SNP’s commission will weaken support for independence – only socialist policies can end austerity

Philip Stott, Socialist Party Scotland National Secretary

The Scottish National Party’s (SNP) new economic case for an independent Scotland deepens the craven support for the capitalist market under the Nicola Sturgeon leadership. As we commented on the day of its release: “The SNP’s “blueprint” for an independent Scotland, out today, is titled ‘A new case for optimism’. In truth, it’s nothing more than a ‘tired old case for capitalism’, which also marks a shift rightwards compared even to the 2014 independence blueprint. As such it offers nothing for the working class and young people facing austerity, falling incomes and deteriorating public services.”

What is clear is that the report can only undermine support for independence. It will fail utterly to answer the genuine fears of working class people, many of whom are increasingly facing the impact of Tory austerity delivered to their door by SNP politicians.

The addiction of the SNP leaders to pro-capitalist economic “solutions” underlines the importance of building a socialist case for independence. One that is based on a reversal of all cuts, public ownership of the economy and massive income redistribution in favour of the working class majority.

The critical reaction to the Sustainable Growth Commission (SGC) – set up and funded by the SNP and chaired by ex-MSP Andrew Wilson – has been severe. The searing criticisms have forced Nicola Sturgeon into side-step, saying: “The report is a set of recommendations. The SNP has to consider them and deliberate and come to a view.” But significant sections of the independence movement are openly hostile to it’s proposals. And no wonder. The 345-page report is a study in the acceptance of neoliberal economic orthodoxy.

Backlash

Richard Leonard, Scottish Labour leader, has rightly described it as a “cuts commission”. However, Leonard is wrong to say; “Scotland does not need, and the people of Scotland do not want, this tired argument again.” He’s on record as opposing an indyref 2 on principle. He could, as Socialist Party Scotland does, fight for an independent socialist Scotland that would put an end to all austerity by implementing a widespread programme of public ownership and socialist planning of the economy. This could be part of a united struggle of the working class to end capitalism across Britain and internationally.

Tax blogger and Keynesian academic Richard Murphy, who has written for the pro-independence Common Weal think tank, said: “The Scottish Growth Commission has proved to be a fantastic policy agent for the financial elite. But for those who hoped for a bright independent future it offers nothing but despair. The Commission has proved itself the slave of pre-crash economics and a proponent of everything that is oppressive about neoliberalism.”

Former SNP MP George Kerevan commented that the SNP are “in danger of robbing the next independence referendum of being a rallying cry of hope for working-class voters”.

Robin McAlpine, the director of Common Weal, condemned the commission as, “the narrative world of Gordon Brown, Tony Blair and George Osborne. This is sheer McMacron – and if you’re going to go around proposing the French President’s approach, you kind of need to look at his appallingly low approval ratings.”

Herald columnist Iain Macwhirter, who has consistently backed Sturgeon and her pro-EU campaign, described the report’s political significance thus: “Actually, it’s some time since the SNP declared itself to be a socialist party – what we may be seeing is the end of it as a Keynesian, social democratic party. It certainly looks like a settling of accounts with the Left.”

Radical Independence Campaign (RIC) and RISE member Jonathon Shafi said: “In 2014 the independence movement was galvanised around opposition to crushing Westminster austerity. That too was the theme of the successful SNP general election campaign. The Growth Commission, despite claims to the opposite, would open the door to various forms of austerity politics.”

Colin Fox, the leader of the hugely diminished Scottish Socialist Party (SSP), has said he and his party will not be part of any Yes Scotland campaign in a second referendum that had the SGC proposals at its core. Fox and his party mistakingly participated as board members of the official Yes campaign in 2014, and effectively rubber-stamped the SNP’s pro-business “white paper” for independence. (see our article here)

Despite their criticisms of the SGC, neither the Common Weal – which is based on a Nordic, Keynesian model for independence – nor even socialist groups like the SSP and RISE put forward a clear socialist alternative. SSP and RISE leaders have all been guilty in the past of tail-ending the SNP and advocating a stages approach of first capitalist independence and then socialism. 

However, its clear that the actions of the SNP in implementing austerity and attacks on workers, which are rooted in their support for capitalism, are increasingly a barrier to winning a majority to independence. Only a programme for fundamental change that mobilises the working class and young people for a complete break with capitalism and an independent socialist Scotland can provide a way forward.

The stance taken by the SNP leadership since Brexit has been increasingly to advocate the interests of big business. It seems clear that the SGC report is another attempt to reach out to the capitalist establishment, alongside the party’s support for the EU single market and customs union. The effect will be to weaken the appeal of independence among the hundreds of thousands of working class and young people who took part in the anti-austerity uprising that was the 2014 referendum. 

a decade of austerity

Reasons for the critical reactions to the SGC report are not hard to find. The proposals from the commission, made up largely of leading Scottish Government ministers, SNP members and business figures – and devoid of trade union representation – are naked in their acceptance of big business interests.

An independent Scotland would seek to slash the budget deficit by holding down public spending below the rate of economic growth for up to 10 years. Specifically, seeking to drive down the deficit from the current 8.3% of GDP to 3%. The outcome would be savage cuts to public spending for years after independence. Nor could there be any possibility of a reversal in the decade of austerity already suffered by working class and middle class communities in Scotland.

The claim made in the report that under capitalist independence Scotland would catch up with other “small countries” like Denmark, Finland and New Zealand is a fantasy. Current Scottish growth projections average 0.8% a year for the next five years. Prospects for a world capitalist upswing that would allow the SNP to hit their growth targets are a chimera.

The 3% GDP government deficit target allied to the no more than 50% of GDP as an overall public debt ceiling may sound familiar. It’s because it is deliberately linked to the EU’s Stability and Growth Pact (SGP). The austerity straitjacket that countries sign up to in order to be able to join the Euro currency and to justify slashing public spending. In fact the SGP stipulates a debt target of no more than 60% of GDP, so the SNP’s proposal is even more stringent than the EU.

Ceding control

While the commission’s report does not propose joining the euro, it does make clear that an independent Scotland would allow the Bank of England to control interest rates and monetary policy. This is because for at least ten years an independent Scotland would use Sterling. Only if “six tests” were passed would a Scottish currency be transitioned to. The consequences of allowing the effectively privatised Bank of England to control such a large degree of economic policy would be to create another obstacle to radical, anti-capitalist measures on public spending, reversing austerity, introducing public ownership etc.

A socialist policy would necessitate the democratic nationalisation of the banking system in Scotland to ensure full control over currency, interest rates, public investment and the ability to provide affordable loans to small business and working people.

Partnership

Like the SNP’s 2014 “blueprint for independence”, the commission calls for “Partnership between government, business, trade unions and wider civic society to ensure policy can be made sustainable.”

Partnership has been used in many countries – Ireland being a prominent example – to bind the trade unions into a false policy of accepting cuts to jobs, wages and pensions to aid the “common good”. The policy of “we’re all in this together” only ever operates one way; against the working class and in favour of the rich. It effectively undermines the ability of the unions to fight industrially and politically to defend their member’s interests – which are incompatible with those of big business.

It is therefore a mistake for STUC leaders to be advocating “partnership” with the Scottish government. Far better that the trade union leaders start implementing decisions already made on paper. Including for coordinated strike action across the trade unions to defeat austerity and for a real recovery for the working class.

In reality the working class has to rely on its own collective strength, particularly the organised trade union movement and building for generalised strike action across all sectors of the economy. Only a policy of establishing fighting trade unions and by building new mass workers’ parties is it possible to defeat the cuts agenda and lay the basis for a socialist transformation of society.

EU bosses’ club

Although not mentioned in the “new case for optimism”, it’s clear that an independent Scotland under the SNP would seek to rejoin the EU. And that this will become a key part of any future indyref, post-Brexit. Indeed Nicola Sturgeon has confirmed that this would be the case. Yet, 400,000 pro-independence supporters voted in favour of Brexit in 2016. Opposition to the EU will increase as the reality of it anti-worker policies becomes clearer.

In fact this is clear in Catalonia recently. The EU establishment backed the Spanish state against the mass independence movement. The SNP leaders have been silent on this. The current crisis in Italy is also, at least partly, linked to mass disaffection with the EU and its austerity policies. Rather than a bosses’ club based on exploitation and profit, the working class could co-operate through democratic socialist planning to meet the needs of all across a socialist Europe.

Don’t tax the rich

The SNP’s commission proposals on how to tackle inequality are almost non-existent. On corporation tax they say: “we do recommend that the headline rate of corporation tax should not rise above the level prevailing in the rest of the UK.” Yet the rate of Corporation Tax in the UK has now fallen to 19% and it will be 18% by 2020 under Tory plans. The last decades of a bonanza of low tax for the rich and big business will, it seems, remain even under independence. The recent Scottish budget saw the Holyrood government protect the richest in society, despite for the first time having the powers to levy real wealth taxes.

In fact the SNP’s report goes on to say: “The decisions that are taken by government on the design of taxes and tax rates set should take account of the likely economic impact on the economy, including on behaviour of individuals and on businesses. This should include regard for maximising revenues, since increasing (or reducing) rates does not always lead to increased (or reduced) revenues; taxpayers can often change behaviour as a result of the changes made.”

This is neoliberal mantra for don’t increase top taxes or the rich and big business will flee the country. The only answer to this blackmail is to bring the finance sector, alongside the big companies, into public ownership. A socialist government in Scotland would also impose capital controls to prevent the elite from stealing the wealth created by working people.

Failed models

Twelve small nations are cited in the SGC report as models for an independent Scotland. Three are used most often, Finland, New Zealand and Denmark. Yet even a cursory look do not provide any way forward for those seeking an end to the nightmare of unending cuts and falling living standards.

New Zealand has among the highest levels of inequality in the world. The richest 10% control 53% of the wealth, while the poorest 40% own only 3% combined. Inequality is still growing, even under a so-called Labour prime minister.

In Finland, a series of strikes this year against the “Active Model” of unemployment have taken place. Helsinki was at a standstill on Friday, 2 February, as a strike by the transport union, AKT, quickly escalated into national action. Under the active model, unemployed people are required to prove they have worked in casual, often underpaid jobs or taken hard-to-access training courses in order to continue to receive social security benefits. It is explicitly being used to force unemployed workers to take low-paying, precarious jobs and then go through a maze of bureaucracy just to receive enough money for food.

The SNP’s report highlights the “Flexicurity” model of labour flexibility in Denmark, which is based on a “dialogue” between workers and employers. But what happens when both sides cannot agree? A big strike and lockout in the public sector in Denmark was planned in April 2018 and was only called off after concessions from the employers and government.

Denmark is in the midst of a boom, with record company profits and dividends being given to shareholders. In 2017 alone, the state’s tax revenues increased by 31 billion Danish Kronor. There are growing demands for a real wage increase after a decade of stagnant wages and worsened conditions. In particular, the trade unions are demanding most for the low-paid and equal pay for women workers. Statistics show that women earn an average of 13.2 percent less than men.

Socialist campaign needed

Socialist Party Scotland, as we did in the 2014 referendum, will call for a specific trade union, socialist-led, anti-cuts and pro-working class campaign for an independent socialist Scotland. One that while supporting a Yes vote in an indyref 2, would also fight for the powers of independence be used to end and reverse the cuts and for socialist policies.

It would be a big mistake to allow the pro-capitalist forces gathered around the SNP leaders to dominate the discourse over the need for independence. The voice of the organised working class needs to be heard with a clear anti-austerity and pro-public ownership message. One that also recognises that there are differences among the working class on the issue of the referendum.

Central to this is the burning need to build a new mass working class party that would fight for the powers of independence to be used in the interests of the working class. Unless the left inside the Labour Party in Scotland fights for a real anti-austerity party, for councillors, MPs and MSPs who will oppose all cuts, and for the mandatory reselection of those who don’t, and for a socialist policy on the national question, then a new mass working class party will need to be built.

Socialist Party Scotland calls for the powers of independence to be used to dramatically increase taxes on the rich and big business. We also argue for an immediate levy – of at least 50% of the un-invested funds of the big corporations – to be used to develop a massive programme of socially useful production, job creation and public services.

An independent socialist Scotland would need to seek to build a united movement with the working class in the other nations; England, Wales and Ireland, across Europe and internationally. This would lay the basis for a free and voluntary socialist confederation of states and an international plan of production.

A socialist programme for Scotland

• Nationalise, under democratic workers’ control, the oil and gas industry, the renewable energy sector, and the major sectors of the Scottish economy. This would release billions to invest in a massive programme of job creation and to rebuild our public services.
• Bring the banks and finance sector into public ownership under democratic working class control.
• Renationalise gas, electricity, transport and the privatised sectors of the economy. Scrap all PFI/PPP schemes
• Tax the rich and big business. Increase the minimum wage to £10 an hour, scrap zero-hours contracts and end the attacks on welfare.
• No to Nato. Trident and all weapons of mass destruction out of Scotland. Invest in socially useful jobs.
• Abolish all anti-trade union laws.
• Build a mass working class party to fight austerity and for socialist change.
• Reverse the cuts. Councils and the Scottish government must set no cuts budgets and defend jobs, wages, public services and pensions.
• For a socialist plan of production in an independent socialist Scotland as part of a voluntary socialist confederation with England, Wales and Ireland as a step to a socialist Europe.