Is Labour an anti-growth party?

The fall out from the Tory government’s cuts to tax credits continues to dominate discourse in the media. As usual most of this coverage attempts to portray the Scottish government as the guilty party in this. Labour in particular seem to be more interested in shouting SNP bad than trying to stop the cuts at Westminster. If the cuts do go ahead, then it seems that Labour in Scotland is committed to fully re-imbursing individuals for the cuts to their benefits. This will require them to find a not inconsiderable sum of around £440 million. This is an additional £440 million over and above the current Scottish budget.

Labour’s rather flimsy proposals for raising this extra money is also given pretty much a free pass in the media. However I do not intend to focus on how the money for these top-up payments may be found. Others have already written about this. What I want to do is to focus on the implications of Labour’s outright hostility to a reduction in Air Passenger Duty (APD).

In their rush to find the money to pay for mitigating or reversing the cuts to tax credits, Labour has stated that, if they were to form the government after next May’s elections, they would not implement the SNP’s proposal to cut APD.  As far as I can gather their sole reason for opposing a cut in APD is that it is a tax cut for the rich.  This was the resounding view of Duncan Hothersall, Editor of Labour Hame, in a particularly gushing piece of adoration for Kezia Dugdale. Now this seems a very odd position to take. I am sure some rich people will benefit from a cut in APD, but so will many, many people on low or middle incomes. There is no evidence whatsoever for the claim that a cut in APD will only benefit the rich.

It is even more worrying that Labour seem to be unwilling to recognise the potential economic benefits to the Scottish economy from a cut in APD. While no-one can guarantee what will happen in the future, there are very sound economic reasons in favour of a cut in APD. The tourist trade is likely to be a prime beneficiary of any cuts. A sector of our economy which employs many people. Yet Labour seems to be completely blind to the prospect of increased employment in this sector as a result of cutting APD.

Now there may well be sound economic reasons as to why a cut in APD might not lead to improved growth in the economy. However it is interesting that Labour has not produced any studies to this effect. Their sole objection seems to be that such a cut benefits the rich. It is very sad that Labour seem to be so intent on doing down the SNP that they are willing to ignore the prospect of increased growth and increased employment opportunities.

A further comment on Labour’s position on how to respond to cuts in tax credits. It is noteworthy that Labour have concentrated their fire on the SNP and not on the Tories, who are, of course, responsible for these vicious and unnecessary cuts. Labour are never willing to explain just why people in Scotland should have to pay more in taxes just to reverse or mitigate nasty decisions from Westminster. The media rarely push them to explain why this has happened. For then Labour would have to justify their claims during the referendum campaign. We were repeatedly assured by Labour that we would all be better together by staying in the UK. Seems a lot more like worse together.

 

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