'Scotland's Disgrace' - a big idea which ground to a halt because of a
lack of subscribers. Could the 'yes' campaign for Scottish independence
go the same way?
Austerity Britain - should 'yes' be politically exploiting Britain's crises?
Across Britain austerity is driving hundreds of thousands into poverty, the Red Cross is gearing up to feed Britain's starving and Westminster debt continues to rise uncontrollably. Yet the 'yes' camp is struggling to gain any traction in the polls. Why? Could part of the answer be the SNP's fear of currency independence?
This week The Independent newspaper revealed that for the first time since the World War II the Red Cross - which normally operates in disaster zones - will mobilise across Britain. The aim is to have volunteers collect food hand-outs at supermarkets and distribute the food among Britain's increasingly desperate and rising number of hungry families.
In May this year, we found out that over half-a-million people across the UK were being referred to food banks as joblessness and austerity grips the land and zero-hours contracts turn Britain once again into a low-wage Victorian-style society.
In political terms this news really should be dynamite for the pro-independence campaign.
Statistics about Scotland's economy and society regularly deployed in relation to what an independent Scotland might look like - the Nationalists point to them and say an independent future looks rosy and the Unionists argue they show impending doom and uncertainty should Scots vote 'yes'.
We hear little about what uncertainties there are should Scots stick with Westminster rule.
Catalonia, Caledonia and catatonia
In next September's referendum there is a choice between two constitutional futures, however the matter of what the future looks like for Scots should they decide to finally endorse the Union is apparently irrelevant if you listen to the debate and follow the news.
It is not difficult to construct a case that the future inside the Union is economically, socially and politically precarious.
British citizens are being spied on by the UK government and the US for that matter, recent revelations have shown; The current government is threatening to leave Europol which is critical for the safety of citizens from organised crime; Industrial output was down in August despite the latest round of claims by the ‘recovery industry’ that the economy is ‘fragile’ but on the mend. Britain's public assets are being sold off to fund the broke treasury; Spending on government debt interest payments alone exceed spending on defence and by 2018 will surpass spending on education according to official ONS figures. After years in office UK government debt - which Chancellor Osborne promised would be reversing - is climbing rapidly. The taxpayer is currently offering guarantees in order to hold up the housing market while austerity cuts drive a rapidly growing number of Britain's poor into begging for food to feed their hungry kids.
The 'yes' camp could and some might argue should be converting this picture of a society in shock and an economy in rapid decline into 'yes' votes in droves but they are not. Why not?
If the SNP and Yes Scotland needed a template of how to ignite an independence campaign they need only look to Catalonia.
2 million people recently joined arms around the coast of Catalonia to show the world the Via Catalana cap a la Independència 'Catalan Way to independence'. By contrast the recent pro-independence march on Edinburgh's Carlton Hill with under 20,000 people in attendance disappointed many nationalists.
The Catalonia phenomenon was recently rationalised away by Yes Scotland executive member Pat Kane. Scotland has always done things quietly and in a gentleman-like fashion he argues. What about the story of the tanks rolling into George Square in 1919 as the British state was scared stiff of a workers' uprising? Was that gentlemanly? What about the demonstrations against the poll tax and the mass demonstrations against the Iraq War? Were they quiet?
Pat offered another reason for Catalonia's mass sovereignty movement which is not that dissimilar to what Lord George Robertson recently argued - the Catalans have languages and Scotland doesn't. Last I heard those speaking primarily in Scots in Scotland accounted for 1.5 million people. But let's not get into the cultural areas of the self-determination debate - it is after all merely a 'car boot sale' or so some would have us believe.
Catalonia's language issues have been around for some time and are important to Catalan identity. However if you want to know what is feeding the current phenomenon of Catalans demanding their own referendum on independence defer to the Clinton doctrine: ‘It’s the economy stupid’.
Spain's youth unemployment is around 60 percent and Catalans are angry with Madrid. Like Scotland, Catalonia contributes to the national coffers more than it gets back and so the masses of poor and unemployed are demanding independence in order to help secure their futures.
Spain, to many Catalans, is a failing state and an increasing number want out and are prepared to agitate in their millions to achieve that objective.
In Scotland the SNP barely acknowledges the social and economic crises in Britain. Why not?
You do catch whiffs of it. Gordon MacIntyre-Kemp's Business for Scotland pro-independence organisation tours Scotland and lectures Scots’ businesses telling them that without Scotland and its oil the British pound would collapse. This scary line is also taken by the SNP's Stewart Hosie MP and others.
The logic goes that the UK is so close to currency collapse that Scotland needs to keep using that currency to help stop it from collapsing. Our economy is interwoven and so we would also be hurt if the pound collapses and the English economy suffers. What we are supposed to make of this line of reasoning is that the rest of Britain will want Scotland to retain the pound post-independence because its very survival depends on Scotland keeping sterling so don't worry - we can and will have the pound despite what those fabricating Unionists tell us.
The problem with this 'case' is, as anyone with an ounce of economic sense will spot, that it offers a supremely ugly scenario to the Scottish electorate. If the pound is so perilously close to collapse - as the SNP argues - why in heaven's name should Scotland risk economic oblivion when we could have the relative economic security that currency independence would offer?
No-one wants to see England's economy nose-dive and many Scottish jobs are dependent on economic ties with England but if it does nose-dive then with currency independence you have a hedge against such a calamity: Scotland will have a population share of the current UK - over £100bn - debt carried over after independence and that will be owed by the new Scottish state. If the pound does collapse, as Hosie and MacIntyre-Kemp argue is inevitable, then it will be cheaper to pay that sterling debt off using the stronger Scottish currency thus offsetting any loss of trade from England's contracted economy. Should Scotland stay in sterling and it crashes there will be no hedge against a drop in trade and no protection against currency collapse within Scotland. If you accept that sterling is in such a weak state, and there are plenty experts arguing just that, then keeping it is clearly the worst possible strategy. In terms of risk assessment, it would be an monumental misjudgement.
Pro-independence figures who want to consider currency independence include Yes Scotland chairman and chief executive Dennis Canavan and Blair Jenkins. Apart from the SNP there are two other parties backing a 'yes' vote - the Greens and the Socialists - both of which back currency independence. The Jimmy Reid Foundation has produced reports backing a Scottish currency, SNP economist George Kerevan has urged a party rethink on the SNP’s policy on sterling and former SNP figures Gordon Wilson and Jim Sillars have argued for monetary independence. The list goes on.
Europe, focus groups and leadership
There is a cliché within the SNP that the party is 'New Labour with a soul' where every policy is 'road-tested'. The focus groups tell the SNP that an independent currency is an unpopular idea. Do leaderships only follow public opinion or are they often required to shape it?
Keeping the pound may prove popular in focus groups and opinion polls now but in the searing heat of the independence campaign experts will expose any weaknesses in that policy and once blood is drawn the entire 'yes' campaign could unravel along with it.
If you want to know what political independence in a currency union looks like there is an obvious template. You can bet your bottom groat that the Ireland, Spain, Portugal, Italy and Greece examples - all in the eurozone union and all suffering social, political and economic meltdown - will be trailed out again and again and again during the referendum campaign. If you thought the pro-Union case was about spreading uncertainty, wait until the SNP's sterling-zone policy is set against the eurozone experience when the referendum campaign intensity picks up. You ain’t seen nothing yet.
The eurozone is moving towards a centrally-controlled tax regime or a United States of Europe. Tax harmonisation in a currency union is necessary as the Euro experiment shows - that is now the common wisdom across the EU. The SNP argument is that independence - as they propose it - equates to tax independence which is needed for Scots to prosper. However the truth is that Scotland won't have tax independence. The eurozone example will be relentlessly waived in Nationalist faces and used as the obvious example as to why the SNP policy doesn't stack up. Imagine if Greece defaults between now and September next year? Or imagine if Spain needs a bailout? Or if the Portuguese renegue on their debt?
Remember when Ireland needed a bailout and BBC Scotland, not known for its international coverage, became BBC Ireland for a week? Better Together will be all over any eurozone currency problem and there are a multiplicity of them and each and every news item about coalitions failing or troika negotiations with member states will dominate the Scottish debate and press coverage. The expression 'hostage to fortune' doesn’t even come close.
What really exposes the SNP's weakness in this debate is that its sterling policy is wrapped up in the saltire. It's "our pound" and no-one has the right to take it away from us we repeatedly hear.
Pressing Scotland's victimhood button might get 'yes' adherents indignant whipped up into something akin to Obamania but blind adherence to a weak case will only create an intolerant atmosphere and drive the vast majority of reasonable voters away from an increasingly sectarian debate, recoiling from a poisonous atmosphere characterised by inferences of treason and skulduggery. Is this really a robust leadership strategy?
And then there are rumours that any dissent over the pound policy is being silenced..
Meet the new boss, same as the old boss
In reality, the British parliament is also Scotland's yet the SNP want to take that away from Scots so where is the consistency in this argument? The argument for independence is not about ownership of institutions but democratic control. Scotland will have as much influence over the Bank of England as it has exerted over Westminster, and probably less so. SNP figures know this yet still seek to portray the issue as a patriotic one about institutional ownership. Will this tactic survive the referendum campaign in tact?
In his recent debate with Lord George Robertson the SNP's Stewart Hosie - party spokesperson on the Treasury and Economic matters and a very passionate and capable orator - misrepresented the situation.
Firstly, he perpetuated the myth that the Bank of England is 'independent'. The governor of the Bank of England is chosen by the UK government and the institution itself is a creature of Westminster statute. It is not independent by any stretch of the imagination.
By describing the Bank of England as independent, Mr Hosie seeks to convince us that Scotland's economy will not be politically controlled from Westminster in terms of the most important economic powers a nation has - monetary (control over the people's money).
Currently, interest rates and the size of the money supply are undoubtedly determined according to the best interests of the City of London and the South East of England. If Scotland keeps the pound that will not change one iota. If anything Westminster, the City and the Bank of England would be compelled to adopt a predatory policy towards Scotland and so economic decisions could deliberately damage the Scottish economy through London’s self-interest and that would be justifiable and expected.
Hosie also claimed that the Bank of England's remit is meeting an inflation target of 2 percent. Mr Hosie, who sits on the Commons Treasury Select Committee, knows fine well that the Bank of England has kept interest rates down despite inflation being above its 2 percent target. He is also fully aware that the new governor, Mark Carney, has changed the central bank's remit to target employment figures.
By focusing on the inflation target Mr Hosie wants us to believe that the Bank of England would not be a threat to Scotland's interests - that somehow Britain's central bank will have a benevolent, largely neutral impact on Scotland's economy. Ask the young female Greek students who, to feed themselves, are turning 5 euro tricks in the commercial district of Athens what they think of the European Central Bank!
So, yes - in the heat of the referendum debate the SNP's case against currency independence and for retaining the pound will come under increasing scrutiny and it will be vulnerable.
Scottish cringe and self-determination
However the real impact which the SNP's pound policy will have on the 'yes' side is much broader for it cannot politically capitalise on the economic and social crises in Britain. Why?
Should the SNP argue that the British state - the way the Catalans argue about Spain - is failing and that there is a very real and increasing risk of deepening currency and economic crises then the party's policy on keeping the pound would look nonsensical.
Why if the pound faces further devaluation and Britain risks a default, rising interest rates, bond market collapse, asset deflation and rapid price inflation would you want to keep the pound and go down with the Titanic? That would be the obvious question voters will ask and 'yes' proponents will be cornered peering into the headlights like the proverbial rabbit.
This is how that key campaign advantage - being ruthlessly exploited by the Catalan nationalists to the great advantage of their independence campaign and which is bringing millions out on to the streets of Barcelona - is being denied to the 'yes' camp.
Blind-sided by focus groups and the intellectually narrow approach to viewing the currency issue in isolation, the SNP is denying itself the capability of drawing attention to the potentially bleak future Scots might face remaining inside the Union.
And will it not seem bizarre to future generations if the Nationalists lose the independence referendum because they did not adopt the policy of currency independence?
And so we come to the issue of leadership. There is a well-known lack of self-confidence among Scots. We don't say "aye" on tv, many of us think we have no culture or languages and we believe looking after our own economic self-interest is selfish rather than responsible.
The 'Scottish cringe' has numerous causes and manifestations. It may well be that we just can't take ourselves seriously enough to imagine having our own currency. A currency is for adults, for nations with a language and culture, for cultures with real economies – no us.
Lord Robertson was right in his recent debate with Hosie - currency is a fundamental issue. It is one that Nationalists could use to inspire self-confidence among Scots and spread the message and attitude of self-determination and sovereignty of the people.
It may well be that the SNP leadership believes their sterling policy stacks up however it appears from afar that either the Nationalists themselves lack that self-confidence and the Scottish 'cringe' permeates their policy-making or that they believe that their fellow Scots are too feart to handle a debate on currency independence.
Options, U-turns and regulation
Is there a lesson that Catalan nationalists can teach their Scottish counterparts?
The Catalans are contextualising independence as an alternative to their narrative of a bleak reality and future under Madrid rule. The strategy is paying off in its hundreds of thousands while Scotland's 'yes' campaigners look on enviously with a sense of surrealism derived from a combination of optimistic leadership rhetoric and a clear lack of national momentum behind their cause.
Could the SNP change course? Setting up a commission which sets out a plan for a rapid transition to a separate currency is one option. A panel examining contingency plans for a parallel currency is another.
The political advantage of a 'transitional currency policy' for the SNP would be that 'yes' campaigners could argue for currency independence, continuity and managed transition allowing for the mitigation of risk all at once. The entire pro-independence community would be united generating campaign momentum around a radical vision many voices are calling for.
It would be a credible and radical narrative and Norway's independent currency, underpinned by its oil resources, would be the perfect example of the final destination. The European example of a troubled currency union would be irrelevant.
Aside from the straightforward economic case there is also the matter of democracy and regulation. In recent years, British banks have systematically designed fraudulent practices which has given the world austerity and economic shock. Internationally, British banks have been fined for Libor-rigging, anti-trust practices, money-laundering for rogue states and drug cartels and so on and there is evidence that much of this is still going on.
Yet, in order to lend credibility to the SNP's pound policy Finance Secretary John Swinney has described the UK’s system of financial regulation as "a solid framework".
The recent independence demonstration on Edinburgh's Calton Hill took place against the backdrop of the unfinished National Monument of Scotland. It is known as 'Scotland's Disgrace' and it seemed somewhat apt for the occasion - a grand idea which, owing to a lack of subscribers, ground to a halt.
If the 'yes' campaign wants to build momentum and take the campaign initiative it may require to have faith in the gumption of its fellow Scots and follow the 'Catalan Way to independence'.
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