Scotland’s Future – Red Paper on White Paper

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Red Paper on White Paper - coverPamphlet by Red Paper Collective
in response to Scottish Government’s white paper on published 26 November 2013

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Red Paper on the White Paper
The Red Paper Collective wants a Scotland that is more equal and democratic.  We want a Scotland in which there is an economic democracy that gives people a say over their lives and employment and in which the Scottish parliament has powers to own and develop our utilities and strategic industries. We want relations with the other nations of Britain that are based on equity and fairness and a recognition of the duty to share in face of social need – and where ordinary people have the collective strength to address the concentrated power of wealth and privilege. The Red Paper Collective therefore calls for a radical federalism in which national parliaments have the powers long called for by the Scottish Trade Union Congress and the Scottish Left.

This does not exist at present.  But neither can such powers be found in the proposals set out by the Scottish Government in its Independence White Paper.  The White Paper surrenders the key powers over the economy to external institutions, the Bank of England and the European Commission, institutions which will inevitably enforce the same neo-liberal policies, on terms set by big business and finance, that are currently destroying jobs and welfare across Britain and the EU.

Scottish GDP: are we really as wealthy as the Yes campaign claim?

by Scott Nicholson

The Scottish National Party (SNP) and Yes campaign cannot stop telling us that Scotland is one of the world’s wealthiest nations. Every year the Organisation for Economic Co-Operation and Development compile data regarding international gross domestic product (GDP) per capita. Based on this the Scottish Government in March 2014 published a ranking of the world’s wealthiest countries, placing Scotland as the 14th richest nation, way ahead of the rest of the United Kingdom in 18th place.[1]

The Yes campaign also relishes the fact that the countries placed number one and two in these types of ranking are also geographically small or have small populations. Norway has a population of around 5 million while Luxembourg has a population closer to half a million.

All this self congratulating is fine but do we in Scotland actually have a better standard of living than people in England, Wales and Northern Ireland? In the run up to this referendum we have all listened to a lot of quotes from Nobel Prize winning economist Joseph Stiglitz but this one I think is based on common sense: “One of the reasons that most people may perceive themselves as being worse-off even though average GDP is increasing is because they are indeed worse-off”.

GDP is an excellent measure of the size of our economy yet does not tell us about our standard of living and includes wealth that does not stay within Scotland. Gross national income (GNI) is a better measure for this purpose, as where GDP shows the total output of the economy, GNI differentiates between home and internationally owned enterprises.

This is important as the Scottish Government’s corporate statistics show that in the last decade, we have experienced a startling change in ownership of the Scottish economy. The decade has seen the share of large enterprises in overseas ownership rise by around 40 per cent.[2,3]

The SNP appeal for political power but have already lost economic power. In Business Insider’s Top 500 companies in Scotland in January 2014, we see a top 20 dominated by wholly-owned subsidiaries of foreign multinationals and London Stock Exchange quoted corporations.[4] Even the “Scottish-owned” companies are actually joint stock companies, with little stock owned or controlled within Scotland.[4]

My point is that Scottish GDP reflects an arbitrary valuation. Wages, salaries and purchases of goods and services used by these companies are great for Scotland. However, how much of the global sales value of these products and services end up in our pockets and how much they benefit the Scottish economy are vital questions to ask?

I personally think these are questions that Alex Salmond should be asking. This is why GNI is important as it focuses on earnings retained by the residents of Scotland and allows us to make informed decisions regarding, the level of future contributions to an independent Scotland that multinational companies should make through Corporation Tax. I for one believe that if the SNP lower Corporation Tax to 3 per cent below the rest of the United Kingdom, this will only exaggerate this issue.

Perhaps more importantly than that, we all remember the Starbucks and Amazon tax avoidance scandals, so I feel that we really need to think carefully about whether this overseas ownership would actually help an independent Scotland or even Scotland as part of the United Kingdom. It is important to remember that multinational companies are answerable primarily to shareholders, mostly outside Scotland and act to maximise profits, not benefit the people of Scotland. In addition to this, I really dislike the way business investments in Scotland are presented by multinationals as gifts or favours to the people of Scotland and not merely the day-to-day of doing business.

I do not think Scotland is as wealthy as some claim and I would ask people to critically analyse these claims when presented. I also think it would be useful to have a set of Scottish GNI figures to be produced by a neutral, independent body. However, the SNP’s level of debate is notorious and we all know that if we are wealthy, the SNP will claim it as a reason why we need independence and if we are not wealthy, we know that the SNP will claim it as a reason why we need independence.

 

References

http://www.scotland.gov.uk/Resource/0044/00446013.pdf

http://www.scotland.gov.uk/Publications/2005/11/2485808/58107

http://www.scotland.gov.uk/Topics/Statistics/Browse/Business/Corporate/table3sic07

http://www.dailyrecord.co.uk/business/business-news/insider-top-500-3110644