IT'S a funny old world. There was the Scottish Tory leader and, we're told, the likely next leader of the UK Conservative Party, arguing for tax increases for the NHS, more immigration and even land value tax, in her speech in Glasgow last week. Meanwhile, social-democrat Nicola Sturgeon was defending the SNP Growth Commission report calling for rigid spending limits and deficit reduction. It's a curious reversal of roles.

Of course, everyone should beware Conservatives talking up the NHS while in opposition. The leopard doesn't change its spots, and Tories have always prioritised "balancing the books" over public spending when in government. Similarly, we should be sceptical about a spending party like the SNP promising to be more prudent than Gordon Brown back in the 1990s. Nicola Sturgeon's instincts are very much on the social side of the equation. Indeed, she keeps insisting that the Growth Commission doesn't really mean austerity, even when it bases its prospectus for independence on the very definition of it.

Nicola Sturgon: 'Growth Commission has prompted No voters to look at the arguments afresh'

But I wouldn't entirely dismiss either Ruth Davidson's speech, or the Growth Commission, as empty window dressing. The Tories in the UK have largely abandoned the rigid fiscal disciplines that George Osborne attempted to impose on Britain after the financial crash. That is why Ruth Davidson, who clearly sees herself as leadership material, is exploiting an ideological opportunity.

In 2010, Osborne made reducing Britain’s debt pile the absolute priority of David Cameron’s government. This was necessary, he said, because the country was spending more on debt repayments than education and defence and that, unless things changed, the UK wouldn't be able to afford services like the NHS. Of course, the Tories never called it “austerity” but that is what it was: an attempted to reduce debt by rigid capping of spending to below GDP growth. Osborne tried to cut the structural current spending deficit of five per cent to zero and reverse the rise in the then UK debt pile of 70 per cent of GDP.

However, government debt actually increased in the next few years as productively lapsed and tax revenues stagnated. This is the paradox of deficit reduction. The more you cut public spending in a downturn the more you have to keeping cutting it. The economy isn’t a zero sum, as John Maynard Keynes argued in the 1930s, and the most important role of government is to prevent activity in the economy from faltering through lack of demand. To keep revenues buoyant governments often have to use their resources to provide a fiscal stimulus: boost demand through government spending, as Barack Obama did in 2008. Indeed, the IMF, guardians of fiscal responsibility, criticised the UK government in 2013 for failing to grow the economy by investing in infrastructure.

Nicola Sturgon: 'Growth Commission has prompted No voters to look at the arguments afresh'

Of course, stimulus has to be within reasonable limits or the result will be hyper-inflation, increased interest rates and a Venezuelan debt crisis. But in the developed UK in 2010, with interest rates at rock bottom, and inflation negligible, it was pointless imposing rigid spending reductions. By 2016 it was effectively abandoned, but at a huge cost to growth.

Tories don’t talk about austerity anymore for another reason: voters may like the idea of balancing the books, and it always goes down well in speeches, but they don’t like the result, which is stagnation in wages. Britain has been through the longest pay pause since the Napoleonic wars. Boosting UK productivity, which has been wrecked by austerity and underinvestment, is now the prime objective of government. Forward-looking Tories like Tom Tugendhat, Ruth Davidson, and even Theresa May herself, have openly repudiated Osborne's obsession with cutting spending and reducing debt.

Since 2010 government debt has risen year on year, despite austerity, and now stands at 86 per cent of GDP. George Osborne said that this would be catastrophic, but it isn't. Part of the reason is that a third of this debt is owned by the UK Government itself through quantitative easing – so the government is repaying debt to itself. Economics is full of paradoxes like this, and simplistic ideas drawn from household budgeting – like only spending what you can afford – make little sense at the macro level.

The last redoubt of crude austerity economics has turned out to be the SNP’s Growth Commission document, chaired by the former SNP MP Andrew Wilson. There has been much dispute about this. Nicola Sturgeon took to Twitter last week to insist that the report “explicitly rejects austerity”. Well it may have said those words, but its plan for cutting the Scottish budget deficit is the very definition of austerity.

The Wilson Plan is to cut the Scottish deficit, currently 8.3 per cent (according to questionable GERS figures published by the UK government), to three per cent in five to 10 years by holding government spending to one per cent below GDP growth. He also proposes to hold debt to 50 per cent of GDP. The current growth rate of the Scottish economy is 0.7 per cent, and the Scottish government's Fiscal Commission forecast last week that it would remain below one per cent for the next five years. So, imposing this rigid cap on spending would not only shred public services, it would likely plunge the economy into deep recession – especially since the Scottish Government would not be able to devalue to boost exports because the Scottish pound, in the Wilson Plan, would be pegged to Sterling. After the Brexit referendum, the UK effectively devalued by 20 per cent.

Nicola Sturgon: 'Growth Commission has prompted No voters to look at the arguments afresh'

As economically literate nationalists like the former SNP MP George Kerevan and Robin McAlpine of Common Weal have said, this is comparable to George Osborne's austerity programme of 2010 which even the Tories abandoned. So why has it been resurrected by the SNP under a quintessential social democrat like Nicola Sturgeon? Surely, a Scottish Government would favour an Obama-style stimulus. Well, one theory is that she doesn’t believe a word of it and is engaged in the same enterprise as Labour in the 1990s, which is trying to make the SNP more respectable in elite circles and in the press.

The Former SNP Justice Minister Kenny McAskill argued last week that Sturgeon is bent on creating a “New SNP” just like New Labour, complete with a highly centralised, top-down leadership structure. The Growth Commission was aimed firmly at unionist columnists, who reacted positively to their "friend” Andrew Wilson. The Growth Commission has also gone down well with the Edinburgh financial community who’ve always thought of independence as a socialist project. Voters too like talk of fiscal responsibility, which is why Gordon Brown made a fetish of “prudence”.

But for a party of independence, it doesn't seem to make a great deal of sense. Few Scots are likely to vote for a project that involves 10 years of pointless austerity followed by another 15 years of catching up with the Netherlands. Of course, it may be that Nicola Sturgeon is not really thinking about independence right now, but about her declining approval ratings and the 2021 Scottish parliamentary elections. She wants to get a better press and get business on side, after having increased taxes on those earning over £33,000. Above all, she wants her Scottish government to be seen by middle-class Scottish voters as responsible.

Perhaps, as with Labour, this is just what happens to radical political leaders when they've been in office too long. They tire of being hammered by the press, corporate lobbyists and civil servants. If you can't beat them, join them.