Sunday, 22 May 2011

Enough of this nonsense

The period after elections is often an illusory one. During election campaigns, political activists are deceived into thinking that politics plays a much more important role in most people’s lives than it actually does. Just as importantly however, in the period immediately after elections, they are reluctant to accept that politics doesn’t actually play that important a part in their own lives. Excepting the defeated MSPs, their staff and the various Party apparatchiks looking to find new employment, the election is already a distant memory but real life goes on.

I’ve already written about how Labour shouldn’t rush into decisions about the leadership but the same surely must apply to over hasty policy changes or organisational reforms. Much of what has happened so far has been for the good. The terms of reference for the Murphy/Boyack review seem both obvious and unrestricted. So far, the Labour inclined commentariat have generally reached the correct conclusions as to the required direction of travel, helped, it must be acknowledged, by contributions from some unlikely sources. (For example, nobody has got it much better than Tom Harris.) We can therefore look forward with some optimism to the review process reaching the right conclusions and, frankly, will neither assist nor speed these conclusions by screaming from the sidelines.

But we shouldn’t lose sight of the fact that the people of Scotland will not be hanging on every word. For the moment the truly important Party is the governing Party. It is frustrating therefore that they are getting such an easy ride, although for the moment that is an almost inevitable consequence of the opposition’s disarray.

On Wednesday, the First Minister made a number of immediate demands. I will go on to consider these in turn but I wish first to consider the basis for the Holyrood Government demanding anything.

Scotland undoubtedly has the the unilateral right to leave the Union. There is common ground between all of the unionist Parties in that regard. If however Scotland chooses not to leave the Union then the relative distribution of powers between the Westminster and Holyrood Parliaments must inevitably be a matter for negotiation. The underlying if unspoken assumption behind the Convention process was always that this was not a scheme that could ever be forced on an unwilling United Kingdom. While trying to devise a scheme that respected the rights of the other sovereign nations within the UK and to persuade them of its merits, the Conventioneers real leverage was that if some reasonable measure of devolution was not conceded then that middle ground opinion might have no alternative but to be forced into demanding Independence.

Now, this is not a strategy which can be advanced by the SNP while they continue to argue that they will never be satisfied by anything short of “FREEEDUM!”. If, on Wednesday, Salmond had said “If you give us this we will be content” then there would be a logic in entering into negotiations but, since he didn’t and, indeed, for internal Party management reasons, he never could, then while it is clearly appropriate to his Office that he be given a hearing, it is less than clear why he requires a response other than NO. After all, what could he then do, other than call a Referendum on Independence, something he is committed to anyway? (I think)

This is particularly the case because some of Salmond’s proposals on Wednesday are truly characterised as what classic Trotskyism defined as transitional demands. A transitional demand is one which appears on the surface to be a reasonable one but which (in Trotskyist theory) could never actually be delivered by the existing regime. There is no more telling example than the Bolsheviks 1917 demand for “Peace, Bread and Land”. (These do not have to be all something the “demanders” believe in themselves. The Bolsheviks had no means of delivering the second and absolutely no intention of delivering the third).

Some of Salmond’s demands are , at first blush, as peace was in 1917, not unreasonable. Who could object to a subsidised Scottish television channel in the digital age? No-one would be forced to watch and Radio Scotland currently sits quite happlily alongside Radio’s 2, 4 and 5, covering much the same territory but from a Scottish perspective. The only possible quibble is the Nationalists customary failure to suggest what part of the BBC’s existing output should make way to pay for it but if it was River City I might vote SNP myself.  Equally, the borrowing powers he demands are already in Calman and were an obvious omission from the 1998 Act. In that regard he’s actually trying to claim credit for something already on its way.

The transitional demands however lie in the other four “demands”.

The first is devolved Corporation Tax. What exactly is the purpose of this demand? It cannot be simply that big business in Scotland should pay less tax. That might make sense as an economic strategy if you were Margaret Thatcher or Ronald Reagan but it is hardly in keeping with the SNP’s current Social Democratic persona. Nor is it, we are repeatedly assured, with a view to Scottish big business paying higher taxes. So why make this demand?  It is with the specific intention of cutting Corporation Tax to encourage existing businesses to relocate their headquarters to Scotland from er................England.  Not Scottish businesses, you understand. After all, who is interested in them*?

(*When the SNP originally devised this policy that prize was of course meant to include RBS and HBOS but we’re all just supposed to have a bout of collective amnesia about that).

No, the intention is that businesses primarily trading in England might decide to have their headquarters in Scotland because that way they would pay less tax. And of course, because otherwise they would be in a common economic area with the rest of the UK and the EU there would be no downside for the businesses or for Scotland in that. Only for the English and, more significantly, for the rest of Europe. The latter being why such “Selective Regional Assistance” is actually illegal within European Law.  Now Wee Eck (who is not stupid) knows that. But he also knows that it is not, for the moment at least, illegal for sovereign states within the EU to have lower rates of Corporation Tax and will remain so, at least until the Irish need to renegotiate their bail out. So why should he not make this demand? As with his remaining proposals,  differential Corporation Tax  sounds good but it can never be delivered within a unitary United Kingdom. It is truly a transitional demand.

As is the demand for variable excise duties. Again, on the face of it, what could be more reasonable? Scotland has a particular problem with cheap drink. That problem is significantly larger among the poor. If the cost of drink was higher, in theory at least, the poor would drink less and be all the better for it. Although they could hypothetically drive to Carlisle for a better deal, frankly, they would be unlikely to have the resources, time or inclination to do so and would therefore drink less. So what’s the downside here? Scotland’s second largest export sector deals with drink that is far from cheap, whisky. It is inconceivable that an SNP Government would ever see that sold at a cheaper price in England. And, given the demand from south of the border, might the corporation tax argument not also come to hold sway here as well. If differentials can encourage well to do English consumers to buy their spirits (and again EU Law would demand equivalent duty across all spirits) in Scotland, perhaps over the internet, who would lose out from that except the English exchequer? But why would the English ever agree to that within a unitary state?Now there is a solution, cross border customs control. Which is why, once again, this is truly a transitional demand.

As is the demand that Scotland participate in UK delegations to the EU. European politics are a constant negotiation but the Lisbon Treaty effectively gives the “big” countries a veto. The remaining small countries are effectively tied into qualified majority voting or to walking away from the EU  completely. England is a big country. Scotland is not. Now, the SNP are in a bit of a dilemma over membership of the EU. No Country in the EU is truly “Independent”. They have agreed to share sovereignty for the greater good. I agree with that choice but, to be fair, other people who are not lunatics take a different view. There are many in Greece who believe that withdrawal from the Euro and competitive devaluation would best serve their national interest and many in Germany, from a completely opposite perspective, who would like to return to the Deutschmark. And then there is UKIP. But, there is no more obvious contradictory attitude to the European Union than within the SNP. Membership of the EU is the guarantee that an independent Scotland would not be either Albania or De Valera’s Ireland. But membership of the EU as a small peripheral nation, with a right to participate in qualified majority voting, would equally be somewhere short of Independence. So why not hide behind the big country veto while continuing to call the shots? That would surely be the ideal outcome if only the big country would agree. But why should they ever agree? European Union depends on negotiation. “We will reluctantly go along with this if we can count on your future support in relation to that”. Why should the English ever agree to being the dog wagged by the tail in such a process? Unless, again, there was no anticipation that they would agree, such a requirement forming simply, once again, a “transitional demand”.

And, finally, there is the issue of the Crown Estate. Even I concede, a quite brilliant ploy, for it suggests that revenue in some sort of unspecific way accruing to the Royal Family should instead accrue to the people of Scotland. Only, firstly, the revenue doesn’t currently go to the Royal Family. It goes to the UK exchequer. But why, even then, with the anticipation of significantly greater revenues arising from wind, tidal and coastal power, shouldn’t it come to Scotland? Well, partly because, proportionate to need, under the Barnet formula, it will. But why, given the disproportionate wind, tidal and coastal resources of Scotland, shouldn’t we get a share proportionate to our contribution? Well, partly because those paying 50% tax on inherited wealth don’t get any better NHS treatment than the rest of us. But also because the remote, wet and windy parts of Scotland have, on any view, been subsidised considerably by the remainder of the UK since the development of the modern state: be it through a universal postal system, a guaranteed television signal or public roads built by all of us to connect three men and a dog to civilisation, even though we have not the remotest intention of travelling in the opposite direction. If, a week after the hypothecation of the Crown Estate revenues, a man in a garage in Tunbridge Wells discovered the secret of cold fusion, making the need for any other renewable energy resource redundant, how would we react if the Westminster Government announced that a discovery made in England by an Englishman was to be deployed for exclusively English benefit? And indeed that we were now welcome to do what we liked with the Crown Estate? The Union depends on social solidarity. Any demand that undermines that is, once again, a transitional demand.

So, there is an unarguable case, within the Union, for rejecting all four of Salmond’s most tendentious demands. If he’s not happy and demands a referendum on Scottish Independence, I suggest we invite him to get on with it.

I have already written as to why Labour lost on May 5th. Not one of my ten reasons was that there was a any real desire for Scottish Independence. If I was to write ten reasons as to why the SNP won, a popular desire for Independence would still not be on that list. No one knows that better than them. It is time to call their bluff.

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