Promoting People’s Power – Economic Development and Scotland as a Nation

Each of the proposals listed – the Scotland Bill, Devo Plus, Devo Max, Independence – has to be judged against the back drop of ‘who owns Scotland?’

Over the last four decades there has been a continuing drift of economic power out of Scotland with 82.5% of large corporations externally owned.

Privatisation, as well as taking much of the economy out of democratic control, has also stripped away any semblance of meaningful regional control. To take just one example the South of Scotland Electricity Board turned first into Scottish Power and Scottish Nuclear (later British Energy) before being taken over by the Spanish and French transnational corporations Iberdrola and the EDF Group respectively.

With a few exceptions, all the biggest employers in Scotland are either UK-owned and controlled, quoted on the London Stock Exchange or highly dependent on the whole UK market of 60 million, compared to the Scottish market of just 5 million for the sale of their goods and services. Indeed the Scottish Government’s most recent data shows that Scotland exports almost twice as much to the rest of the UK (£34 billion) as it does to the whole of the rest of the world put together (£19 billion).

Nowhere is this state of economic and industrial integration more apparent than in the financial services sector. The 2008 collapse of Scotland’s biggest two banks RBS and HBoS and the takeover of their loan books by the UK Government and Lloyds has brought into sharp relief the branch plant nature of these leviathans of Scottish life.

It is clear that even the big business figures operating within the SNP’s own orbit like Sir George Mathewson, Sir Brian Souter, Sir Tom Farmer, Sir Angus Grossart, Peter de Vink, and Martin Gilbert are all ultimately dependent for their business success on external institutions, not least the investment banking networks which operate from the City of London. This is where much power lies now, and where it will remain irrespective of any future referendum vote for a separate Scottish state.

It is misleading to claim that “independence” as projected by the SNP and others in the pro-independence camp would amount to a break up of the British State and allow Scotland to follow a different economic path. The fact is that Scotland is in a highly advanced state of economic and monetary union with the rest of the UK.

Independence on these terms would simply mean abandoning any democratic avenue by which working people in Scotland, jointly with those in England and Wales, could seek to impose socially-accountable control. Corporate power is organised at British level. It would remain so. SNP independence would thereby place Scotland’s economic and monetary policy, the great bulk of its production and its biggest market beyond its democratic influence.


A Left Alternative

The aims of redistribution at a UK level and having devolved governments are not incompatible, but there are tensions in seeking to increase the economic powers of the Scottish Parliament on the one hand and have a UK parliament that can re-distribute wealth across all the nations and regions. Our proposals therefore seek to balance these two legitimate sources of democratic pressure by enhancing economic and political democracy across the UK and Scotland.

This would be built on:

  • support for full national parliaments and, for England, devolved institutions as democratically determined by people in England together with an overall federal parliament that would have charge of the monetary system, macro-economic policy, foreign affairs and defence
  • the Barnett formula, or some form of needs-based redistribution
  • the principle of raising income tax based on an adjustment to the block grant in order to allow the Scottish Parliament more flexibility to create a fair tax system both nationally and locally that improves public services and the pay and conditions of public servants
  • the capacity to borrow for capital and revenue purposes well beyond the limits set out in the Scotland Bill to allow the Scottish Parliament to end its dependence on Public Private Partnership/Private Finance Initiative (PPP/PFI) and Non-Profit Distributing (NPD) projects
  • the demand of the ‘Claim of Right’, that the Scottish Parliament should have powers to take land, property and enterprises into public control and ownership without qualification
  • the power of the Scottish parliament to form enterprises that are publicly owned with a view to rebuilding Scotland’s industrial base on green technology, renewable, and high value manufacturing thereby addressing unemployment black spots and creating a prosperous future for the people, especially the young people, of Scotland.

These measures would require a challenge to EU law and changes in UK Company law. However, with political will and a united Labour Movement this kind of devolved settlement is achievable and is what the left should be fighting for.

Trident & Independence

For some peace activists the prospect of a nuclear-free Scotland would be reason enough to vote for independence. But following a vote for independence a Salmond-led government would be involved in complex and difficult negotiations with the UK government over how to divide up the UK national debt, oil and gas revenues and other joint assets and liabilities.

It is unlikely that Scotland’s income will match its public spending commitments. Finding a new site for Trident will be nigh on impossible for the UK government. Even if a site were found, new bases would be prohibitively expensive and would take at least 10 years to build. Under these circumstances MoD spokesmen have said that ministers would be likely to offer the Scottish government ‘whatever it takes’ to continue to base Trident at Faslane and Coulport for the next few years. The Trident bases, instead of being a drain on the Scottish economy, would become a crucial asset which could be milked for cash to support Scotland’s struggling economy at a difficult time for the new government.

Scotland would also have to negotiate its own membership of the EU which is committed by treaty to military interoperability with NATO. The pressures from the US and UK governments to delay the removal of Trident would be immense. More to the point, ‘waiting for independence’ diverts the movement from the immediate campaign to change policy now in face of a weak and divided Tory/Lib Dem coalition. Thus, independence is no magic bullet for a nuclear-free Scotland and could be a dangerous diversion.