Scots want economic independence – but how badly?


By thwarting the voters’ widespread desire for their parliament to have full powers over taxation via the mechanism of the Scotland Bill the Labour, Lib Dem and Conservative parties have become an austerity alliance

by Alex Porter, Economy Editor

With the Holyrood election campaign imminent none of the horse traders would have seriously risked bringing down the Scottish budget and opprobrium on their parties’ heads.  It was a forgone conclusion that Labour’s chronic oppositionalism would see it vote against any SNP budget and the smaller parties would have to fall into line to make passing the budget arithmetically possible.  With the Scottish budget adeptly ushered through by Finance Secretary John Swinney we can now turn to the political elephant in Scotland’s economic room – Westminster austerity cuts and Scotland’s determination to stop them.

Scotland in post-austerity Britain

Two news items in the last week have given a glimpse into the future in Britain PLC post-austerity.

Covered here by Newsnet Scotland, the first examined the shocking news that North Ayrshire council is considering implementing a plan which would introduce a four-day school week for its childen at both primary and seconday schools.  Public spending is being decimated to pay for the UK’s spiralling budgets deficits and so a way of life, taken for granted since the introduction of the welfare state, is at stake.  The social implications of this kind of policy are profound and threaten Scotland’s status as a first-world nation.

The second item hitting the headlines is the revelation that Glasgow University could be insolvent by this time next year.  According to Principle Anton Muscatelli the university, established in 1451, could run out of money in academic year 2012-13.  The university has sounded the alarm and has drawn up plans to end or merge a number of courses to help make £20 million in savings over the next three years.

An indication of the financial dire straits in which the university finds itself is that the plans include the controversial merging of the history, archaeology and classics departments as well as the axing of several modern language courses.  Such extreme cuts will undermine the international prestige of the university and Scotland’s rankings in the world of academia.  For a nation which was once the preeminent academic hub of the world during the period of the Scottish Enlightenment and whose academic innovations include the professorial system itself, it is unthinkable that one of its ancient universities should not have an independent anthropology department.

Given the parlous state of the UK economy and the public sector cuts planned by the ConDem government in London, it is critical that those facing consequent redundancy and unemployment in Scotland can have access to educational courses.  However the university is considering cutting its evening and weekend classes which are currently subscribed to by 5000 adult learners a year.  The social dimension is further affected as vital courses in nursing and social work face a cull, and additionally the university’s renowned Centre for Drugs Misuse Research faces the axe.

Scotland’s Unionist opposition parties will, as politicians do, try to blame the SNP government for the cuts, but the reality which has to be faced is that the cuts are being forced on the Scottish government by Westminster.  London is cutting Scotland’s block grant by a total of £1.3bn in 2011-12 (that’s less than the previous year), a figure which is not even adjusted for inflation.

The SNP finance minister has saved Scotland a lot of money through creating efficiencies in the public sector, especially in the area of procurement, but a £1.3bn (around £1.7bn when inflation adjusted) hole is more than difficult to fill.  Council services and employees, universities and others will invariably take a hit.

Powers not cuts

However amidst the negotiations and horse trading over Scotland’s diminishing budget, we risk losing sight of the salient issue.  The cuts are not necessary.  Scotland’s national accounts (GERS) show a surplus, so the £1.3bn question is – why the cuts?

Alex Salmond’s party will argue that with Full Fiscal Autonomy (FFA) none of these cuts would be happening.  The fiscal surplus which Scotland currently enjoys could, the Government argues, be spent on increasing – not cutting – public expenditure.  Westminster’s cuts are about paying for the UK’s deficit, a deficit which is generated south of Hadrian’s Wall.  With FFA Scotland would not be have to be held accountable for its neighbour’s debts.

The Unionist parties have anticipated these calls for FFA and have preempted them by drawing up the Scotland Bill proposals.  The Scotland Bill will give and take some powers from/to the Scottish parliament but these powers are not significant and experts believe that they are “unworkable” and “dangerously flawed”.  Polls show a clear majority (57%) of Scots favour their Parliament having full tax powers, but the Scotland Bill falls far short of that desire.

Critics claim the Scotland Bill does “not go nearly far enough” and is badly crafted because it is merely a device for channelling the Scottish electorate’s desire for significant change into a constitutional cul-de-sac.  Unlike FFA the Bill does nothing to protect Scots from Westminster’s cuts agenda and so the three Unionist parties, by designing the flawed Bill then colluding to usher it in, leave themselves open to being castigated as an austerity alliance.

The critics make a good point.  The SNP will argue at the election that Scotland needs economic independence.  It has a compelling case and there is clear public backing for it, but is it deliverable?

The truth is that even if the SNP are given a second term by voters there is nothing it can do to gain more powers for the Scottish parliament.  The Scottish parliament can not add or subtract from its own powers.  Control over the Scottish parliament’s powers is retained by Westminster.  The nationalists tend to do better at Holyrood elections than Westminster elections and so as long as the Unionist parties constitute a majority of Scotland’s MPs in Westminster there is nothing the Scottish people can do to have such democratic demands met.

If popular desire is to be satiated then a popular campaign to demand more powers would have to be launched.  The problem though is that the subject is rather a dry one.  It is difficult to imagine masses of demonstrators on Princes Street in Edinburgh chanting, “What do we want?  Full Fiscal Autonomy.  When do we want it?  Within the current financial year.”

Campaigners would need a seductive slogan that could act as a focus and mobilise the public to put pressure on the Unionist alliance currently blocking such significant reforms.  Swingeing cuts resulting in such profound social changes as the proposed four-day school week do offer siclike opportunities.  Fiscal Autonomistas could point out that economic independence would protect Scotland from the very clear and present dangers which London’s austerity programme hold for Scotland.  Many struggles throughout history have been won and lost premised upon the popular appeal of a slogan. “Make love not War” heavily influenced public perceptions during the Vietnam war because it was and still is evocative and appealing on many levels.  “Powers not Cuts” or “Autonomy not Austerity” don’t really cook the same goose.

Paradoxically Salmond’s team faces the situation whereby pointing out the limited powers the Scottish parliament has to effect change in the economy actually depresses voters, who feel then feel that their parliament and by extension the SNP government are impotent.

It would be something of a relief for the SNP then if such a popular movement arose.  In that respect there is much sound economic thinking currently being done behind the scenes by organisations such as Reform Scotland and the Campaign for Fiscal Autonomy but these are ill-suited to the purposes of a Scotland-wide grassroots campaign movement.  The brain power is already in place so it requires only an umbrella organisation to set the heather alight.  With austerity looming such an organisation would find allies the length and breadth of Scotland and from boardroom to livingroom.

The situation whereby Scots go to the polls wanting full economic powers but vote for the Unionist parties who seek to block these powers indicates that one of those Jedi Knight mind-tricks are in play.  Indeed, it brings to mind the Monty Python crucifiction scene whereby one of the Christians who are in line to be crucified briefly interrupts reality when he tells the Roman he’s taking the freedom option.  He’s actually taken seriously for a moment and is going to be set free before revealing that he was pulling the Roman’s leg.  The moral of the story is that servitude is all in the mind.

With the Unionist parties ignoring the public mood over the subject of economic independence, the moment for a new movement dedicated to the Scottish parliament having its own treasury has arrived.