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  • Published in Opinion

The Scottish Parliament is defenceless against Westminster cuts - remaining in the UK would condemn Scots to low wages, falling living standards and humiliating welfare cuts argues Adam Frew

Scotland can have the best of both worlds if voters reject independence at next month’s referendum, says the Better Together campaign. The phrase has been repeated an incalculable number of times by the No campaign: a strong Scottish parliament (with more powers guaranteed) plus all the associated strength and stability of being in the United Kingdom. Sounds appealing, no?

The phrase itself is an astute campaigning strategy – it encompasses the strong desire of the Scottish electorate for greater devolution and self-determination, yet expresses the safety of the greater whole which stands behind Scotland. These words, however, are meaningless. It would take only a casual observer minutes to realise that even with the expected additional powers to be accrued to the Scottish parliament via the 2012 Scotland Act, the Scottish legislature is still a fairly powerless institution. Scotland’s parliament is unable to affect any matter on foreign affairs or defence, and has virtually zero ability to legislate on taxation and social security bar a few small, obscure areas such as landfill tax.

Conversely, if the so called strength and security purportedly provided by the UK is being viewed as a virtue by the No campaign then an explanation must be sought. The last 35 years of Westminster governments, of whatever hue, have initiated, expanded, and accelerated a neoliberal economic model of privatization, de-regulation and low-wages. Standards of living are falling, the number of food banks has exploded, the poor are getting miserably poorer whilst obscene levels of wealth are being redistributed upwards into the hands of a tiny elite at the top of society. The union provides strength and security only for the wealthy – for those who have the greatest to fear from an independent Scotland possibly breaking with the existing economic order of things – rather than for the mass of people working for poverty pay.

The best of both worlds narrative implies that the devolution settlement represents an optimal political configuration for these islands. By voting No we get to keep the utopia we have created; nothing is required to change as we already have the best. As mentioned in the afore, only a casual glance at Scotland’s social crisis tells us how laughable a contention this is. As long as a society as wealthy as Scotland’s has ever increasing levels of malnutrition, food banks and child poverty then our society is far from the best, it is far from even adequate. It is broken.

Westminster, neoliberalism & austerity

The austerity consensus has developed in a rather simple manner. The neoliberal economic model of limited state support for workers, pensioners, the unemployed and disabled is matched with enormous state support for big businesses and corporations. The 2007/8 financial crash (a consequence ultimately of ideologically-driven deregulation and debt-sustained low wages) pushed many leading financial institutions into de facto insolvency and plunged the wider financialized economy into a recession deeper and longer than anything seen since the Great Depression of the 1930s. In response to this, the UK and others nationalised much of their banking sectors to halt what would have been a series of massive bankruptcies similar to that seen with Lehman Brothers. It is important to note that there were a number of options in play here – it was not inevitable that the UK taxpayer be saddled with the losses of speculative finance. It would have been quite possible (indeed eminently reasonable) for the British government to underwrite current and savings accounts, mortgage lending and pension funds while leaving banks’ insolvent investment activities to go to the wall. Iceland refused to protect creditors in its banking sector, pushing losses onto bondholders rather than taxpayers and safeguarding the welfare system, and subsequently enjoyed a recovery much stronger than that in the UK.

Where private debt obligations were nationalised governments faced a potential problem – the same debts now on government books could pose a threat to their own ability to borrow money on international markets. There was created then an imperative to reduce the rate at which the government was borrowing money (the deficit) in order to stabilise sovereign debt. The reality and immediacy of this threat varied in different countries depending on their fiscal health, while the responses thereto depended on the political persuasions of sitting governments. Here governments faced a further choice: they could increase revenues by attempting to stimulate the economy and/or levying (and effectively collecting) taxes on the massive profits of the corporations and bankers making obscene amounts of money from upwards wealth redistribution, or; they could turn their attention to existing government expenditure and seek to substantially reduce it. The British establishment, an international flag-bearer for neoliberalism, chose the latter. Further, it unsurprisingly sought to focus attention not on such things MPs salaries or its nuclear arsenal, but on public services and the welfare state. Labour Chancellor Alistair Darling (now leader of the Better Together campaign) announced that planned cuts to public services would be “deeper and tougher” than anything achieved by Thatcher. The process of balancing the books on the backs of the poor, of nationalising corporate debt and privatising public benefit became known as ‘austerity’. The fact that many austerity measures haven’t actually reduced spending, being designed primarily to create a flexible, low-pay labour market in maximise profits rather than reduce the deficit, is important but cannot be discussed here fully.

The Labour government under Gordon Brown and the successive Tory-Liberal government which replaced it in 2010 have implemented austerity on a huge scale across public finances with 80% of budget cuts still to come into effect after the next election. Another Labour government in 2015 will not change this, Shadow Chancellor Ed Balls having affirmed his party’s support for continuing austerity. The misery created by the punitive measures implemented in welfare alone is startling. In an effort to drive down the welfare bill harsh and brutal sanctions are being dispensed among claimants, a great many of them disabled, in order to push people out of the welfare system and thereby reduce claims.

Benefit Sanctions Graph

The ever increasing number of sanctions, already rising annually under Labour, has been massively expanded under the Tory-Liberal government and is forcing hundreds of thousands to turn to food banks just to survive. The Trussell Trust, the main provider of food banks in the UK, estimates benefit sanctions and changes are the primary cause of the 400% increase in food parcels being distributed to the population.

Food Parcels Graph

Over 900,000 three-day food parcels were dispensed in the last financial year – 2.7 million days-worth of food given as charity to hungry people across the country. A truly shocking statistic in one of the richest countries in the world.

However, the spectre of food banks across the UK and other countries is not a simple symptom of benefit sanctions alone – the problem is more systemic. The neoliberal configuration of capitalism is characterised by falling wages and eroding living standards. The decline in wages has been partially offset by the liberalisation and uptake of personal debt – rising meteorically since the early 1990s –  which hid the effects of falling/stagnating wages as credit cards, overdrafts and unsecured mortgages could make up for the shortfall in wages. The contradictions of this ‘fix’ became painfully apparent in 2007/8.

Earnings Graph

Thus, the Trussell Trust’s measurement of low wages as a significant factor in claims can be better understood. Poverty pay now accounts for the second highest cause of food parcel hand-outs.

Food Bank Referrals Graph

Low wages and painful austerity does not dominate the lives of all British subjects however. On the 11th May this year the BBC reported the UK is now home to over 100 billionaires, bankers bonuses are at an all-time high, and company shareholder dividend payments continue to rise higher than before the recession. This is an economic model which massively benefits the rich of the UK and impoverishes the working poor. An economy such as ours must be fundamentally altered to serve the social needs of the majority rather than the private greed of the top 1%. Independence is an opportunity to separate Scotland from this rotten economic system implemented and maintained by successive Labour and Tory governments. An independent Scotland will by no means be elevated to a socialist utopia on the 19th of September, but it is the best chance we have to change the direction of our society. A No vote will shackle us to ever-declining standards of living and wages for generations.

A strong Scottish Parliament?

Devolution and the re-establishment of a Scottish Parliament was one of the most significant changes to the British constitution since the Act of Union. A modern parliament comprised solely of elected members under a relatively proportional system offered new levels of accessibility to a Scottish electorate geographically and politically disconnected from remote and aloof Westminster politicians. Compared with the atrophied Westminster system, representative democracy began to feel something like a concrete reality. For the Left, the Scottish Parliament represented a hopeful new political arena, while in 2003 the Scottish Socialist Party returned six MSPs.

However, the Scottish Parliament, a positive benefit to democracy and accountability, is far from the strong and powerful institution that the Better Together campaign would have you believe. Realistically, Scotland’s legislature is relatively weak compared to many other devolved or regional European counterparts. Fiscally, Holyrood’s role is limited to dispensing a pre-determined amount of public funds allocated by Westminster via the Barnet formula as it sees fit. The Scottish legislature cannot raise its own funds nor collect the existing taxation levied in Scotland. Nor can it alter fundamental aspects of people’s participation in the economy.

The narrow confines which the parliament actually operates precludes the ability for the Scottish government to halt any of the destructive social measures which the Con-Dem coalition in Westminster has introduced. This includes huge increase in benefit sanctions imposed on claimants (which as we’ve seen is primarily responsible for the enormous rise in food banks) the privatization of the Royal Mail (a process initiated by the previous UK Labour government), and the below-inflation increase in benefit payments and the minimum wage which further drives down the income of the poor. Whilst powerless to stop the vast majority of austerity measures implemented by Westminster, the Scottish government has managed to mitigate some of the more draconian cuts. The ‘bedroom tax’ was effectively ended in Scotland by diverting funds from Scotland’s block grant to local councils to replace the money withdrawn by the UK.

But if the role of the Scottish parliament is to fight a rear-guard action against Westminster-imposed austerity, eventually existing public services and provision in Scotland will have to face those same cuts as more and more funds are diverted to replace resources withdrawn from London. Indeed, with the privatization of the NHS in England now gaining steam, within five years Scotland’s NHS could face the same fate as a reduction in public spending in England automatically reduces the level of block grant Westminster allocates Scotland via the Barnet Formula. Put simply, if the privatization of the NHS in England (again, a process initiated by the UK Labour Party via Foundation Hospitals) results in private insurance schemes replacing state spending then we should expect a commensurate reduction in Scotland’s allocated funding. Cuts and privatizations would follow here.

A real parliament to end austerity

In order to make a meaningful change from the existing neoliberal economic model being pursued at Westminster there must be stark changes. There are alternative social and economic policies which could be pursued to allow the majority of working people to benefit from the wealth that they create:

  • Increase the minimum wage to the level of the living wage which would allow a full time worker to comfortably live on a basic income
  • End benefit sanctions and expand welfare provision
  • Raise the state pension and Job Seekers Allowance to at least the level required under the European Social Charter

These are just a few of the vital, yet basic, changes that could be pursued to increase the quality of life and standard of living for the vast majority of people in Scotland. Unfortunately our parliament has absolutely no ability to legislate on any of these matter, and nor are there any plans to allow it to do so. In a further article I will explain the emptiness of the unionists ‘more powers guaranteed’ promise.

Adam Frew

Adam Frew

Adam Frew is a renewable energy design engineer, a Radical Independence activist and a member of the International Socialist Group based in the South side of Glasgow

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