000 jobs. Labour jeered that the budget failure was a result of incompetence by the SNP.

Then, a curious thing happened. The Liberal Democrats, who had voted against the budget all along because they wanted a 2 pence tax cut, suddenly turned round and made conciliatory noises. If Alex would talk with them about borrowing powers for the parliament, they might be able to vote with the government. Then Labour made clear that they would be willing to come to a deal about apprenticeships. Initially Labour had wanted the SNP to drop its plans for a Scottish Futures Trust and its local income tax. Now, all they were wanting a handful of sweeties and a hug.

It didn’t really make sense. Why would Labour and the Liberal Democrats suddenly decide to support the budget when they had already voted against it twice? Why not just leave the mess and blame it on Alex Salmond? Well, the short answer is that they didn’t want to be held responsible for causing council chaos. Minority government cuts both ways – it is for the opposition parties to explain, if they use their majority to overturn the government’s budget, why they are plunging the country into turmoil.

The Greens, who had started it all, were largely forgotten, which may be a good thing for them, since it prevented them becoming the full target of Alex Salmond’s wrath. We don’t know whether the insulation deal is still live – the money for it may be handed to one of the other parties in the renegotiations on the budget. But Salmond says he wants to get a unanimous vote for the budget, so the suggestion is that a deal is still on the table.

The only one smiling on Thursday was Margo Macdonald, the wily Lothians MSP who quietly used her vote to win further concessions on affordable housing for Edinburgh. Everyone else was looking a bit sheepish, as the press rounded on Holyrood for playing politics with peoples’ jobs. But playing politics is precisely the point. This was an exercise in calculated political risk taking – a process of discovery if you will, in which the parties in the Scottish parliament tested their respective strengths, and the strength of the constitution, in a kind of shadow election.

Labour could in theory have joined with the Liberal Democrats to move a confidence motion and try to replace the government. The Labour leadeer Iain Gray actually requested guidance on this from the Presiding Officer, Alex Fergusson. But the opposition parties clearly decided that they were not in a position to fight any elections right now. Since they weren’t prepared to beat Alex Salmond, they had to join him, to ensure that they didn’t get the blame for losing thousands of jobs. In other words, reason prevailed. Which, when you think of it, is all you can expect from a parliament.

About @iainmacwhirter

I'm a columnist for the Herald. Author of "Road to Referendum" and "Disunited Kingdom". Was a BBC TV and radio presenter for 25 years - "Westminster Live" and "Holyrood Live" mainly. Spent time as columnist for The Observer, Guardian, New Statesman. Former Rector of Edinburgh University. Live in Edinburgh and spend a lot of time in the French Pyrenees. Will that do?


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