Power For Scotland’s People – A labour movement view

So far the ‘Independence’ debate has been a sterile argument between unionists and nationalists.

Would independence impoverish Scotland and turn it into another Greece or Portugal on the periphery of Europe? Or would it make us a land of prosperity – a new Norway?

More importantly, for trade unionists and socialists, the debate so far misses the crucial dimensions of class politics and the redistribution of income and wealth. What constitutional settlement would best allow the people of Scotland to break the power of big business and neoliberal policies and promote social and economic justice?

And, as this pamphlet agues, this has to be done in large part at British level because that is where the capital which controls Scotland’s economy is concentrated.

The STUC has played a leading role in the campaign for Home Rule and a Scottish Parliament since the 1930s. But it was always for a parliament with the powers to tackle the deep rooted challenges facing working people – poverty, poor housing, inadequate public services, unemployment and industrial closures. In other words, working people in Scotland needed a parliament to represent them which could work in unity with working people elsewhere in Britain to defend and advance their interests. Such a parliament is now more needed than ever.

Under this scheme, Scotland’s parliament could be part of a federal structure in which England, or the regions within it, could have some measure of self government while a federal government in London would have responsibility for the currency, corporate tax rates and a portion of income tax. A crucial component of this would be to maintain the principle of redistribution of income from the wealthy south-east and City of London (currently the Barnet formula) to poorer areas like Scotland. The Scottish Parliament, for its part, should have the power to take over failing companies, to hold key industries and utilities in public ownership and to invest in selected strategic industries such as renewable energy and life sciences through the public sector.

By contrast, ‘independence’ or ‘full fiscal autonomy’ would break the unity of workers and trade unionists across Britain. SNP policy is to lower taxes on corporate profits to attract business away from other parts of Britain. ‘Independence in Europe’ would deprive Scottish people of the very powers they would need to intervene in industry or borrow for strategic investment.

Both would be in breach of EU competition law or the new EU ‘stability pact’. Moreover, ‘independence’ and ‘full fiscal autonomy’ would both dispense with the crucial principle of redistribution of income at UK level. An ‘independent’ or ‘devo-max’ Scotland, without a high level of unity and working class mobilisation, would become a low tax, low wage economy which would struggle to maintain public spending and jobs at current levels.

Only a Scottish Parliament with increased powers of intervention in the economy, which retained the principle of redistribution at British level, would promote the unity of trade unionists and working people throughout Britain.

This would create the optimum conditions for democratic advance and socialism in Scotland and across Britain.

 

Options for Scotland – How Best to Redistribute Wealth?

The referendum has dominated the media’s coverage of Scotland, sometimes to the detriment of more pressing issues, such as the impact of cuts and the attack on pensions throughout the UK. Not surprisingly Alex Salmond and the SNP have tried to restrict the discussion to Independence v the Union. Even the “third option” Devo-Max has been shaped by the SNP. Introduced more recently is Devo-Plus and we now know the proposals that will form the Scotland Bill. None of these options prioritise the redistribution of wealth, greater equality or democratic control of the economy.

The Scotland Bill

The recent Scotland Bill for example is extremely limited. More borrowing powers are proposed. These could allow the Scottish Parliament to invest in capital projects, therefore stimulating the economy, but only to a limited extent. Any additional borrowing would have to be paid back and if the investments do not generate sufficient tax receipts then this could impact significantly on future Scottish spending. The Scotland Bill, it could be argued, was developed as a response to growing SNP influence rather than a vehicle for tackling the structural inequality of Scotland today. Its strength is that it retains the principle of UK wide redistribution embodied in the Barnett formula.

Devo-Plus

Reform Scotland, a market orientated Think Tank, argues Devo- Plus would see Scotland take responsibility for all taxation except VAT and National Insurance, and for its own spending. The motivation is to constrain the Scottish government and remove the redistributive element of the Barnett formula which takes cash from wealthier areas of the UK to those less so. Reform Scotland’s image of Scotland under Devo-Plus is a low tax and deregulated economy with reduced public spending.

Devo-Max

Like Devo Plus this requires Scotland to have full fiscal autonomy preventing any UK wide redistribution. It ignores the fact that much of Scotland’s wealth, as we will show later, is not actually controlled from here and will escape any attempt to redistribute it from company profits to individual needs.

Independence

The SNP’s model is for independence within the EU. The EU from its inception was designed to legally underpin, sustain, protect and develop capitalism in Europe. Huge swathes of legislation in Scotland and the UK are influenced by, or are a direct consequence of, European Directives. Scotland, if independent of the UK, would not be independent of the EU.

Neither would Scotland be free from the neo-liberal globalised world of which the EU is an integral part. Scotland would still be at the mercy of transnational corporations, thus raising the fundamental point that political selfdetermination without economic self-determination is ultimately futile. Indeed an independent Scotland would see its ability to fight back against corporate power fatally weakened.

The Realities of Power Today – Big Business Power in Scotland

The question is: would independence on SNP terms in any way free Scotland’s people to meet the crucial challenges of economic and social development in a progressive way?

The SNP Left believe it would, and they do so by combining two arguments. One: people in Scotland are more social democratic and egalitarian than people in England. Two: in the era of globalisation small nations provide the best vehicles for economic development. An independent Scotland would, therefore, be both politically more progressive and economically more dynamic.

Neither argument is entirely wrong, until you put them in the context of the SNP’s model of independence. Firstly they take little account of what made people in Scotland progressive and egalitarian and how this can be maintained. Secondly they don’t acknowledge that, as shown above, there is little opportunity for economic independence within the limits set by the SNP. More fundamentally, especially given that they claim to be on the Left, their arguments ignore issues of class and class power.

Every nation has its history. Unlike Ireland, Scotland was not a colony. Its capitalist landlords, merchant princes and employers continued to use the separate Scottish systems of law, religion and education to exploit their own people. The object of the Union with England was to secure a share of the profits of colonial empire. As a class, they continued to dominate Scotland’s economy and its politics and still do today, though more indirectly, through the hedge funds and financial institutions of the City of London and its satellite centre in Edinburgh. An independent Scotland may not be a new Greece, but neither can it be a new Norway.

Scotland’s workers developed trade unions in their own defence – generally in combination with workers in England. Yet the periods of general working class mobilisation, have been relatively short-lived, and their transforming impact on political attitudes only occurred when struggles against Scottish employers merged with wider British struggles – and brought the trade union movement into collision with the class power of the employers at British level. In the 1970s it was the joint victories of the miners, London dockers and UCS shipbuilders that together, and only together, defeated the Conservative assault.

Today’s egalitarian values, as held up by the Left nationalists, are a reflection of these struggles. But they are not permanent or guaranteed. ‘Independence in Europe’ would mask the exercise of economic power at British level. Worse, it would trap people’s political horizons within the neo-liberal terms set by Edinburgh fund managers: growth by cutting taxes on external big business. It is the direct opposite of the 1970s battle for economic democracy which launched the demand for a Scottish parliament. If working people in Scotland are to be mobilised for a future based on social control over capital, rather than being controlled by capital, then the demand for economic democracy must be relaunched.