Plan A or Plan B spell misery for Scots

Currency unions between sovereign states are a dangerous business for ordinary people as Greeks under the hammer of Troika-imposed austerity will confirm. Or Italians, whose grand coalition of all the parties is systematically destroying living standards and pensions in the name of the euro. Or Spanish people living in poverty as unemployment climbs above 26%.

So when Bank of England governor Mark Carney, addressing business people in Edinburgh yesterday, stressed the dangers of a currency union that doesn't impose shared fiscal policies on all its members he was only stating the obvious. But at least he was bluntly honest.

 "The euro area is now beginning to rectify its institutional shortcomings, but further, very significant steps must be taken to expand the sharing of risks and pooling of fiscal resources. In short, a durable, successful currency union requires some ceding of national sovereignty," he said before delivering his real message.

Carney then confirmed that if this year's referendum vote goes in favour of independence, the   Treasury in London will want a major say in Scotland's tax and spend plans before it agrees to any sterling currency union.

As a Treasury spokesman explained: "Governor Carney today highlights the principled difficulties of entering a currency union: losing national sovereignty, practical risks of financial instability and having to provide fiscal support to bail out another country. This is why the UK government have consistently said that, in the event of independence, a currency union is highly unlikely to be agreed. The Scottish government needs a Plan B."

Scotland’s first minister Alex Salmond’s response is that he does indeed have a plan B. It is to simply go on using the pound without any currency union agreement – a kind of self-supporting Scottish pound. So we are talking about a globally tradable currency, with no reserves behind it, in a country where the banks are amongst the ropiest on earth - what a recipe for disaster!

The 2008 bailout of RBS cost the taxpayers £45.2 billion. Scotland's annual output is just £216bn. At present, RBS has loans and investments of £1.3 trillion, equivalent to more than six times that. It also has £36bn of toxic loans in its “bad bank account” and faces fines for wrongdoing that could be as much as £1 trillion. And we haven't even mentioned the Bank of Scotland, which posted an £8bn loss last year. What price would Scotland's population have to pay to bail that lot out?

The economic choices for ordinary Scots are not looking good, either way. Inside the union it's austerity for generations and misery for the poorest. In an independent capitalist Scotland the choice is either a currency union where key decisions on spending are still imposed by the   Treasury or a level of fiscal uncertainty as a new currency tries to find its feet in a market that is descending into turmoil. Just look at what happened to the Turkish, South African and other currencies this week.

But there is another way to resolve the currency question and the political and economic issues too. We need to move away from a nationalist agenda for a capitalist Scotland to one where we have a say on what kind democracy, what kind of constitution, what kind of economy, what kind of currency ordinary people want.

With that as the focus of a campaign for a “Yes” vote, we could turn the referendum away from narrow nationalism into a debate about what real self-determination means. The message should go out loud and clear: we don’t want the rule of the banks and corporations wherever we live or a political system that leaves the elites firmly in control.

And that would undoubtedly inspire people in England, Wales and the north of Ireland to find their own route to challenging and defeating the power of the common enemy.

Penny Cole

Getting beyond dead end parliamentary politics

Positioning yourself to the left of One Nation Labour, as it now prefers to be known, is an easy enough task. Building a new party that can mount a successful electoral challenge to Ed Miliband’s austerity-lite “responsible capitalism” crew is more fraught.

Left Unity, launched at a weekend conference, has set out along a parliamentary road which many others continue to tramp. It’s a crowded space that already includes the Trade Unionist and Socialist Coalition, Respect and the Socialist Labour Party.

An initiative launched by former members of Respect, leading ex-members of the Socialist Workers Party and other organisations, with film director Ken Loach, Left Unity has expressed the desire for a change and a way out of a political logjam.

The impasse is not, however, simply the result of the convergence of the three mainstream parties around the imperatives of the capitalist market economy, which stubbornly remains in recession. The blockage is also a constitutional one, with the parliamentary state a clear obstacle to further social progress.

Disengagement, dissatisfaction, distaste, despair, disgust – they all express the degree to which a majority of new generations and a substantial minority of older people have switched off from the present political process. You can’t say it often enough but that’s why Russell Brand’s tirade against the system has had 10 million views on YouTube.

Although couched in negative terms, these sentiments present an historic opportunity to advocate a revolutionary political roadmap. It’s a moment to put forward new forms of real democracy, participatory and direct, that go beyond the compromised representative system and to debate how we get from A to B.

Left Unity, unfortunately, passed up that chance. A clear majority favoured a “broad left”, non-revolutionary approach that sidelines the vital issue of the state and political democracy. The new party hopes, instead, to capture votes from disillusioned Labour supporters at the next election. Some even see the party as a the “left’s Ukip” in its potential to win votes from the disaffected.

This is a fundamental misjudgement of where we are today. Instead of reinforcing the parliamentary status quo by proposing a “left” version of what we have already, this is a historic opportunity to put forward alternatives for a different relationship of state to people. That means a different kind of state altogether. Not of voters who have no power – a democracy in name only – but where people can determine their own futures within a new constitutional settlement.

In Scotland, the constitutional issue has come to the fore as a result of the independence campaign, which Steve Freeman pointed out in moving his Republican Socialist platform. A movement has emerged around the referendum which is faced with what kind of constitution Scotland should have if it is to achieve an independence which is anything more than a transfer of power to another elite.

Throughout Europe, the capitalist state has enforced austerity, sometimes relying on the International Monetary Fund and the European Central Bank to browbeat elected governments. Repeated general strikes in Greece and elsewhere have failed to dent this arrangement. Coalitions of the left like Syrizia in Greece (which Left Unity sees as an example to follow) have failed to distinguish themselves .

The plain fact is that support for all political parties is plummeting, partly because they are identified with the status quo. Increasing numbers clearly feel that the existing parliamentary parties have little relevance to the realities of their life and that voting will not change things.

This has created a crisis of legitimacy for the existing political structures and therefore for the state itself. That process was behind the formation of the Occupy and movements in Spain, Brazil, Turkey and the Arab Spring itself.

The major challenge for all of us, not just Left Unity, is to deepen our understanding of where we are in history, analysing the diverse impacts of corporate-driven globalisation on politics, the economy and the eco-system and demonstrating how a return to the Labour of 1945 is impossible.

We have an obligation to put forward comprehensive alternatives whose content is a transition beyond capitalism. Thinking about and working on what kind of democratic, networked organisations are needed to reflect these aspirations and support their achievement is where we should direct our energy.

Corinna Lotz and Paul Feldman

Osborne defends sovereignty of banks not UK citizens

The Treasury is trying to frighten Scots out of voting “Yes” in the 2014 referendum on independence over the question of what a currency union based on the pound would mean. But George Osborne is hardly in any position to lecture others.

Osborne and his crypto-Tory pal Danny Alexander, still nominally a LibDem, are promoting the virtues of a report written by civil servants and academics. The report claims that the “current currency and monetary policy arrangements within the UK serve Scotland well”.

In fact, it is described as “one of the most successful monetary, fiscal and political unions in history”. Leaving aside this sensational claim to a unique place in world history, the sting is in the tail.

The report claims the SNP's preferred option of continuing to use the pound sterling might be rejected by the rest of the UK because it could expose the larger neighbour to risk if Scotland ran into fiscal and financial difficulties.

It concludes that even if a deal could be reached, it would have to include arrangements for Scottish ministers to hand their annual budgets over to Westminster for approval even before they had been voted on at Holyrood.

And it admits that would run both ways, with Scotland wanting some say over British fiscal policy. Bu Con/Dem chancellor Osborne is having none of that. He told an audience of Scottish business people:

"The fundamental political question this analysis provokes is this - why would 58 million citizens give away some of their sovereignty over monetary and potentially other economic policy to five million people in another state?

“Before the rest of the UK could ever agree to enter a formal currency union, any future UK chancellor of the exchequer tied to independence would have to provide the British people with a clear and compelling answer to this question.”

Well maybe the compelling question he should actually answer is, what control do the citizens of any country have over their currency? The answer is, absolutely none. It is outrageous for Osborne of all people to masquerade as the defender of the sovereignty of the citizens of the UK.

The financial sector he serves has created a level of debt that is so uncontrollable that even the global corporations are terrified about the future. The 50% collapse in Tesco pre-tax profits, and bankruptcies in retail are the front end of a collapse in manufacturing that will bring even more downward pressure on wages and working conditions.

And what do governments of nation states, like Britain, mired in an eternal and deepening global crisis do to defend their citizens? Well we know the answer to that. They have so little real control over the economy that they are basically reduced to just two possible actions.

One is to slash public spending in order to try to reduce the deficit. And the other is to print money, introducing liquidity into the economy but at the same time undermining the long-term value of the currency overall.

The real attack on the pound has come from Treasury-authorised quantitative easing in a desperate attempt to shore up the banks. The result is that the majority of us exist every day within a hostile economic and fiscal environment that offers us no security and no control whatsoever.

The real sovereignty question is why do 90% of the people hand control over currency, their public services and their social, political and environmental future to governments who operate on behalf of the minority who stand to gain from the current arrangements? What kind of independence and self-determination do we really have, north or south of the border? To ask the question is to answer it.

This whole independence debate is, not surprisingly, bringing to the fore burning political and economic questions. Neither Osborne nor Scotland’s first minister Alex Salmond have any answers outside of the failed policies they are already pursuing.

Penny Cole

Scottish independence is not a question of 'empathy', Mr Salmond

Scotland's SNP first minister Alex Salmond is basing his plans for the country's future on the ideas of Scottish Enlightenment thinker Adam Smith. He told an American audience he would be looking to both of Smith's great works - not only The Wealth of Nations but also the less well-known Moral Sentiments.

In this, Smith notes that there is something in human nature that makes us care about others, feeling what they feel not in our senses, but in our imaginations. This "empathy" is, apparently what David Cameron lacks and what Salmond has.

Yeh, right, that's what they all say! Here's Cameron speaking in 2010: “There’s something else you need to know about me which is that I believe the test of a good and strong society is how we look after the most vulnerable, the most frail and the poorest. That’s true in good times, but it’s even more true in difficult times.”

But as we all know, when financial crisis push comes to shove, the needs of capital win out every time. That’s why we are enduring austerity-plus from the ConDem coalition. The only sense of us all being it together is the fact that most Europeans are suffering the same pain.

A recent leaked Scottish government paper showed growing concerns in Edinburgh about oil revenues and public spending projections. Under such pressures would empathy trump the interests of global capitalism, whether in an independent Scotland or not? No way.

Empathy is not some national quality shared by all Scots regardless of their class or politics. If it were, some of the most miserable conditions in any advanced capitalist state would not have been created and tolerated for so long!

The House of Lords economic committee this week called on both the Westminster and Scottish governments to publish detailed studies of what would happen to the Scottish economy in light of a “Yes” vote. In that way voters could consider the implications fully.

But neither Westminster nor Holyrood will do this, for two reasons. First, they are both of them incapable of producing a document that is not riddled with propaganda for their side of the independence argument. And second, neither of them have the least idea of what is going to happen to the economy in the short, medium or long term - not in Scotland or anywhere else in the UK.

They are aboard a floundering ship which they claim to be piloting but that is actually controlled by a phantom crew nobody dares name. These are not supernatural forces, but the invisible forces of corporate debt, junk bond investments and financial instruments whose real value, or lack of it, nobody can pinpoint.

The wreck is imminent in a fresh banking crisis on the horizon. What price empathy when that happens?

We no longer live in a welfare state, but in a market state where the private sector delivers public services for profit. This is just as true in Scotland with its "arms length bodies" with big budgets, big fat salaries for councillor/directors and big fat pay offs for executives.

A Scottish government operating the existing capitalist state form would neither change nor challenge this status quo. We live in a state where benefits can be cut, removed or changed - not because people's needs have changed but because capitalism's crisis has deepened, and this would remain the same in an independent capitalist Scotland.

Of course we must defend all benefits and public spending but we must not stop there.

The independence referendum gives us a chance to debate and decide on a very different kind of society. People’s Assemblies could come together in every part of Scotland to draft a revolutionary new constitution.

That would aim to transfers power from the ruling elite to the people alongside measures to achieve economic democracy through new forms of common ownership of the corporations and banks. That is the real essence of self-determination for the 21^st century.

A campaign for a “Yes” vote that is not based on fighting for that kind of transformation, is simply leaving the ship in the hands of the wreckers whilst painting a big Scottish flag on the side.

Penny Cole

Scots need a people's constitution, not an SNP one

The deal struck between Edinburgh and Westminster to hold a single question referendum on independence in the autumn of 2014 should not obscure the fact that the needs of ordinary Scots are secondary to this political manoeuvring.

Even though it seems most Scots would like to have the option of greater devolution as an alternative to independence, this will not be on the ballot paper.  The Tories, who have no support whatsoever in Scotland, want the electorate to face a stark choice – “in or out”. Labour supports that position.

The big three parties are united on the need for a strong, united British state –  not for the benefit of the people, but as part of feverish attempts to hold the crumbling economy together.

The big question facing people in Scotland is not “do we want independence from England” (a completely inaccurate and historically wrong formulation) but what  kind of society do we want? What kind of economy, what kind of politics, what kind of life for the people? And these are the same questions that face people everywhere, in this unprecedented economic and ecological crisis.

None of these questions will be on the ballot paper, nor raised by Scottish National Party. The SNP makes the right to self-determination of the Scottish people synonymous with a crude nationalism that masks its reactionary policies.

The referendum campaign presents a massive opportunity to build something genuinely new and independent and we should not let it pass us by. We should refuse to spend two years as onlookers as they haggle over a constitutional settlement that will still put the needs of the corporations above the needs of the majority.

The argument put forward by some on the “left”, that if we get independence within the framework set out by Salmond and Cameron, that will somehow strengthen the power of the people for the future is unbelievable.

How would a Holyrood Parliament organised on the same lines as its counterparts in Spain, Portugal, Greece and Ireland save us? And if an independent Scotland is still using the pound, as SNP leader Alex Salmond says it would, then the Westminster Treasury would still call the shots on spending, interest rates and borrowing.

For the next two years the SNP government and local councils of all stripes will go on cutting health, education and the voluntary and community sector. They will destroy further education colleges and oversee rising youth unemployment and destitution for families.

Whatever their disagreements over independence, all the parties agree there is no alternative to this. Labour in Scotland wants to remove universal benefits not enjoyed elsewhere in the UK right now. The SNP wants to keep them as a kind of bribe.

But for independent thinkers, the question is why are these benefits not rights? Why do people not have the right to work, to adequate food, to a home, in our rich country? Why are these subject to degrading rules, and dependent on whether capitalism decides to afford them or not?

If we are really talking about an independent future, let’s plan for a society where dependence on benefits is eliminated, where everybody participates and in return receives a share of the collective wealth that is enough to live well.

Salmond’s top priority for a post-independence constitution is keeping Scotland in NATO. We should develop a constitution that rejects NATO and its corporate-sponsored wars.

All Scotland’s politicians and businessmen want the corporations to drill for oil in deep water off our coast, and they support more open cast mining. We should demand an end to fossil fuel burning and a rapid transition to renewables. Let’s plan to place all land and sea in Scotland into a new commons, where it can be used for the benefit of all.

Those who want to bring about such real, fundamental changes should get together and write a people’s constitution. Then we can support and promote local initiatives that build into a network of democratic People’s Assemblies – in Scotland and beyond – striving for real political change. That would give real meaning and a modern content to the right to self-determination.

Penny Cole

Wanted: a democratic alternative to Merkel and Cameron

The choice between living in a European so-called “super state”, as advocated by German chancellor Angela Merkel, or an independent, “sovereign” state, as viewed by prime minister David Cameron is, in reality, no choice at all.

            

Merkel is in no position to enforce a complete political and economic integration of the 17 countries that make up the ill-fated eurozone, let alone the entire European Union. And Cameron is simply playing the nationalist card when he says his government will always put “British interests” first.

The driving force behind the comments made by Merkel and Cameron in Berlin yesterday is an economic crisis that has swung wildly out of control, gathering a momentum that overwhelms conventional politics as well as underming the European Union project itself.

Launching the euro in 1999 was viewed as a step towards the harmonisation of the European economy. Within a few years, it became the world’s second largest reserve currency after the dollar. Now it is on its back, brought down by debt mountains across the continent.

But Merkel is mistaken if she thinks that total integration of fiscal and monetary policy under a single European state would save the euro and/or prevent this from happening again. Leaving aside the political impossibility of her ambition, the real problem lies in the cause of the crisis itself.

Debt, as we have pointed out many times, is actually the product of far deeper problems inherent within the capitalist system, and not the source of the global crisis. The amassing of household, corporate and government debt was necessary to fund and fuel the expansion of the economy in the period of intense globalisation.

When consumers were maxed out on credit and the economy began to slow in the earlier part of this century, the banks were caught holding worthless, so-called toxic assets. They stopped lending, several went under and the world was plunged into recession. Tax revenues fell and sovereign debt soared.

The contraction is deepening. Italy’s industrial output fell a staggering 9.2% in April, it was revealed today. Spain is bankrupt and is reported to be planning to formally ask for an EU bail-out over the weekend. China’s economy has slowed rapidly, dashing the hopes of those who thought it would take up the slack.

Under these conditions, integrating the EU states into a single entity – even if this were a realistic possibility – is meaningless because the problem lies within the nature of the capitalist system itself, not political will. Naturally, neither Merkel nor Cameron can or will address this as they are ruling class politicians who endorse the status quo of globalised capitalism.

A European capitalist “super state” is an ugly and dangerous concept, as World War II demonstrated in practice. British nationalism is an equally nasty prospect, whether it is in the hands of Cameron, UKIP or the Labour leader Ed Miliband, whose reactionary speech on Scottish independence yesterday left him wrapped in the flag of St George.

There is an alternative, however. An equal partnership, even a federation, of European states committed to a joint, sustainable future is possible as well as necessary. That has to be driven by the aspirations of ordinary people themselves and not the ruling elites.

If it is made part of a project to liberate ourselves from the grip of corporations and banks, a democratically-run Europe is worth struggling for.

Paul Feldman

Communications editor 

Self-determination for Scotland has to end minority rule as well

It is hardly surprising that Scots hate rule from Westminster - they are not alone. Millions of workers all across the UK have come hate the ConDems Coalition for imposing the full burden of the economic crisis on their backs.

Whatever question is on the ballot paper for Scotland’s proposed referendum, there will be none that will bring about independence from cuts, closures, poverty, capitalism and the banks.

It will simply give people in Scotland the chance to swap rule of the 1% based at Westminster for the 1% based in Edinburgh. Or rather, continuing rule by the global corporations that rule everywhere, supported by their cohorts in the Scottish banks, the oil industry and the landowning, shareholding, political elite.

We will be asked to vote out the sham UK democracy and replace it with a sham Scottish democracy that will provide self-determination for an elite only.

The reality is that as a small economy, Scotland’s fate would be decided by global events and the decisions of the major capitalist states. This is the experience of Greece, Hungary, Iceland and Ireland among others.

It has been the experience of devolution, which has been unable to insulate Scots from the ravages of the global financial and economic crisis. One in three children in half of all local authority areas live in poverty, one in two in Glasgow. Unemployment is once again higher in Scotland than in the rest of the UK, and youth unemployment stands at 25%.

Further Education colleges face unprecedented cuts and an unwanted and badly-planned restructuring. The infrastructure of both Edinburgh and Glasgow is crumbling. Both cities’ councils are riven by scandals, waste and a ruthless determination to ignore the views of the people.

It is just crude nationalism to talk about being “free from England”. Who do we want to be free from? The tenacious battlers who continue to occupy at St Paul’s? The electricians striking across the UK to prevent the destruction of their wages and working conditions? The disabled people and their supporters fighting cruel cuts in benefits? Do Strathclyde Police have a kid glove where the Metropolitan Police have an iron fist?

There is not one England any more than there is one Scotland.

From Labour we get a kind of greater British nationalism, a support for the union that has more to do with the big fat prize of Westminster government jobs than any principles. It certainly has nothing to do with defending the unity of the British working class and trade unions.

Labour can only win at Westminster with Scottish votes, and Ed Miliband makes clear they would use those votes to continue with cuts and attacks on living standards. It is no wonder that Scots have come to detest Labour almost as much as they detest the Tories, and the SNP under Alex Salmond has benefited from that.

Cameron’s “defence of the union” is equally self, or rather power-seeking. Ditching Scotland might ensure a permanent Tory majority in England. That’s why they want just one question - independence, yes or no - on the referendum ballot paper.

And as a result, Cameron sets out to deny Scots the right to vote for a greater degree of devolution, even although polls suggest that is what they would prefer and even although people in Wales had a referendum on this in March 2011.

If it comes to a referendum, A World to Win will support the right of the Scottish people to self-determination but will campaign for real liberation from the likes of Salmond, the banks, landowners and the Scottish ruling elites.

What we need is to form People’s Assemblies all over Scotland now, to create the basis for a truly profound shift in decision-making, authority and ownership - directly to the people. We can’t vote for a revolutionary form of independence, that combines self-determination with an end to minority capitalist rule. They won’t put that question on the ballot paper. So we will have to put it on the agenda ourselves.

Penny Cole

Scots political elite united - against working people

As the political élite in Scotland focus on wrangling over future of the union with England, they are united on one thing - the need to impose the full burden of the crisis on people already struggling with low pay, part-time work and fuel poverty.

Scotland’s local authorities have now agreed to impose a public sector pay freeze, a freeze on council tax and an agenda of cuts and privatisation, in pursuit of what Scottish National Party (SNP) finance minister John Swinney calls a “relentless pursuit of efficiency”.

His budget means annual spending will fall by 11.3% per year by 2014-15. A council tax freeze will benefit those living in the most expensive homes whilst leading to cuts in service for the many thousands living on the margins. Another year’s pay freeze for many public sector workers will mean a real terms cut as fuel and food prices soar.

The SNP is transferring money out of revenue budgets into capital spending by measures like forcing further education colleges, the police and fire service to merge and in the case of further education, to make massive cuts. The resulting capital projects will create little more than short-term, sub-contracted jobs without making any real economic improvements because they will not add anything to real demand in the economy, or long-term, stable employment.

What it will do is lead to more job losses, and particularly for women who work in education, the NHS and voluntary sector organisations contracted to deliver welfare services. Scotland already has a deficit of 17.25% in full-time jobs. Many women survive by working two and even three part-time jobs, and that is becoming more and more common.

The SNP blames the cuts on the Westminster coalition, but if that is true, why don’t they go straight for an independence referendum and get Scotland out of Cameron/Clegg’s clutches? It’s not only because they fear they might not win the vote. It’s also because Alex Salmond, a capitalist economist and banker, knows that during the current euro-zone crisis, an independent Scotland would face financial meltdown.

And since it would be impossible to join the euro, what kind of independence would it be if Scotland kept the pound? Basically, Salmond is hoping if he holds on until the end of this parliament, the eurozone crisis will be solved and his dream of a modern capitalist Scotland, pouring renewable energy into the grid and oil into the power stations, will be back on the agenda. Fat chance!

Labour-controlled Glasgow City Council huffs and puffs about the SNP government, but makes the cuts anyway. Edinburgh complains, but is itself mired in a growing scandal over inflated costs for repairs to homes, with a number of staff under police investigation. Aberdeen plans even more cuts in disability service, but is ready to squander millions on destroying one of the city’s best-loved parks.

Labour is leaderless and has not a shred of integrity or a political idea between them. In the place where the working class first realised the need for a political party to represent its interests, that party is now a self-serving unrepresentative clique. The Tories are ready to change tack and change name, using the Ulster Unionists as their model. The Liberal Democrats are desperately trying to distance themselves from Clegg and co - but the voters are not swallowing it.

Nowhere is the collapse of the political class clearer than in Scotland, where the three main political parties manage between then to make a minor figure like Salmond look like General De Gaulle; after the local elections next year he could be presiding over a one-party state. Truly, apres-moi le deluge.

There is an urgent need for People’s Assemblies, not with the aim of holding the political class to account but to plan how to replace them entirely, with a democratic body ready to meet the challenge of the crisis with radical plans for social justice, workers’ control and an end to poverty.

Penny Cole