David Miller, 2 April 2008

The SNP government has played a bit of a blinder in its first ten months, consistently wrong footing Labour and the rest of the unionist opposition.  It is still too early to come to a definitive judgement on the SNP record in relation to business, although some early lines of development are pretty clear.  These can be divided into two main areas.  First is the area of economic policy and the general orientation towards business interests.  For the most part this is business as usual, little different from the policies pursued by the neo-liberal labour/Lib Dem administration.  Second is the area of social policy where the SNP has almost appeared to be a social democratic government.  Among the announcements was Nicola Sturgeon’s commitment that ‘We reject the very idea that markets in health care are the route to improvement’.¹  Other statements include ‘positive commitments’ as the STUC’s Grahame Smith put it, on prescription charges, prison estate, more free school meals and nursery places.²  Democrats will applaud the sentiments and make sure they examine the details.   

The other area to watch is the much vaunted bonfire of the quangos.  There seems to be very little action here yet.  This is not one of those dull media feeding frenzies on broken manifesto commitments but a serious question about re-democratising the public sector.  Yes, this means resisting contracting out, shared services and all the other means for the corporations to get their hands on free money and attack terms and conditions. But the other pressing issue is the fact that legions of political appointees gum up the possibility of serious opening up and accountability.  Many of these people would need to be removed in a bonfire of the quango-crats.  Two examples will suffice.  Sir Ken Collins at SEPA is a former Labour MEP.  To be fair his long experience as chair of the Environmental committee at the European Parliament was a significant qualification for the job.  But SEPA has not been able to play the role of a proper watchdog on environmental issues because it has been too close to the Executive and too willing to be influenced by big business.  Collins himself is still politically active. As well as being a public servant he acts as an advisor to the European Public Affairs Consultants Association – the EU lobbyists lobby group – which is determined to resist openness and transparency.  This is the kind of conflict of interest of which any public servant should beware since advocating for corporate interests by definition undermines the public interest. Such conflicts pale, however, beside the extraordinary fact of the appointment of Sir Ian Byatt and a whole crew of neo-liberal ideologues to run the Water Industry Commission for Scotland.  Their ostensible role is to make sure that the Scottish Water is run efficiently within the public sector.  But from the beginning they have been more interested in pushing it towards privatisation.  This suits their friends and allies in the think tanks and private water companies well.  In fact it suits pro market consultancies such as Frontier Economics, too.  Frontier is retained as a consultant to the Byatt led WICS and - would you believe it? – Frontier in turn employs Byatt as a ‘senior associate’.  The continuation of such appointments is an affront to the most basic principles of public life.

After gutting the quangos of pro market place people, the SNP might then be tempted to fill the resulting places with its own stooges.  This would be an historical mistake as it would lead inexorably to the reinstatement of the institutionally corrupt layer currently in post when the government changes.  For Scotland to function at anything approaching a democratic polity changing the people needs to be accompanied by changing the structures. The quango-cracy is in it self anti democratic and more or less insulated from popular pressures.  So, fundamental reform and direct democratic input is required. This might mean the wholesale abolition of many of these organisations.

In fact though the whole machinery of government needs overhauled.  The senior management at the old Scottish Executive ceased some time ago to be the impartial civil service of old.  They have made clear statements on their own behalf indicating they are almost to a person signed up to the neo-liberal reform agenda.  All the rhetoric about bringing business ideas and expertise to the public sector is itself a betrayal of their responsibility as public servants.  No sign so far of any movement here.  At a more visible level the direct role of business in government seems not to have abated.  Scottish Financial Enterprise (a business lobby group, despite the name suggesting it is part of the public sector) is still able to shape policy on financial services by having 7 out of 12 seats on the Financial Service Strategy Group and ten of seventeen on the Financial Services Advisory Board, both of which combine to run Scottish government policy on financial services.  This composition and the fact of one union rep on both organisations is the same as under Labour. The Scottish Executive Management Group has been renamed the Scottish Government Strategy Board and has lost one of its ‘non-executive directors’, the corporate lobbyist and networker Shonaig Macpherson.  The other two (Bill Bound formerly of PricewaterhouseCoopers and David Fisher of HBoS) remain. No changes there.

Meanwhile in the Parliament the one area where Scotland could said to be ahead of Westminster was on openness and transparency particularly in relation to lobbying, where the Standards Committee declared for regulation of lobbyists in 2003.  Since then the European commission has launched the European Transparency Initiative and even the Westminster parliament is holding an inquiry on lobbying.  At the Scottish Parliament the issue appears dead.  The amazing antics of the Scottish Parliament Business Exchange show how much contempt the Parliamentary bosses have for democracy and transparency.  The exchange is alleged to be an educational venture to teach MSPs about business and vice versa.  It claims to have 'no connection with lobbying in any form' and at 'all times operates in an open and transparent manner'. Neither of these statements appears to be true. The interim director until January 2008 was Devin Scobie, himself a lobbyist who ran Caledonia Consulting, a own lobbying consultancy while at the SPBE.  There is no public information about whether any of his clients are also SPBE members.  However, we do know that former Pfizer lobbyist and head of the SPBE on the business side, Lynda Gauld, also works at Caledonia.  As if that is not enough, other connections between the two organisations include the former member of the SPBE and former MSP, David Davidson, who now also works at Caledonia.  The new ‘Chief Executive’ of the SPBE from January 2008 is Arthur McIvor. McIvor is a former marketing man from Royal Mail who recently set up his own consultancy - Art McIvor Consultants - which seems to offer high end lobbying and hospitality services.  The SPBE is in other words a virtual gateway for lobbyists into the Scottish Parliament. No sign so far that this will change under the SNP or that the issue of lobbying regulation will come back on the agenda, despite the recent launch of the civil society coalition the Alliance for Lobbying Transparency.³

On economic policy the SNP are, as used to be said by the Labour Party, the Tartan Tories.  Used to be said, before, that is, the former people’s party emulated the neo-liberal, pro-privatisation policies of the Thatcher government. The deeper cut in business rates made to bring the Tories on board for the budget is a key indication.

But there are some areas where SNP policy departs from manifesto commitments or their own social democratic rhetoric.  In much the same way that the phrase ‘military precision’ is now widely understood as referring to mass civilian casualties, the phrase ‘Private Sector efficiency’ is now widely recognised as meaning inefficient, more expensive and unjust.

Two key areas to watch where there may be some potential for democratic outcomes are the Scottish Futures Trust and the mooted mutualisation of Scottish Water. The Futures Trust is heralded as an alternative to the widely loathed extortion that is PFI/PPP. Although the detail on this is yet to be worked out it is already clear that the Futures Trust would transfer public assets out of the public sector and insulate them from public accountability, much as has happened with the transfer of museums and leisure facilities from Glasgow City Council to ‘Culture and Sport Glasgow’

The issue of mutualisation of water was kicked into the long grass before the last election with Labour, the SNP and the Greens declaring their opposition to mutualisation – a back door means to bring in the banks and effectively privatise Scottish Water.  But in February amidst a morning fanfare the issue of mutualisation was back on the agenda as the SNP announced a review of the water industry.  Briefings from the First Minister spin doctors suggested a policy change.⁴ Yet by the afternoon it was clear that the relevant minister and the rest of the party were not signed up for this and the matter was downplayed.  Not a lot of sign for social-democratic optimism there as the vultures which have been circling the Scottish water industry for some years, circle closer. These are both fudges which will allow the private sector in by the back door.  They are not ‘public sector’ solutions and will end up defrauding the public and putting public services beyond direct accountability.  

All in all then, there are some signs of social democratic reform, but for the most part it is business as usual with a few frills attached.

 1. BBC Online Plans to end private cash for NHS Last Updated: Thursday, 21 June 2007, 15:21 GMT 16:21 UK
 2. STUC Response to Scottish Government Budget 14th November 2007 http://www.stuc.org.uk/press-releases/441/stuc-response-to-scottish-government-budget
3. http://www.lobbyingtransparency.org . Spinwatch.org is a founding member.
4. Steven Vass 'Ofwat backs cross-border competition ', Sunday Herald, 1 March 2008