Brexit throws into sharp relief the challenges of leaving a political and economic union. And yet a few weeks ago, undeterred, the Scottish National Party launched its latest attempt to persuade the people of Scotland to leave the political and economic union of the United Kingdom.
It was billed as the “Growth Commission”, but in reality, it is a cuts commission with a vision of Scotland that people do not want: another wasted decade with people living, surviving, many struggling under the dogma of a deficit reduction plan. And we know what that looks like, with the rising reliance on foodbanks, more winter evictions, increasing numbers sleeping rough, as social security sanctions and real wage cuts bite deeply.
Within days of the SNP document being launched, the highly respected Fraser of Allander Institute said: “The report opens up some important questions about the ‘type’ of Scotland we wish to see in the future.”
And they were right. Because what is clear now is that only Labour can unite people in Scotland around a vision of hope. The Growth Commission claims to offer a “clear-sighted analysis of the prospectus for independence.”
But it is a prospectus based on a hard decade of public spending contraction, and even deeper cuts than those implemented by George Osborne in order to drive down the public sector deficit in Scotland, from 8.3 per cent of GDP to below three per cent.
As the Institute for Fiscal Studies warns: “Their plans would mean spending on public services and benefits falling by four per cent of GDP over the course of a decade.” This is fiscal shock treatment.
It also proposes a £5bn Annual Solidarity Payment be sent to the rest of the UK Treasury. And it is based on a “prospectus for independence” built not on sovereignty regained, but more accurately on sovereignty lost:
– Over interest rate policy
– Mortgage rate policy
– Exchange rate policy
– Inflation policy
– Money supply policy
– Corporation tax policy
And it promotes an economic model which relies heavily on foreign direct investment, on large multinational corporations and labour market “flexicurity.” No wonder the First Minister’s Commission consulted 20 business organisations but did not contact one single trade union. In contrast, just over a year ago, nearly 13m people put a cross on a ballot paper for a radical Labour manifesto with an unflinching commitment for the first time in a generation to end austerity, to extend public ownership and to bring about redistribution of not just wealth but also of power.
Our task in the Scottish Labour Party is to build on this positive platform to re-awaken hope out of despair and in so doing, secure the return of Labour governments at Holyrood and Westminster. Because in truth, the real division we face is not between Scotland and England – it is between those who own the wealth and those who through their hard work and endeavour create the wealth.
One in four children in Scotland are living in poverty at a time when the richest one per cent in Scotland own more personal wealth than the poorest 50 per cent put together. That won’t change by redrawing lines on a map; it will only change with a redistribution of wealth and power.
That is why we as a party have argued for a more progressive income tax system and for consideration now to be given to a wealth tax. Because there is nothing wrong with the old socialist principle of from each according to their means to each according to their need.
That principle applies to business too. The Growth Commission proposes an effective cap on corporation tax, which at best passes control over business tax policy to a state Scotland has just withdrawn from and, at worst, starts a race to the bottom.
On the other hand the Scottish Labour Party is offering people a decade of investment and not another ten years of austerity. Only Labour’s plans provide a transformative £70bn to invest in Scotland over ten years, prioritising health, education, housing, and jobs.
Ours is a radical strategy which puts full employment at its heart, ending complacency about real unemployment and ending the age of insecure work. We are also proposing a £10 per hour real living wage giving around half a million workers in Scotland a pay rise.
We have set out an industrial strategy in which we make the case for more planning and less market. The result will be more democracy in our economy, not just when things go wrong, but to help things go right in the first place.
As far as the Labour Party is concerned trade unions have a central role to play in the new economy, not just defending their members, but using their members’ knowledge and skills to plan for the future. And in our industrial strategy, through a new approach to long-term investment, we will herald a renaissance in our manufacturing industries.
We will also seek out new ways to deliver modern forms of democratic planning in the economy. That is the clear choice between Labour and the SNP.
We seek to put economic power directly into the hands of the people to drive forward growth from the bottom up with an active interventionist role by government, while the SNP seeks to make Scotland even more of a branch plant economy which will be overdependent on overseas boardrooms and volatile foreign direct investment.
In the coming months the First Minister should put the NHS ahead of the SNP and sort out the problems in our public services. But Nicola Sturgeon instead plans to spend this summer convincing her own party members of the case presented by the Growth Commission. Hers is a fiscal agenda in thrall to big business which slavishly follows the mantra of deficit reduction.
Trade with our nearest neighbours will be put at risk by a new political isolationism with no space for trade unions or workers’ rights as part of a strategy to promote economic growth. That’s not just the Tory vision for the economy – it is now the SNP’s too.
The choice before the people couldn’t be clearer, the austerity economics of nationalism or the transformation of Scotland’s economy in the UK with Labour. Which is why my appeal to anyone who shares our vision of the new society we must build, and of the new economy we must construct is to join us and come and be part of this movement for real and radical change which only Labour is offering. It is a cause which is international, a hope which is eternal and I believe it is the call of history to this generation.
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