Not Pensions Again
I know, I know, but this really is a big thing.
It’s been quite a week. Ian Blackford inadvertently announced a major change in SNP pensions policy. I think most of us assumed he had made a mistake, that a tweet from someone on the fringes of nationalism had become trapped in his mind and escaped in the middle of an interview.
It turned out they really have changed policy. I won’t repeat all the details set out in the last issue, but in a nutshell, it used to be the SNP’s policy that the pension entitlement accrued by both people still working and people already retired would become the responsibility of a separate Scottish State. For more than a decade this policy was uncontroversial - of course, Scotland will have to pay for pensions.
Now the SNP Government have confirmed their position is that paying the pensions rights accrued by both of these groups would be a responsibility for the rest of the UK.
There will be lots of debate about the details of this new policy, but one thing is clear, and must not be forgotten in the noise: this is a new policy. Nicola Sturgeon had offered a guarantee that pensions would be protected, now, at best the security of our pensions would be a matter for negotiation, at worst their payment would be a matter of bitter dispute.
The question is why would the SNP change policy?
Searching down the back of the couch.
For the last few years staying in the U.K. has been worth about £10bn a year for Scotland. Our share of redistributed UK taxes is equivalent to the entire hospital budget. Losing it, alongside all the other costs of setting up a new state, means austerity that only the most committed nationalist would believe a price worth paying.
The social democratic promises that underpin the appeal of the campaign to leave the UK have no credible economic basis so the entire nationalist movement has been searching for a way to fill the gap.
The now-defunct sustainable growth commission tried to fill some of the gap by suggesting huge cuts to our defence budget. Bad news if you’re a shipbuilder or care about our role in the world, but even spending nothing on defence would only dent the black hole. Others flirted with the idea of dropping the commitment to take our share of the UK’s national debt. Not a great signal to send about the creditworthiness of a state borrowing on international markets for the first time, and one wonders how you simultaneously welch on the UK while asking them to continue to collect our taxes for years to come. But even defaulting doesn’t do the job for the SNP’s strategic need.
So they went looking for bigger ticket items and the biggest line item in the budget is pensions. If they can create doubt over who pays for the most expensive single thing the state does, paying pensions, then they believe it will create a bit of wiggle room. A reasonable person would think that if the exam question of how to improve our public finances then pretending that pensions could be free is cheating.
With the oldest voters the most firmly opposed to leaving the UK, SNP strategists must have calculated that dropping the guarantee made to pensioners in order to avoid attacks over the impact of austerity on younger voters was a trade-off worth making. We’ll get to the politics of this judgement in a moment, but we can all agree that throwing pensioners overboard because they won’t vote for you in a referendum really stinks as a policy.
The public debate will be full of debates about whether seceding is the same as emigrating and countless other details. The clear waters of what was once a simple guarantee will have been muddied by naive on-the-one-hand-on-the-other commentary and the SNP will think they’ve achieved their aim of creating some fiscal space. But this change in policy isn’t as smart politics as they think.
Pensions aren’t just an issue for old people anymore.
Firstly it isn’t just pensioners who are being screwed over here. Nicola Sturgeon has also dropped her promise to honour the pensions rights accrued by every single working person in Scotland. The impact of this move will trickle all the way down the population pyramid. If pensions really was only a concern for the core No vote , the SNP abandoning their pensions guarantee makes it a worry for everyone in work.
The last few days caused more than a little deja vus for me and that made me realise another reason why this might be a disaster for the nationalists.
In 2014 the Plan B questions dogged the SNP and currency became the central issue of the campaign.
They believed they could style it out, give half-answers and then pivot to an emotional appeal to be angry about ‘them’ taking away ‘our pound’. They thought they could throw off enough smoke so that people wouldn’t see what it was really about: they were asking us to give up something that people valued and wouldn’t say what would replace it.
The plan B question was really: what if what you claim can be negotiated can’t?
With hindsight, it seems incredible that the SNP thought they could get through an entire referendum on that basis. They judged that avoiding giving the honest answer that people didn’t want to hear - we’d have another currency other than the pound - was the strategic prize. In practice, their evasiveness simply reinforced a feeling of doubt that people had about whether leaving the UK made economic sense.
You can see the same model in Ian Blackford’s interview with Representing Border and Nicola Sturgeon’s response to the pensions question at FMQs: half-answers with no definitive detail, followed by appeals to nationalistic antagonism. ‘It’s oor pound’ has been replaced with ‘its oor pension’.
There was always a weird paradox for the SNP on currency. To follow them you had to simultaneously accept the idea that those people down south were so repulsive that we can’t work with them anymore, but also that they were so reasonable that they would agree to a currency union.
Now we are to believe monsters have inexhaustible generosity. Those awful people are going to relieve us of having to pay for our pensions for the foreseeable future. There will be an Ebenezer Scrooge style transformation.
The strategic trap of the Plan B question was that on the most important issue for undecided voters, the economy, the SNP chose to hand a veto to their opponents. The UK government needed only to tell the truth - that a currency union wasn’t a goer - to destroy their campaign.
That lesson is lost on them. This week they handed the UK government a veto over not just pensions but, given it is likely to be the central column of their whole fiscal argument, the entire economic case for independence.
The UK’s parties need only state the obvious: it is inconceivable that any UK government would be able to sell its citizens on paying for the bills for people who decided they preferred a divorce to remaining part of the family.
The first and most important question to the SNP after this week is why have they dropped their promise to pensioners?
But that leads on to the next, more strategically difficult question:
If the people you have cast as the villains in our national story won’t gift us £8.5bn, what’s your plan for the deficit? What is, to coin a phrase, plan B?
Couple of points on this, Blair.
The arguments of the SNP and their supporters depend largely on ignoring the difference between the *current* UK, ( England, Wales, Scotland and Northern Ireland) which has a responsibility to pay future pensions to all of those entitled, and the future "remaining UK" after independence ( England, Wales and Northern Ireland.)
Perhaps we should be making this distinction clearer at all opportunities, by referring to the remaining nations in full as "England, Wales and Northern Ireland" ?
It's superficially plausible to someone who isn't following the details for the SNP to argue that "the UK has an obligation to pay our pensions".
But the claim is actually that after independence, "taxpayers in England, Wales, and Northern Ireland will have an obligation to pay our pensions, and taxpayers in Scotland will have no such obligation" - which is much more clearly nonsense.
I wonder whether the SNP's intention is to generously announce later that they will protect Scottish pensioners against the wicked Westminster government which wants to steal their pensions, but that they will be pursing a claim post-independence to make Westminster pay for them. And then assume in all of their financial figures that they will win such a claim, to make the spending numbers add up.
Absolutely agree, the SNP have never had a credible financial plan because there isn’t one but this totally exposes them.