The basic premise of Scottish nationalism – that the UK cannot be turned into a fairer country – is wrong, writes Scottish Labour leader Richard Leonard.
Let me nail my colours to the mast. It is my belief that we live in a world where there are too many national boundaries, not too few. And that we should be bringing borders down, not putting them up.
And whilst few people would dispute that the creation of a separate Scottish state is possible, the more relevant question is, is the creation of a separate Scottish state preferable? Would we be better off or worse off – and not just materially at that?
The SNP’s plan for an independent currency following the creation of a separate Scottish state is the recommendation of their Growth Commission. We have seen the impact of the Brexit chaos on the pound. It has even led foreign exchange analysts to describe the volatility of the British pound as resembling an emerging currency such as Mexico or Colombia. Holidaymakers will have experienced first-hand these consequences, when they received fewer euros and dollars in exchange for pounds. But the impact of a new Scottish currency would be on another scale.
Macroeconomic professor Ronald MacDonald noted last month that the least-worst outcome for the new currency would be a more flexible floating exchange rate to absorb economic shocks. But one consequence of this could be a significant loss in the value of the new Scottish pound by up to 40 per cent, which would see the price of imported goods rise rapidly and house prices plummet.
So the SNP’s prospectus for an independent state is misnamed as it is in reality a cuts commission. In my view, it presents a vision of a future Scotland which we cannot afford and which we do not want.
It proposes another wasted decade with people living, surviving, struggling under the yoke of a shock fiscal deficit reduction plan. So let me be clear, the SNP’s “clear-sighted analysis of the prospectus for independence” – in their own words – is built on the economics of austerity at the very time when the intellectual case for this is bankrupt. And at the very time when people can see that austerity is not an economic necessity but a political choice.
The SNP’s proposal is for a hard dose of public spending contraction. Their own Commission proposed a time horizon of a decade. In April, this year the SNP conference demanded a separate currency “as soon as practicable” based on a five-year time horizon.
And just two weeks ago, the SNP’s deputy leader said that the drastic deficit-reduction plan should be enforced not over five years but in “less than three years”. This is turbo-charged austerity.
And we know that austerity is never evenly distributed. In fact, during this last decade of austerity, not only have the poor got poorer but the rich have got richer. So that in Scotland today, the richest one per cent own more personal wealth than the whole of the poorest 50 per cent put together.
Austerity will not tackle social and economic inequality. It will make it worse.
The SNP’s case is also founded on a prospectus for independence built not on sovereignty regained but more accurately on sovereignty lost. Sovereignty lost over monetary policy and so interest rate policy, mortgage rate policy, exchange rate policy, inflation policy and money-supply policy all decided by someone else, somewhere else. And with an un-costed promise to peg Scottish corporation tax to remain at UK corporation tax levels there is a ceding of sovereignty on the taxation of company profits too.
So these policies for Scotland and the Scottish economy would be set in London, by the Bank of England, and by the Chancellor of the Exchequer of what would have become a foreign government at the very point that Scottish democratic representation was withdrawn.
That is not more independence, it is less.
And the SNP’s plan for independence is based on a neo-liberal economic model which relies heavily on foreign direct investment into Scotland on large multinational corporations and labour market “flexicurity”. So in-work poverty and inequality would remain a feature of Nicola Sturgeon’s independent Scotland. That’s why we should not be surprised to have learned that the SNP’s Commission consulted 20 business organisations but not one trade union.
I recognise that people want change. And that’s not just the view from Glasgow or from Edinburgh, or Inverness. It’s the view from Manchester and Leeds. And it’s the view from Birmingham too. But the whole premise of Scottish nationalism – that the UK cannot be changed – I reject. Another world is possible and another Britain is possible as well. So it is not an argument for the status quo that I make. It is an argument for change. It is an argument to remain, but it is also an argument to reform.
It is not just the political system which is too centralised, it is the economic system too. And that’s why – whether Brexit happens or not, and the Scottish Labour Party takes the view that we should remain in the UK and the European Union – we need reform anyway.
There is no doubt that decisions on the currency of a separate Scottish state are not remote or abstract, they are immediate and real to the current debate. They have economic, social and democratic consequences which are far-reaching. It is about whether our children get Assisted Support Needs when they need it. It’s about whether our public libraries stay open or close, whether we can build the homes that our people need. And whether we can invest in a Green Industrial Revolution to tackle climate change.
It’s about whether we have a National Health Service free and available to all at the point of need and whether we can invest in mental health services. It is about whether we can tackle child poverty or make it worse and whether we can give our older people dignity in retirement.
These all go to the heart of why we should reject the SNP’s central idea. It is why we need to reform and remain.