Edward Heath - a view from Scotland
 

Like many people, I was saddened to hear earlier this week of the death of former Conservative Prime Minister Edward Heath. Although he earned a reputation as being a sometimes rebarbative character, the tributes paid this week have been both generous and genuine, irrespective of where they came from on the political spectrum.

From SNP leader Alex Salmond, we had the following: "Edward Heath was one of the few Prime Ministers who left a lasting legacy in his decision to take the country into the Common Market. Certainly, no Conservative leader since has shown anything like the same understanding or sympathy to Scottish concerns".

The 'understanding or sympathy to Scottish concerns' is a reference to Heath's 'Declaration of Perth' in 1968, where he committed the Conservative party to home rule. Although his pledge was dumped in opposition a few years later by Margaret Thatcher, his response to Winnie Ewing's 1967 victory in Hamilton played a significant part at the time in forcing Labour to take seriously Scottish aspirations for self-government.

Under Thatcher, Major and their various Scottish satraps, any Conservative member caught even hinting at support for home rule was denounced and sent to the political equivalent of Siberia. Despite this and whether through mischief or principle, Heath stuck to his earlier convictions on devolution, reminding people during the turmoil of the Thatcher years that there was, or at least used to be, an acceptable face to the Tory party in Scotland.

Rather than 'emerge' from a magic circle dominated by the landed aristocracy, Heath was the first modern Conservative from a working class background to lead his party. Although the Selsdon Park conference which laid the foundations for what later became known as Thatcherism took place under his leadership, he was a Tory who, by today's standards, would still have stood significantly to the left of Tony Blair.

As well as taking Britain into the EEC, Heath's premiership introduced some sanity to the country through currency decimalisation. He also acted decisively in 1968 by sacking Enoch Powell from the Shadow Cabinet, following the infamous 'rivers of blood' speech in which Powell set out what he saw as the dangers of mass immigration to Britain.

Suffering from poor relations with the trade unions and having only a small majority in Parliament, Heath's period as Prime Minister was rather more turbulent than he would have liked. His task certainly wasn't made easier following the defeat of Barbara Castle's 'In Place of Strife' proposals on industrial relations under the previous Labour government.


Heath's own humiliation at the hands of the National Union of Mineworkers helped clear the way for Margaret Thatcher's crackdown on the unions a decade later. Given the economic problems sowed in the late 60's and early 70's which came home to roost later that decade and the Labour and Tory response to these while in office, perhaps Heath's government could be said to have been the last which truly followed the social and economic 'consensus' which existed in Britain from WWII onwards.

Maybe as a result of serving as the Government Chief Whip during the Suez crisis of 1957, Heath was sceptical about the so-called 'special relationship' between Britain and the USA. However, no-one could ever have used this to accuse him of anti-Americanism and get away with it, since he had been mentioned in dispatches for his part in the Battle of Normandy in 1944 while fighting alongside US forces..

Along with Dennis Healy and Jim Callaghan, he was one of the last of a generation of political leaders to have seen active service in the armed forces. The restraint often counselled in military matters by the politicians of that generation invites comparison with the gung-ho attitude held by many of today's leaders, most of whom have only ever seen the carnage of war on a TV screen and have never been asked to kill in the name of their country.

Heath also had that rare quality of a 'Hinterland' beyond politics. While aware that I could be on thin ice here myself, there is now a well-trodden career path to Parliament of going to university, getting elected to the Student Union, working as an MP's researcher, doing a short stint as a lobbyist or in the voluntary sector, then earning your spurs standing in a no-hope seat before later getting elected in a safe seat.

While in some respects Heath's journey to the House of Commons followed a similar route, there were other strings to his bow. Heath was an accomplished musician, winning the Balliol College organ scholarship while studying at Oxford and conducting at the Royal Albert Hall.  He also captained the winning British yachting team in the 1971 Sydney-Hobart race, while still serving in Downing Street.

It's difficult to imagine many of today's aspirant leaders having such a breadth of interests in which they excel outside politics. Many of today's hacks, terrified of doing anything unconventional before entering politics and with few interests other than the usual intrigue of who's up and who's down, would probably now view a man of Heath's talents with something approaching suspicion and hostility.

Questions remain over his government's handling of the events leading up to Bloody Sunday. However, his government's actions in the lead-up to the Sunningdale Agreement and its aftermath ended the sectarian state in Northern Ireland. Although movement towards meeting the concerns of the Catholic minority in Northern Ireland has been vindicated by history, setting this course cost the Tories the support of Ulster Unionist MPs after the February 1974 election, ushering Harold Wilson back to Downing Street.

He nurtured a legendary grudge against Margaret Thatcher, whom he reportedly never forgave for deposing him as Tory leader. In a parody of lady's 1982 exaltation to the nation following the recapture of South Georgia from Argentine forces, his response to her resignation as Prime Minister in 1990 was reported to be 'Rejoice! Rejoice!'

Latterly, he played a role on the world stage as an advocate for greater European integration. However, it may be for his role in securing the release of the British "human shields" held by Saddam Hussein prior to the 1990 Gulf war, that he will be best remembered by current generations.

Heath's passing serves as yet another reminder of how the Tories have drifted in the last 3 decades from the 'one-nation' traditions of Ian MacLeod and Harold Macmillan. Perhaps Heath's funeral may also help remind the current crop of Tory leadership hopefuls just how far they need to travel if they are to recapture the moderate ground which their party once took for granted as its natural territory.

Fiscal Freedom-Come-A-Ye
 

After the 'yes, yes' vote in the 1997 devolution referendum, the Scotland Act allowed the Scottish Parliament to vary the basic rate of income tax by up to 3p in the pound.  So far, the only party to propose using this power has been the SNP, when it pledged in 1999 to forgo a 1p cut planned by the Labour government. However, there have been rumblings in the last few weeks within both the SNP and the Tories about using the powers if there is a change of government after 2007.

This time, however, thoughts are turning to a reduction in tax. The Conservatives are reported to be considering a 3p cut in the basic rate of income tax, reducing the rate in Scotland from 22% to 19%. While no-one in the SNP has yet been bold enough to come up with a firm tax-cutting proposal, the fact it is being discussed at all shows the extent to which the political ground has shifted in Scottish politics since 1999.

Predictably, Labour spokespeople have been quick to croak for doom. Margaret Curran MSP, Labour's chief whip in the Scottish Parliament, has warned that any tax cuts would have to mean public spending cuts as well. Citing schools and hospitals (since no-one objects to spending money on educating the young and curing the sick), she claimed that tax cuts would mean less would be spent in these areas than would otherwise have been the case.

Curran's argument is disingenuous for a number of reasons. However, there is also an arrogance in what she says. 'You can have the power to vary tax, but you must promise not to use it', the theme seems to run. The SNP's proposed 1p increase in 1999 was bad, but Gordon Brown's subsequent 1p rise in National Insurance contributions was OK. Proposals to cut tax are irresponsible, yet Labour's cut from 23p to 22p, which after all prompted the penny for Scotland policy back in 1999, was somehow fine.

However, though some might counter Curran's argument by referring to the 'Laffer Curve', there is a more fundamental line of defence available to would be tax-cutters. That is, in every year of devolved government so far, there has been a huge budget under spend - £435m in 2000, £718m in 2001, £643m in 2002 and £515m in 2003.

This suggests either that the Executive cannot budget properly, or that despite Scottish taxpayers being net contributors to UK coffers, the Executive is still receiving more tax revenues back from the Treasury than it knows what to do with. Whether one or both statements are true, few would dispute that better management of resources could yield a handsome surplus for a Scottish Finance Minister, who thanks to the Scotland Act need never worry about the budget deficits which proper governments sometimes incur.

The size of the annual under spend alone makes it possible for social democrats to contemplate tax cuts, even without reducing actual government spending from its current level. Tax could be cut in Scotland and not a single school, nor a single hospital, need be deprived of a single penny which they were going to get anyway.

I was against the 'Penny for Scotland' campaign in 1999, as I believed it would increase the tax burden disproportionately on lower and middle income earners. However, I believe a cut in the basic rate of tax has the potential to reduce disproportionately the burden on lower and middle income earners, which has to be a good thing.

Government spending always risks 'crowding out' the private sector. In the case of the police force and free personal care for the elderly, I believe this is a good thing. However, allowing people to keep more of their own earnings, to spend or invest as they see fit, would put money back into the economy in a different way.

Investment and consumer spending (as opposed to consumer credit) would increase, allow existing enterprises to flourish and new ones to emerge. Seeing the economic and social enterprise which could result from any cut is worth a lot more to me than knowing around £500m swills around Whitehall each year because the Scottish Executive can't do its sums properly.

Since the Scottish Parliament can't alter tax thresholds, cutting the tax rate is about the only way it can reduce the tax burden on lowest earners. By letting people keep more of what they earn, work becomes more attractive and people can get themselves out of poverty with less need for inefficient and bureaucratic tax credits. If spending and investment by individuals increases as a result, it creates more jobs and encourages more people into work. Slowly, surely, a virtuous cycle develops, which results eventually in more economic activity to tax and higher revenues for the government.

The clinching argument for me is the recent rapid growth of the Scottish public sector. The tendency in any organisation is always to grow in size and to increase its responsibilities, without necessarily doing so effectively. While the desire to cut costs and boost profits acts as a brake on this tendency in the private sector, no such restraining force exists in government. Yet the growth in numbers employed in the public sector and the salaries paid continues to spiral, free from any apparent government control or moderating influence.

Dripping with management school gobbledygook, Scottish newspaper recruitment sections advertise for 'strategy implementation coordinators' or 'play facilitators' (didn't we used to call them 'nursery school assistants' ?) and positions with similarly baffling job titles. East Renfrewshire Council even advertised last month for a 'Real Nappy coordinator' on a salary of £25,000 p.a. - presumably to badger hard pressed new parents into using terry nappies rather than disposables.

Of course, its easy to pick examples which support your case and to downplay the valuable work which those employed in government do for us every day. However, unless you are familiar with the language and nomenklatura of the public sector, it remains very difficult to move into as an experienced outsider, which does little to bring fresh ideas to the governance of Scotland.

The days when a civil servant could complain about their pay compared to their friends in the private sector are long gone. At a time when pay freezes or cost of living increases are the norm in manufacturing and service industries, only those in the public sector continue to enjoy guaranteed salary increases and progressions up a pay scale. Rational people seeking job security and comfortable final salary pensions are thus drawn to the public sector, removing talent from the private sector and stifling innovation and growth.

The bigger the state gets, and by the state I include the non-companies who run PPP projects and other privatized infrastructure, the more people will depend on it to make their living and harder it will be in future to roll back spending even slightly. We enjoy Swedish levels of spending in Scotland but don't enjoy anything like Swedish outputs, levels of growth or quality of life. It's time for the government to spend its cash more wisely and if that money can't be spent, it should be given back to the people.

Fiscal freedom, Independence and making all levels of government more responsible for collecting the taxes they spend on our behalf remain the most compelling answer to this dilemma for me. Until that day, though, tax cuts could let us pose some of the questions we need to ask if we are to improve our quality of life as a nation and cut the ties binding us to Whitehall. I look forward to the debate.