The left-wing case for Scotland’s independence starts with democracy. For 27 of the first 65 post-war years (1945 to 2010) Scotland was governed from Westminster by Governments which it had rejected at the polls. In the 2010 General Election the two parties that formed the coalition Government gained only 36 per cent of the Scottish vote against a combined SNP and Labour vote of 63 per cent. If the coalition survives to the end of its five year term Scotland will have been governed from Westminster by parties it rejected for thirty two of seventy post War years. That will mean that for almost half the post War period the tax, welfare, industrial, energy and labour market policies applied in Scotland will have been decided by Governments Scottish voters did not vote for. How can a country expect to flourish if it is ruled for long periods by Governments it does not want?.
When those Governments are ideologically hostile to the politics of the ‘rejectionist’ country they rule the malign effects will be magnified. That has been the case with the Westminster Governments rejected by Scottish voters since Alex Douglas-Home’s 1964 Government, the Governments of Heath, Thatcher, Major and Cameron. From Heath on, these Governments have been progressively more hostile to Scotland’s social democracy. The growing divergence between Scottish and English voting patterns has cost Scotland twenty one years of social democratic government it could ill afford to lose with another four lost years in prospect under the existing coalition.
Mrs Thatcher’s Governments exacted a particularly high price. Scottish manufacturing employment declined by 30 per cent while poverty and unemployment rates doubled. Adding to the injury Mrs Thatcher enjoyed a massive £160bn (2008 prices) inflow of oil revenues principally from Scotland’s North Sea territory to spend on her failed experiments with monetarism and selling Council houses at grossly discounted prices.
But the cuts in public expenditure on which the coalition Government is now embarked exceed anything which Mrs Thatcher aimed for let alone achieved. Contrary to the pro-market commentators intent on using the failure of the West’s banking system to persuade Scots voters that their welfare state is no longer affordable, Scotland does not have a disproportionately large public sector by the standards of the most advanced democracies particularly when North Sea oil production is counted as part of Scotland’s national output as it should be. Yet the Independent Budget Report on Scotland’s budgetary prospects from 2011 estimated
that between 2011 and 2026 £42bn would be stripped from Scotland’s spending budget. It failed to note that on conservative projections of oil production and price levels Scotland could send twice that sum in oil revenues to the UK Treasury in the same period.
That does not mean that an independent Scotland in control of the revenues could escape all the effects of the world’s worst financial crisis since the 1930s – “or possibly ever” in Mervyn King’s opinion – but it does signal that it would have more opportunities to pursue social democratic policies than are likely to be available as part of the United Kingdom.
It is not that the rest of the United Kingdom does not have the financial resources to pursue progressive policies on its own account. Scotland’s North Sea revenues make a net contribution when balanced against higher Scottish per capita expenditure of less than one per cent to the UK’s total public revenues. The UK or ‘rest of UK’ could easily absorb the loss of the £7-8bn of Scottish North Sea revenues it stands to draw annually over the next two decades under the status quo if it chose to diversify its revenue sources and reassess its political priorities. About £70bn a year is lost to the UK Treasury by tax avoidance or evasion while under the UK tax system capital wealth, so much of which is concentrated in London and the south-east, goes virtually tax free. And then there is the enticing possibility of raising revenue from some form of Tobin Tax on financial transactions.
Independence is unlikely to spark an instant Scottish Spring of radical reform. But it can be expected to increase the urgency in those institutions which sustain public debate and prepare the way for change.
If these options are excluded by the veto power of the City of London there are more accessible options. The Iraq War cost about £9bn. The UK’s nuclear deterrent costs over £1bn a year, with a further £1bn in preparatory costs for the Trident replacement now added each year. From the 2015 decision ‘Gateway’ for the Trident replacement further sums from the estimated £25bn cost of the replacement will be added. These all contribute to the UK’s status as the world’s fourth largest spender on defence at 2.5 per cent of GDP, second only to the United States among NATO members.
GERS 2009-10 identifies Scotland’s contribution to the UK defence budget at £3.2bn. If an independent Scotland spent the same 1.5 per cent of its GDP that Norway spends as a non-nuclear member of NATO its annual defence budget would be around £1.8bn releasing £1.4bn for promoting alternatives to the UK defence jobs that would be lost to Scotland and for spending on maintaining and improving public services. More radical defence strategies would save even more.
But the security case for independence offers another benefit. If Scotland insists on the removal of the UK’s nuclear submarines from Faslane that could be the catalyst for the abolition of the UK’s abandonment of its nuclear deterrent. The financial costs to the UK of providing an alternative to the base facilities on the Clyde would run to several billion pounds. Even more problematic would be the willingness of voters in areas identified as possible sites on the coast of England, or even Wales or Northern Ireland, to accept in their locality an operational nuclear base for four missile-carrying submarines and probably up to ten other nuclear powered submarines. It is more likely that an English public increasingly sceptical towards the case for the Trident replacement would finally call a halt to the UK’s nuclear obsession.
Meanwhile the mooted alternatives to independence such as full fiscal autonomy or independence-lite would, among other disadvantages, deny Scotland the substantial economic dividend to be won by going non-nuclear which depending on the defence policy followed by an independent Scotland could be up to £1bn a year. Scotland’s options for alternative economic development and for social reforms would be more limited as a result.
Defenders of the Union will look for salvation from two possible sources. First they will hope for a revival of the Labour Party’s electoral fortunes in England to reconcile Scottish social democrats to the continuation of the Union. But the prospects for this are uncertain at best. It is not just that the Labour Party has a hard route back to power in the face of the loss of public trust in its economic competence, its near wipe out in southern England and changes in constituency boundaries. The more fundamental problem is the public’s confusion over what a Labour Party which under Blair opened the door to many of the market reforms of the welfare state which the coalition Government is now developing actually stands for any more. Even if Miliband and his colleagues are able to develop a coherent vision capable of dispelling that uncertainty Scottish voters may choose to stay with the more familiar versions of social democracy on offer on their home turf.
The current pleas by senior Scottish Labour figures, most recently Douglas Alexander, for Labour to regain the leadership of a Scottish agenda for change suggests that few of its Scottish activists are content to rely on the possibility of a UK-wide revival of Labour’s fortunes. But defining that Scottish agenda in ways consistent with the stability of the union is no easy task. How far is Labour willing to champion more radical versions of devolution than the Calman inspired Scotland Bill currently before Parliament? Will they support the devolution of corporation tax, of energy policy and oil taxation, of the welfare budget? Once started on this road unionists might be excused for feeling that they are out of control on Tam Dalyell’s slippery slope.
While delivering government consistently in accord with the social democratic preferences of Scottish voters provides the foundation of the left wing case for independence it offers no guarantees of a long future of progressive reforms under independence. The current limited form of devolution does not provide a serious test of Scottish social democracy’s capacity to generate serious changes to the distribution of power and wealth, least of all in the midst of financial crisis. The devolved Parliament has legislated some significant reforms of which the introduction of STV for local government and the Climate Change Act are probably the most significant and Holyrood governments have championed some progressive policies such as free social care and the defence of an integrated health service. But no Scottish political party is offering the Scottish public a developed and comprehensive programme of social democratic reform. And since the credit crunch in 2007 the most conspicuous feature of Scottish public life has been has been the absence of any ideological response to the seismic changes in Scotland’s economic and political environment, to which the apparent consensus to ignore the implications of the final disappearance of a Scottish banking system stands as inglorious testament.
So Scottish left-wingers will have to continue to be patient. Independence is unlikely to spark an instant Scottish Spring of radical reform. But it can be expected to increase the level of activity and urgency in those state and civil institutions which sustain public debate and prepare the way for change. It will sharpen the sense of Scots’ sense of responsibility for their own future. It will help them to counter the neo-liberal influence of Anglo-America with the practical progressivism of the Nordic countries. It should raise the expectations Scots have of their Governments. By raising the stakes for Scottish decision-taking it should stimulate Scottish civil society – its voluntary organisations and think tanks, its unions and Churches – to become more active in developing and promoting their various claims. It will necessarily generate debate around what sort of constitution Scotland should have, how power should be distributed between central government and parliament, local government, communities and the general public. It will encourage people to question how well Scotland is served by its institutional legacy from the UK, from its media and banks to its welfare state and Monarchy. Not least, by setting Scots the everyday challenge of running their own society independence may induce them to discard some of their more tiresome cultural tics such as agonising over whether they suffer a Crisis of Confidence condemning them to stick for ever in their same auld groove.