Is Anas Sarwar right to channel his inner Thatcher?

For an entire generation, Thatcher unwittingly set the parameters for the kind of country Scotland wanted to be. For most Scots who lived through the 1980s or, like me, who came of age during that decade, the answer was clear - not the kind you have in mind, Prime Minister.

For us, the most seismic political event of the 1990s was not the birth of New Labour or the creation of a Scottish Parliament, but the fact that, in the 1997 General Election, not a single Tory MP was returned north of the Border.

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Even after all this time, Scotland’s political lexicon is framed by references, both explicit and implicit, to the party of Thatcher and her enduring legacy.

Last autumn, Sir Keir Starmer sought to detonate a controlled explosion by praising the former prime minister’s “driving sense of purpose”, as a dog whistle to a particular section of the, mainly English, electorate that he is seeking to cultivate ahead of the impending general election.

While the gambit appeared to have the desired effect, north of the Border it set off a firestorm, with Humza Yousaf taking to Twitter to fulminate against the Labour leader’s ‘insult to Scotland’.

Margaret Thatcher's legacy still resonates in Scotland (Image: PA)

"What Thatcher did to mining and industrial communities was not entrepreneurialism, it was vandalism," he wrote, adding that communities across the country "still bear the scars of her disastrous policies".

Scottish Labour leader Anas Sarwar prefaced his keynote speech to the party’s annual conference in Glasgow last week with a standard reference to "the rotten Tories’"

The phrase resonates because of its historical, Pavlovian power to evoke images of dole queues, broken communities, striking miners on picket lines, and the collapsing cooling towers of the Ravenscraig steel plant.

Simultaneously, it also arouses memories of the winners under Thatcherism, most of whom lived outside of Scotland if you believe the caricature - the Krug-swilling barrow boys in London’s deregulated trading rooms, the loadsamoney tradesmen making hay on the back of the capital’s property boom, and newly solvent shareholders, cashing in on the privatisation of public utilities.

But then, Mr Sarwar did something unexpected and not in the traditional anti-Tory playbook: he suggested Scottish Labour would cut taxes for the better-off if it wins power at the next Scottish Parliament election in 2026.

It doesn’t take a political anorak to recognise that tax cuts are traditionally the preserve of the Conservative party, which presents itself as a bulwark of financial freedom, putting more money into the pockets of individuals, allowing them the choice of how they want to spend it.

Labour, in contrast, is the party of investment in public services to end child poverty, tackle homelessness and support the NHS. And for that, it needs taxpayers’ pounds.

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The Scottish Parliament is itself a creation of this divergence of priorities. A persistent refrain among many middle-class Scots throughout the Thatcher years was that they would happily pay a bit more on tax if it meant better public services, if only a mechanism existed to help them achieve it.

The decline of traditional heavy industries, such as coal mining, shipbuilding and steelmaking, upon which so much of the Scottish economy once relied, was seen by most enlightened voters as an inevitability.

What was avoidable however, was the wanton abandonment of the communities that relied on those industries to provide employment, and the insistence that the unemployed should be left to their own devices to rebuild their lives, because there was “no such thing as society”.

Pledging to cut the taxes of the well-of sounds like a strangely revanchist ploy from a man who fought the Scottish Labour leadership election campaign in 2017 on a promise to raise an extra £700million-a-year with a new 50p tax band for top earners.

His latest strategy is, doubtless, supported by polling and focus group evidence, but he is certainly moving onto new and unfamiliar territory. Some might even call his approach Thatcherite.

While, in the past, he has hinted at reducing the tax burden on those earning more than £29,000, this latest manoeuvre, apparently revealed by his spin doctor during a briefing to political journalists after his conference speech, goes significantly further.

His ambition - economic circumstances permitting - is to cut an additional tax band for people earning between £75,000 and £125,000, introduced by the SNP in its December budget, to “deliver on people’s aspirations and dreams”.

If the UK economy was performing better, as it was in the period following the 1997 general election for example, such a strategy might be understandable. But during a cost of living crisis, and when public services are being starved of cash, one wonders why he felt such an announcement to be necessary or timely.

As recently as December, Scotland's council leaders were warning that the budget would leave services at “breaking point”, with “cuts in every community”. Responding to the Scottish Government's spending plans, the Convention of Scottish Local Authorities said its offer of £144 million would not be enough to compensate for a proposed freezing of council tax.

Before now, Mr Sarwar took a decidedly cautious approach to taxation, restricting commitments to taxing non-domiciled residents - who live in the UK but don’t pay UK tax on income earned abroad - and on oil and gas giants who have reaped record profits from the instability caused by the Russian invasion of Ukraine.

He has also pledged to ban companies that don’t pay their fair share of tax from tendering for government procurement contracts.

Such measures, while symbolically important, are limited in how much additional revenue they will generate. It is estimated that taxing the earnings of energy companies - in 2023, Shell, BP and Equinor raked-in £42.7bilion in profits - would provide around £10.8 billion for the UK Exchequer over five years.

Scotland’s Barnett consequential would likely see it earning less than £200m a year which, in the context of the Scottish Government’s annual budget of £57.9bn, is hardly life changing.

Taxing non-doms would raise even less, around £134m, which Mr Sarwar has said would fund 160,000 NHS appointments, though he didn’t say if those would be doctors, nurses or auxiliaries.

By seeking to wear the clothes of Mrs Thatcher, Mr  Sarwar is taking a risk. The likelihood of it paying off depends on whether Scottish voters are minded to look ahead to the future, or back to the past.