Standard Life threat shows where power really lies

Standard Life's statement that in the event of a “Yes" vote in the Scottish referendum they would leave Edinburgh, forcing 5,000 employees to choose unemployment or emigration, shows up the narrowness of the independence debate so far.

The insurance company said it would have no choice because Westminster has ruled out a currency union with an independent Scotland which would be denied the possibility of retaining the pound.

The Edinburgh-headquartered company’s statement serves as a reminder of where power really lies, and the reality that political power, whether located at Westminster or Holyrood, means nothing without economic and financial authority.

Just as Standard Life was putting the boot, the Royal Bank of Scotland posted massive losses for the sixth year running. The essentially bankrupt bank announced that it has decided to pull out of some of their riskier activities and focus on "bread and butter banking".

Is that the right or wrong thing to do? One thing is for sure, we were not asked though we as taxpayers nominally own the bank. RBS CEO Ross McEwan declines to say if the bank will leave Edinburgh if there's a vote for independence in September’s referendum.

But no way can a few million Scottish taxpayers bail out that behemoth when the next crisis strikes. They would just have to crash, taking thousands of jobs and millions in savings with them. The same goes for the Bank of Scotland.

The problem is there is no real transfer of power on offer as a result of the referendum. Alex Salmond's business-loving, oil-addicted party do not present a materially different future as a result of independence. So the SNP has a very narrow platform. In effect all they can offer is "Scotland ruled by Scots" and "no more Tory governments".

Given that the SNP and One Nation Labour are equally willing to kow-tow to ruthless corporations (remember the shocking betrayal at Grangemouth last year), that's pretty uninspiring.

The SNP had no answer to the question, what will happen if Scotland is excluded from a shared currency? They simply called Osborne-Alexander-Balls "bullies" and said they would never carry through the threat.

They didn't point out the obvious, that this shows that the three main parties are entirely in agreement on economic and financial issues, with absolutely no difference between them. That's because the SNP share the same ideology!

It couldn't have been clearer this week, when the ConDem Cabinet met in Aberdeen and the SNP Cabinet met just down the road at Portlethen. They may have been separated by a few miles, but they simultaneously presented the same fawning, acquiescent policies to the giant oil corporations.

This independence referendum is certainly putting questions of democracy and the realities of state and economic power into sharp relief. It is a disruption of the status quo that is causing huge distress, particularly for Labour.

If the SNP cannot give any powerful reason why people should vote for independence, nor can Labour give any meaningful reason why they should not. A strange scene yesterday at Westminster underlines this.

SNP MP Pete Wishart went into the voting lobby to see which Scottish MPs had turned up to vote in a motion on the bedroom tax. Scottish Labour MPs failed to even turn up last time, to their eternal shame.

East Renfrewshire MP Jim Murphy rushed up to Wishart screaming "fuck off, fuck off, fuck off....." over and over again. It was a bizarre scene by all accounts, but I would argue this unbearable tension felt by Scottish Labour is about more than loss of seats and personal incomes.

As Labour cannot advance either a socialist case, a working class solidarity case for the continued union of Scotland and England or principled support for self-determination, then what have they become? Demonstrably, undeniably, another party of big business, a process that began with the Blair governments. Neverthless, Labour’s crisis over Scotland is an  historic moment for the party of Keir Hardie.

Penny Cole

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