The new poll tax? The bedroom tax, welfare reform and independence

Dr. Nicola McEwen, Academy of Government

Dr Nicola McEwen, ESRC Senior Scotland Fellow, reflects on the welfare turn in the independence debate. She raises doubts about the prospects that the bedroom tax can play as important a role as the poll tax in the campaign for greater Scottish self government.

The issue of welfare reform has taken centre stage in the campaign for Scottish independence. YES campaigners clearly regard it is a symbol of all that is wrong with the Union, and an opportunity to mobilise support for independence.

The UK government’s welfare reforms span a wide range of social security measures which streamline the tax and benefit system, restrict benefit entitlement and cut the real terms value of many benefits. But the so-called ‘bedroom tax’ has assumed a symbolic significance in the debate. From 1 April, it imposes a financial penalty for under-occupancy on housing benefit claimants living in the social rented sector, by withdrawing 14% of housing benefit for one extra bedroom and 25% for two or more. In her speech to the SNP’s spring conference, the Deputy First Minister, Nicola Sturgeon, described it as ‘one of the worst policies introduced in Scotland since the poll tax.’

The welfare turn in the independence debate today is certainly reminiscent of the symbolic role played by the poll tax in the campaign for a Scottish Parliament in the late 1980s and 1990s. Introduced to Scotland by Mrs Thatcher’s government in 1989 – a year earlier than in England and Wales – the community charge, as it was officially named, was a replacement for domestic property rates. The tax rate was set by local authorities and was intended to make them directly accountable to taxpayers for the services and infrastructures they provided. But as a flat rate tax levied on individuals, it had profoundly regressive implications, sparked mass non-payment campaigns, and was replaced by the council tax in 1993. Yet, even years after it was abolished, the poll tax still featured in the 1997 devolution referendum, and was used effectively by Scotland Forward, the official YES YES campaign, as a symbol to reinforce the need for Scottish self government.

Can the bedroom tax – and welfare reform more generally – be the game-changer that might shift opinion towards a YES vote in the 2014 referendum? YES campaigners clearly think so, and miss few opportunities to highlight the inequities of UK welfare reform in contrast to the promise of a fairer, more socially just, Scotland after independence.

They may be right. Welfare state institutions and services have been utilised as tools in nationalist politics before, with some success – a phenomenon I described in my research as welfare state nationalism. Welfare retrenchment weakens the ties that bind citizens to the state, and can reduce the feelings of risk associated with constitutional change and independence.

In the Québec referendum in 1995, which saw the YES side defeated by the narrowest of margins, pro-independence campaigners contrasted the welfare retrenchment and deficit-reduction policies of the then Canadian federal government with their projet de société – a vision of a more socially progressive, independent Quebec. In Scotland, too, the defence of a social democratic welfare state – and the feeling that it was under attack during the years of Conservative rule – was not just a key feature of the campaign for a Scottish Parliament. Surveys taken after the devolution referendum revealed that the YES majority was in part a result of high expectations that the parliament would deliver better public services and a fairer society.

There is no doubt that the welfare reforms of the current government are creating deep unease within large sections of civil society, especially those bodies who work most closely with the communities and citizens most affected by the changes. Public opposition, too, was evident in the weekend protest marches. But, whether this unease can shift opinion towards independence is more questionable, for several reasons.

First, the experience of devolution may have diminished confidence that constitutional change alone can transform society. At the time of the referendum in 1997, expectations of what devolution could deliver were very high, but successive Scottish Social Attitudes Surveys since then reveal a less rosy picture. While few believe that things are worse, most Scots appear to believe that the parliament has made little difference to the quality of health, education and the economy, for example.

Second, in the devolution campaign, there was a broad consensus among those on the social democratic left that social democracy and self-government went hand in hand. This was reinforced by the feeling of injustice created by the early introduction of the poll tax in Scotland. There is no distinctively Scottish dimension to the welfare reforms of today. Nor is there a social democratic consensus for constitutional change; those defending a social democratic welfare state today span the YES and NO campaigns. The UK General Election will be less than eight months after the referendum, and we might expect the Labour Party to have stepped up its critique of UK welfare reforms. Their main focus will be a change of government at Westminster, not a change in the constitutional status of Scotland.

Third, Scottish policy choices in an independent Scotland might be underpinned by a distinctive set of values and priorities, but they would still be constrained  by many of the pressures that have contributed to rising social security costs across many countries. Within the EU, social protection accounts for the highest proportion of government expenditure, followed by health and general public services. These costs are fuelled by an ageing population, economic pressures, and higher expectations and costs of providing public services, often coupled with a reluctance to pay higher taxes that might contribute towards meeting these pressures. It is reasonable to assume that any party elected to govern an independent Scotland would want to contain the extent to which social welfare services consume available budgets.

Of course, change can be achieved in ways that don’t necessarily involve more spending, and there are interesting debates within civil society about the opportunities self government would create, for example, in giving greater opportunities for preventative spending as recommended by the Christie Commission.

But change will not be easy, and nor would an independent Scotland begin with a ‘clean sheet of paper’, as suggested by Blair Jenkins, Yes Scotland Chief Executive, in a recent article in Scotland on Sunday. Institutions and practices have a way of becoming embedded, often generating powerful interests in favour of continuity over change. The rest of the UK – and England in particular – will remain a reference point for Scotland with or without independence. A desire for welfare services and benefits to be at least as good as those south of the border could also militate against change.

Finally, the SNP government’s vision of independence sees it developing alongside a continued common labour market and common travel area, allowing for the free movement of people and services. These commonalities would have implications for a range of policies, including social security provision, pensions, employment and labour market regulation. An independent Scotland might not have the bedroom tax, but there would be other continuities in the welfare system. There is a likelihood, too, that the independence proposals will include some shared arrangements with the UK government over the delivery – if not the design – of some benefits.

The greater the interdependencies and continuities, the less scope there may be for doing things differently, even with political independence. The degree to which such continuities are envisaged in the arena of social security and welfare awaits further details, but this could pose a further constraint on the likelihood that UK welfare reform may be the game-changer in the referendum campaign that advocates of independence hope it will be.

Dr Nicola McEwen is Director of Public Policy at the Academy of Government, and ESRC Senior Scotland Fellow. She is undertaking a research fellowship, entitled ‘Between autonomy and interdependence: Scottish independence and intergovernmental co-ordination’, as part of the ESRC Future of the UK and Scotland programme.