The ‘Swinney report’ shows why we need to be radical when it comes to economic policy
The ‘top secret dossier’ that was a ‘hammer blow to the SNP’, according to Alistair Darling and Better Together, was certainly overblown and distorted by the unionist press as per usual. But let’s not kid ourselves; it was damaging. If you were a pensioner or on state benefits and you opened up the newspapers on Thursday morning you would likely think twice about how secure your future was going to be under independence. The Daily Record had an anxious Swinney on the front with a 2-page spread inside on all of the doubts raised in Swinney’s memo. It wasn’t comfortable reading from a pro-indy perspective.
Salmond did his best to shore things up at FMQ’s and expose some of the propaganda surrounding the ‘discussion paper’, but the damage had been done: independence is likely to be won or lost on whether people feel economic security is more likely in an independent Scotland or in the UK; this was a bonus for those who think we can do no better than austerity Britain.
This is very frustrating for a number of reasons. Pensions, state benefits and welfare in general are areas in which the pro-indy camp should be making hay. After all, it’s under the UK that you are being asked to work longer, pay more and get less. It’s under the UK that the much loathed Bedroom tax is being introduced and universal tax credits chopped. It’s under the UK that the economic security of millions of Britons who are in some way dependent on the welfare state is being pulled from under their feet. Yet the argument against the UK is still stuck on the back foot. Instead of attacking the insecurity of the status quo we are under attack for the potential insecurity of our potential future.
It’s doubly frustrating because the idea that Scotland would be prey to the ups and downs of oil markets should be an argument that is easily disposed of. Norway is more dependent on oil than an independent Scotland would be, yet it is a much more progressive country than the UK on public services and wealth redistribution (redistribution from the rich to the poor that is, Britain IS fantastic at wealth redistribution the other way). Oil should be an added bonus to a country which has rich economic resources that can be levers of raising revenue, a bonus that we should be actively looking to wean ourselves off if we are serious about leading the world in lowering carbon emissions.
Let’s take one example to prove this from something recently promoted on the Jimmy Reid Foundation: a whisky tax. Whisky lobbyists do much to emphasise their own importance to Scotland’s economy, but as Bigger Economics have pointed out in a recent report, the current benefits of booming sales in Scotch Whisky abroad are ‘disappointing’. A £1 tax on every bottle of Scotch Whisky would raise £1billion pound in revenue. That’s all your public services paid for right there. But surely this is naïve: what about capital flight? What about reduced demand? For the former question the answer is so evidently simple, Scotch Whisky must be made in Scotland, you can’t ship it or, more importantly, threaten to ship it to Delhi. On reduced demand, the report also makes it clear that if the company did offload the price onto customers it wouldn’t significantly alter the amount of an already expensive good, therefore the demand is unlikely to radically change.
Swinney doesn’t come across as the type to think outside the box, however. ‘Such measures could scare business from Scotland’, ‘you can’t punish successful companies’, are the usual dogmatic responses that probably echo in Swinney’s ears day after day. The parts of Swinney’s report which emphasised the benefits of independence were all within the neoliberal safety net.
Lets face facts, we need to be realistic: which means we need to be radical when it comes to economics. The starting point has to be that politics should be the master of economics. We are not simply at the whim of uncontrollable global market forces. The economic forces that control our lives are under human control, only it’s the human control of the bankers, the credit agencies and the corporate shareholders. In otherwords the unaccountable, at least unaccountable to the public. The public must re-enter the economic sphere and impose its will. Here’s a few ideas that come to mind: re-nationalisation of public transport with low fares and faster services; public green investment bank to fund green energy schemes; targeted taxation policies on the rich and corporations; a rebooted revenue and customs service which focuses on cracking down on tax avoidance and evasion; increased funding in education and research to build a highly skilled workforce; building of well insulated, sustainable social housing.
I’m not an economist (I’m sure most people reading this could come up with more precise, more appealing radical proposals) but what we need to keep in mind is that neither is John Swinney an economist. The time when a model for economic security means to stick to the neoliberal textbook is over. The time when a model for economic security means to overhaul orthodoxy and impose radical solutions is now.
This article was written by Ben Wray, an activist in the Radical Independence Campaign in Glasgow.