THE BLOG

An Alternative Budget

09/03/2016 17:26 GMT | Updated 10/03/2017 10:12 GMT

As we approach the seventh year of Tory Budgets that Scotland never voted for, you can fully expect the column inches of your favourite newspaper to be filled with speculation of what latest rabbit Osborne will pull from his hat. A clever, calculating Chancellor will always ensure there is a Budget announcement that grabs the headlines.

This Budget, however, will be different. And here's why.

The Chancellor has pinned his economic credibility on his ability to meet three key targets. First, his ambitious target to double exports to £1trillion this decade. Second, to secure the fastest GDP growth among the developed economies. And third, to his 'Fiscal Charter' - his own target for the eradication of the deficit and a budget surplus by 2020.

But over the past few weeks and months, key economic indicators have made for dire reading for George Osborne.

On exports, the Chancellor is heading for failure. Total export sales fell from £521billion in 2013 to £513billion in 2014. The figures are moving in the wrong direction and the Chancellor is likely to fall short of his target by some £300billion.

On GDP growth, the Chancellor is heading for failure. This month's Economic Outlook from the OECD revised down their prediction for UK GDP growth, and even the International Monetary Fund's health-check of the UK economy concluded that GDP growth was faltering.

George Osborne and the Tories have missed the targets that they have set for themselves and have proven beyond doubt that the Tories' claim to economic credibility now lies in tatters.

And what of the Osborne's Fiscal Charter, the political centrepiece of his economic strategy?

The Institute for Fiscal Studies, the ratings agency Moody's and others are sounding alarm bells that the Chancellor's predictions for the economy back in November may be too optimistic - tax revenues will be smaller than expected as a result of poor wage growth, and the turmoil in the FTSE 100 could mean smaller returns from capital gains tax. There is a black hole in the Budget, and the two central targets of the Fiscal Charter - that debt should be falling as a proportion of GDP from this year, and that the public finances should be in surplus by 2019-20 - are in jeopardy.

But I can ill-imagine that the Chancellor will be willing to sacrifice his Charter. To rip it up and start again. The Fiscal Charter is George Osborne's Bible of Austerity, and it is the guiding principle of Tory management of the UK economy.

The implications for this Budget are terrifying. He told us himself in Shanghai in late February when he said: "we may need to undertake further reductions in spending." The Chancellor's ideological obsession with austerity will continue.

Everyone will feel the cuts to come. These cuts will go through the flesh and straight to the bone. Further cuts to social security, the removal of tax relief of hardworking people's pensions, and raids on fuel duty are all measures that the Chancellor may deploy in order to rescue the fate of his Austerity Charter.

But there is an alternative budget that could be delivered on the afternoon of Wednesday 16 March.

The SNP advocates a more balanced approach which would return the public finances to a sustainable path whilst continuing to invest in public services. It would also provide greater opportunity to protect the most vulnerable in society.

An SNP Budget would increase spending on public services by 0.5% a year in real terms between 2016-17 and 2019-20. This would release over £150billion during this period for investment in public services - while ensuring that public sector debt and borrowing fall over the current Parliament.

This alternative Budget would stimulate GDP growth, support wage growth and tax receipts, and would be a major signal of confidence in our economy.

It is a bold idea whose time has come.

The OECD's Economic Outlook endorsed this very plan, arguing that a commitment to raising public investment collectively would boost demand while remaining on a fiscally sustainable path. And in the IMF's health-check of the UK economy last month, they urged the UK Government to boost investment spending should GDP falter.

George Osborne will be a lonely figure at the despatch box on Budget day. Both friends and facts are deserting him. In the harsh light of economic reality, it will be clear for all to see that the Chancellor and his Tory benches cling to an ideological commitment to cutting the state - whatever the cost.

From the SNP benches, the real opposition, there will be an alternative. An alternative that prioritises investment, exports, productivity, innovation. That seeks to support our key industries like manufacturing and oil and gas. And that seeks to do manage the economy in the interests of all, and not the few.

This article first appeared in The National