Bill Jamieson: An SNP-Labour coalition at Westminster is not impossible

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Ahead of us, an impasse: Brexit negotiations as good as paralysed; a Prime Minster trapped in a hole of her own making; a deeply divided Conservative Party; a Labour opposition pledged to oppose Chequers ; Brexiteers equally opposed; and growing calls for a second referendum – possibly with the option to abandon Brexit and stay in the EU: if you thought politics was the art of the possible, today it is about making the impossible a reality.

The impasse we face looks grim. Tomorrow looks little better. We are trapped in a politics of exasperation. But the day after tomorrow? How about this “impossibility”? Few would rule out a general election over the next year. With Tories and Labour neck and neck, another minority government is no remote outcome. And in that event, how about the “impossibility” of a Labour-SNP coalition?

Fanciful, you may think. The two parties are not just opposed – they can’t stand each other. They would no more sit together than buddy up to Jacob Rees-Mogg at a monarchist rally. And has not Scotland’s Labour leader Richard Leonard this week ruled out support for a second independence referendum?

But note also this: Scotland should have major land reform with new rules to tax foreign and absentee landlords; an extra £3.7 billion for public services through a ‘windfall’ tax on the richest 10 per cent in Scotland to combat income and wealth inequality; ring-fencing of hundreds of millions of pounds of state aid funding for foreign-owned businesses and redirect it towards Scottish companies to re-train staff and save manufacturing jobs. Some £222 million has been handed out since 2007 in Regional Selective Assistance (RAS) to foreign-owned companies, compared to £140.7 million that has gone to Scottish-owned firms. The total amount of RAS has also fallen by 80 per cent since 2007.

Such a programme would bring an SNP conference to its feet with cheers and stamping of feet. But these were not pronouncements from the SNP. They came from the same Richard Leonard at the Labour conference this week – the one in which the Shadow chancellor also pledged that rail, energy and mail services would join Scottish Water in public ownership, that the bosses of these companies should be made to seek re-election and their bumper pay packets substantially cut. There would be tough penalties for tax evasion and a new employees’ share scheme giving workers dividends of up to £500.

What SNP heart would not warm to such a programme? It is, after all, an unarguably Left-leaning party, a passionate advocate of bigger government, higher taxes on the wealthy, achingly liberal in social policy, and avowedly anti Brexit. As for economic policy, former SNP MP George Kerevan, the Antonio Gramsci of the party’s economic gurus, would love it. And the Green Party MSP Andy Wightman would be doing cartwheels: would this not bring him closer than he has ever been to achieving his land reform dreams?

But what of Leonard’s opposition to a second indyref? Would not this stand in the way of some form of coalition pact that would put Jeremy Corbyn in Downing Street?

Yet how intoxicating is the nectar of political power when close to the olfactory senses: the nearer the deal-brokers approach, the more powerful it becomes. Is it really beyond the art of the possible that some contrivance of words could be constructed with which both sides could live - “plausible ambiguity” in Brexit parlance?

Here, indeed, “the art of the possible” comes into its own. And after all, if Labour can be so cavalier in dropping its earnest protestations that it would “respect” (sic) the outcome of the 2016 EU referendum, who could rule out a similar somersault on its views on a second indyref? Is our paralysed politics today not truly entering the realms of the surrealist writer Peter Pomerantsev where “Nothing Is True and Everything Is Possible”?

It is in this spirit that we should view the declaration this week of shadow chancellor John McDonnell: “The greater the mess we inherit, the more radical we have to be; the greater the need for change, the greater the opportunity we have to create that change and we will.”

In time-honoured political tradition, words can be made to mean whatever the speaker wants them to mean – and which may be quite different from what the audience hears them to mean.

Take Mr McDonnell’s declaration about share ownership by employees. He invoked the example of the John Lewis Partnership. But that is not what is on offer. The shares would not be given to the employees but would be held by a state-mandated committee which would distribute up to £500 of any share dividend to each employee. The committee would hold the rest and pass it back to the Treasury – Corporation Tax by another name. Who would exercise the voting rights? Employees would not enjoy a sense of direct equity participation in the affairs of the company, and no direct holding over which they had control to build on or sell as they wished.

As such, it is a poor substitute for the scheme introduced by former Labour chancellor Gordon Brown – the ‘All Employee Share Ownership Plan’ or Share Incentive Plan. This provided a stronger basis for individual employee participation and retention of capital value, and is the most tax efficient UK investment plan in existence (more so than personal pensions). Perhaps Tory chancellor Philip Hammond, to spike Labour’s guns, could unveil an updated and extended model in his November budget.

But the Conservatives have already surrendered ground to the Left - on tax, health spending and social housing policy. It is in ideological disarray. A Labour-SNP coalition is thus by no means impossible – indeed it increasingly looks a plausible runner.

And in the absence of an inspiring electoral alternative, what could possibly stymie it? Perhaps this: the prospect of a raucous whooshing sound as capital and people start heading for the exits. Hard Labour, asset seizure, higher tax and a grasping state: not at all “impossible” once the populist wagons roll.