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Isobel Lindsay

 

 

Isobel Lindsay,former Convener of Campaign for Scottish Parliament.

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Isobel Lindsay

The Economic Crisis and the Independence Debate

After the financial sector disasters, promoting the economic case for independence will be more difficult unless that case is presented as an opportunity for new thinking.  That means drawing a clear line between the neo-liberal consensus of the past two decades and aspirations for Scotland’s economy and society.  People’s response to an economic crisis can go in two directions – hunker down and cling to the status-quo or seek out new solutions.  Independence has to be seen as the chance of a fresh start.

The banking crisis arose not just from some sub-prime mortgages in the U.S. but from the fundamental flaws in the neo-liberal ideology that promoted unrestrained markets driven by personal and institutional greed.  Corporate power was assumed to know best and to have the right to drive public policy.

Fortunately Scotland kept a substantial public sector although it was criticised for doing so (remember how we were told that ‘bad’ public investment was ‘crowding out’ good private investment).  We did not go down the route of creeping privatisation in education, health and care services to the extent that the Labour Government has done in England. But too many went along with the view that corporate power and, in particular, large financial institutions would be the base on which an independent Scotland would thrive.

We can make a strong case that the full economic powers of independence are necessary to act effectively on employment, infrastructure and social justice but it will only be seen as a strong case if the public can see a vision of the Scottish economy that is different.  We need to go back to Scotland’s substantial strengths and put the emphasis on building a good and sustainable economy. But this has to start with some honest “We got it wrong” confessions.  Labour, SNP, Tory and Lib Dem, all got it wrong in relation to what was happening in financial institutions in Scotland.  They were too close to the bankers and too complacent about an economy driven by massive debt.  To be fair to the SNP on one issue, they have resisted (and have taken a lot of opposition and media flack for doing so) the expensive, speculative vehicles of PFI schemes.

“We got it wrong” can be the start of a new ‘national conversation’ on what we want the Scottish economy to deliver.  A debate on the quality of life people want and on sustainable development in the context of a review of Scotland’s natural and human resources would focus on the future and would lead inevitably to the necessity of having core fiscal, monetary and welfare powers here.  In this context, the questions will not be about whether an independent Scotland could have poured billions into the banks but about how we create an economy where we have an effectively controlled financial sector that doesn’t need to be bailed out, a sustainable energy policy, good education and social care, more investment in recreation and culture rather than in retail ‘palaces’, greater focus on local manufacturing and food production.  We also need a Council of Economic Advisers which includes some strong Left and Green voices given the unimpressive list of recommendations to date from existing members.

Comments

Hugh 03/04/09

I'm sorry to say that this article and the whole idea of scottish independence is laughable. It's financial sector is in meltdown, only bailed out by taxpayers from the whole United Kingdom, and with oil prices low, it is draining the finances of the rest of the UK too. Scotland has neither the resources neither the will for independence. A whole can of worms, such as sectarian protestant-catholic hatred would be unearthed, and the country could turn into a potential northern ireland. North sea oil is declining so pretty soon it will have few natural resources to speak of, and besides - there is no umbilical chord which could be cut between Scotland and England; the economies of these two parts of the UK are inextricably linked and can't simply forced apart without severe repercussions for both states. So why ask for independence? Are the people of Scotland simply bored with stability and prosperity that they need to experiment with their lives by forging a national identity and attempting to destroy a 300 year old union? The whole thing seems laughable to me, sure - dream on but in reality this is complete and utter nonsense.

   
David McEwan Hill 13/03/09
I'm completely with Isobel on this. We have to raise the bar and every aspect of our national life should be stood up in the daylight and looked at seriously. I'm absolutely certain that there is a million ideas out there of ways we can do things better and we should be reaching out to the people with these ideas and giving them a opportunity to put them forward. I can think of no better way to give people a vested interest in independence than to encourage them to think how their ideas could let us do much better if we had the power. The problem however is we are engaged in a war of attrition at the moment and just holding our ground presntly is a magnificent result. There is evidence that the unionist waves are loosing their strength and the media onslaught on the SNP is experiencing steadily diminishing returns. In then political cycle this is about the right time to be taking the hits and hopefully a programme of constructive and popular change can be moved into place as we proceed towards the next election. The set up of the Scottish Parliament deliberately presents us with a particular problem being designed to frustrate movement to independenceby making an SNP majority in Parliament almost impossible to achieve. There is a major flaw in this plan however. It only works for the union if all Labour, Tory and LibDem representation remain unionist. It is indeed a great pity that T Sheridan's ego destroyed a potential union buster when he split the socialists. However the fault line in Scottish politics lies in the proportion of Tory, Libdem and particularly Labour suporters who would vote independence and if this latent support could be brought to putting pressure on the people they have elected a split in the unionist hemogeny could be the outcome. The independence Convention is ideally placed to help wavering unionists over.
   
Collin 13/03/09
Scotland has always been independent. Neither Rome Norway nor England colonised it. Don't let Brussels. England once was a republic and didn't like it. Later they looked to the other home nations when they ran out of prospects for head of state.
   
Alan Fisher 06/03/09

The Independence Convention is all very laudable but too full of sentiments which avoid the fundamentals.

At present, the SNP proposal for a referendum on Independence, whether or not the Scottish Parliament ever adopts it, will remain "pie in the sky". Already, using current events as an excuse, opposition to it amongst opposition parties is mounting.

As far as the main power base in the South is concerned, Devolution has "parked" the Scottish dimension for ever! The concept of a truly autonomous and viable Scotland is met with howls of derision by the very small minority "down there" who ever even think about it. Any independence bill in Holyrood will be met with fierce opposition at Westminster which will go to almost any lengths, including suspension of the Parliament under the 1998 Act, to resist it. If handled badly by Scots, the twin, dishonest weapons of the threat to UK security and the economic hopelessness theories will be deployed as totally overriding issues. Any sentiment as to the sanctity of any majority vote this side of the Border to break away will be subsumed in hopeless bickering and outvoted in the House of Commons which, in effect, will be required to repeal the 1998 Scotland Act and then dissolve itself pending the convening of entirely autonomous Parliamants in both England and Scotland. In so doing, despite the Scottish population size being habitually quoted as a fatal weakness in our Independence argument, No. 10 would, nevertheless, have to concede to the shrinking of its present power base and, therefore, its international standing. That is where, paradoxically, the significance of Scotland will be played up by the very people who seek to sweep the issue under the carpet. To say it will find that to be both humiliating and awkward would be an understatement. In the final analysis, this is about power and status or the perception of it.

Again, paradoxically, Scottish Independence is, de facto, a British matter to be decided by the British as a whole! This is where Scotland holds the vital ace, not yet played and hardly appreciated this side of the Border. This lies in the actual, unwritten Constitution of the United Kingdom of which Scotland's status is of an equal partner. Remember, it was James VI who took over both countries as a "joint venture" and was applauded for it at the time!

It was, therefore, both unconstitutional and should have been illegal to precipitate the totally alien contrivance of a "puppet state" on one half of the Union still participating at Westminster. As we know, the Act setting up our Parliament was brought about to consolidate certain Party advantage and thereby, totally cynically, rendering it economically impotent to affect its own viability. The 1998 Act, portrayed as quasi autonomy with assurance of National economic regeneration to fool the public, clearly sets out the limitations sealing in both dependency and subordination and denying any capacity for further autonomy; despite empty protestations to the contrary.

That Act, carried by a majority vote at Westminster is more scandalous, by far, than the one manipulated to invade Iraq. Until this is properly understood and exposed as intentionally fraudulent and, in a true sense, efectively a criminal conspiracy against the very Nation it vaunted, real progress to resolve the Scotland Crisis, will be denied us. Sycophantic praise for the late Donald Dewer and what he perpetrated should be exposed for what it is. It is, so far, a tragedy that the majority of the British population, in England, is unaware of the perversion enacted in its name which, far from adding to its future prosperity and tranquility, will be to its ultimate detriment.

The only justification for the SNP achievement in "governing" Scotland under this current and wholly flawed arrangement is not to give Devolution credibility and present it as a success, which it can never be, however well they have done within its limitations, but solely as "caretaker" of a system doomed to fail.

The current, global economic crisis emphasises how pathetically vulnerable Scotland is within the UK where any attempt to engage our true potential based upon a Block Grant is, in real economic terms, a physical impossibility. This is, therefore, the moment for an accelerated campaign to instigate the debate to penetrate throughout these Islands at a pace and at a level of wide-spread self confidence never yet seen.

   
Kevin Williamson 08/02/09

Good blog, Isobel. 

I hope the doubters who were taken taken in by the impressionism of the British establishment - who wrongly equated Recession with A Strengthened Union - will look at the opinion poll in today's Sunday Herald (8th Feb 09) and see reality staring them in the face.  The poll shows a resurgence in support for Scottish independence - 40% against, 38 % for- as recession starts to kick in.  And this is a recession still in its early days. 

The British parliament is failing to protect Scottish jobs and industry and Scots are seeing this every day now.

Westminster values are failing us.  Westminster is prioritising VAT cuts (cost £12bn), ID cards (cost £10-20bn), bank bail outs (cost +£1000bn), nuclear weapons (cost £25-75bn) in an reactionary incarnation of skewed Keynesian economic values.

With the same resources utilised in, dare I say, a more Scottish way, we could have spent our way out of recession by building hospitals, schools, and as a first priority social housing - thereby solving the housing problem for this and the next generation. And creating full employment in the process.

We have been sold a neoliberal pig in a poke by Westminster and its corporate agenda.  Scotland could do so much better for its people given full political powers.

The countdown has now begun to the 2010 Referendum Bill and the Referendum itself on 30th November 2010.  We should be looking forward to 2010 with confidence and staying positive!  It's all to play for.
   
David Carty 07/02/09
There is only so much money in the world. If the super rich and aristocracy can continue to salt away money in Tax Havens. Creaming money off the top and as one person said “I pay less tax than my cleaner" Then greed will continue to rule our motivation. US president Obama is considering closing the tax haven loopholes. If this is done around the world and there is true transparency in banking then the crisis we are currently seeing will no longer be able to occur. If banking is regulated, then economics will be a much safer and accurate science. If governments know where moneys are going then the crooks will be caught whether criminals or twisted businessmen protected by the dark shrouds of secrecy they camouflage their dealings with as in the past. People who work in the public sector provide a service for the people. People who work in the private sector supply their labour for companies and sometimes for corporation fat cats. In Scotland we have in the past been slightly left of centre politically. Serving the people came first. The people are a renewable resource, we should protect, encourage and sponsor this resource, not have it lying lifeless in a barren landscape. If we don’t learn our lessons of the past, we are fated to repeat them in our future. Bring in banking regulation, make the world a level playing field and let honest men do honest work. If the regulators know their jobs, businesses will still get investment, people will still have jobs and the economy will prosper. Possibly slower growth in the economy but with certainly, the people will have confidence in the government. In an independent Scotland RBS could be rebranded the "NBS" National Bank of Scotland (the people’s bank). An Asset of the people of Scotland much the same as Scottish Water. (Another target for Westminster)
   
Stephen Maxwell 04/02/09

Isobel Lindsay provides a valuable perspective on how Scotland - and the independence cause - can start building a path out of recession.  While there is little that a devolved Scottish Government can do to influence the course of the recession in Scotland, simply waiting for it to pass is not going to be enough. As Isobel argues the independence movement needs to think through how an independent Scotland might differ from the Scotland which through its bloated banking sector has made its own considerable contribution to the economic crisis we face.

It is surprising that the Government has so far made no public statement about how it sees the implosion of the Scottish banks affecting Scotland's economic prospects beyond independence. Are we to understand that the Government is content to allow the Scottish banks eventually to recover their former role in the Scottish economy?. If so how?.  Is the expectation that before independence dawns the banks will have been returned to private ownership - and that somehow that private ownership will be predominantly Scottish allowing the restoration of real not merely titular head offices to Scotland?

And even if that is achieved what form of bank regulation will be required?  Will Scotland follow the Nordic model of relatively tight regulation at the cost of restraining  the future international growth of Scotland's financial sector: will it subcontract financial regulation to London as the sector's champions will no doubt advocate: or count on Brussels to provide an escape route as with the currency?. Can we at least be sure that the crisis has finally discredited the Irish model in the minds of nationalist polemicists?

It would be unreasonable to expect the Government or any other Scottish players to have reached a confident answer to such leading questions, let alone to have assessed the more radical options in banking as in other areas of economic activity which the crisis has opened up.  But well over a year into the financial crisis it's urgent that advocates of independence start seriously examining what it implies for their ambitions. 

   
Chris Walker 01/02/09

In what I judge to be an excellent piece of analysis I am especially struck by the confidence-boosting note struck for independence itself: no fearties here.

Equally, I applaud the absence of any "wha's like us" lexicon. The iconic RBS, for example, is nonetheless also the embodiment of "Fred the Shred" and we should recognise the damage this has inflicted on nationalist perspectives of a future Scotland.

For I fear that the received political wisdom is that the global meltdown has hurt the case for independence. That, however, can be shown to be the antithesis of real politik and I am pleased that Isobel says so rigorously and confidently.

The referendum looms ever closer and it is imperative that a proactive component for independence is integral to any SNP presentation. I am concerned with the continuing softly-softly approach. I also believe that the specifics of the much heralded "velvet divorce" must be spelled out for I fear that this has been a neglected aspect of the SNP case thus far. We can be bold but conciliatory at the same time. Indeed must be.

It will be toxic to our chances of success if how this can be brought about is not convincingly presented. This will demand policy specifics, repeat specifics.

I have argued this elsewhere anent the "Tartan Shawl" defined as the seductive comfort of good governance at Holyrood versus the uncertain and much rougher route of independence. They are not mutually exclusive but unionist apologists will try to make them so.

   
Alan Clayton 29/01/09
One of the historic reasons I think for some of the public antipathy to public ownership,or a least to nationalised industries,was the fact that it resulted in much removal of decision making and jobs to London and the South East. This need no longer be the case and the Royal Bank for example should now be formally nationalised and placed under Scottish government control.
   

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