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.

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