How Scottish trade unions are shifting in favour of independence

The SNP could use Labour’s promise to maintain coalition austerity policies to increase union support.

In 1968, Mick McGahey, president of the National Union of Mineworkers in Scotland, attacked nationalism, an increasingly prominent force in Scottish politics, as a bourgeois deviation from the class struggle: “[The Scots are] entitled to decide the form and power of their own institutions,” he said at a specially convened trade union conference on devolution. “But Scottish workers have more in common with London dockers, Durham miners and Sheffield engineers than they have ever had with Scottish barons and landlord traitors.” The belief, expressed here by McGahey, that working class interests are indivisible across the United Kingdom was deeply embedded in the British organised labour movement throughout the 20th Century, and no more so than between the late-1940s and mid-1970s when Britain was at its most identifiably social democratic.

Today, the post-war welfare consensus has been shattered by more than three decades of Westminster-led neo-liberal reform, while trade union influence has diminished under the weight of Thatcher-era constraints. Moreover, the nationalism McGahey so forcefully denounced holds the reins of power in devolved Scotland and - current polls aside - stands a realistic chance of breaking-up the British state in next year’s independence referendum. In the midst of all this, Scottish trade unionism faces a difficult choice: to reaffirm its traditional commitment to the UK or abandon a British political system which seems exhausted of all radical potential.            

Few people are better qualified to assess that choice than Dave Moxham, deputy general secretary of the Scottish Trades Union Congress (STUC), an umbrella body representing 37 affiliated trade unions and 630,000 workers across Scotland. Speaking to the New Statesman recently, Moxham explained the challenge the constitutional question poses his organisation: “The constitution stands apart from things like workplace protection because people don’t become trade unionists in order to win independence or stay in the UK. If we were to declare for a Yes vote or a No vote, we’d be projecting a complicated dynamic in binary terms. Where would that leave those constituent unions who voted differently?”

The STUC has a long history of support for devolution. In the 1970s it argued for the creation of a Scottish workers assembly and, two decades later, was instrumental in delivering the Holyrood parliament. For a while, it looked as though it might play a similar role in the independence debate, campaigning alongside other civil society organisations for a multi-option ballot. But the UK parties vetoed this, leaving the STUC reluctant to rush into an endorsement of any one constitutional position: “Initially, there was an assumption that the civil society alliance which emerged in the ‘80s and ‘90s over devolution might re-emerge”, Moxham said. “But the consensus which existed then is now more evenly split between [opposing] positions. Because of this, we’re not prepared to make up our mind until a series of key concerns have been addressed.”

These concerns were articulated in a detailed report - A Just Scotland - the STUC published last November. The report calls on the debate’s main protagonists to outline how their preferred constitutional settlements might improve life for working class Scots. Referring to the widespread support for a more powerful Scottish parliament which exists among anti-independence trade unionists, it also challenges Scottish Labour to produce bold proposals for the next phase of devolution, something Moxham believes is crucial: “Labour desperately needs to change if it’s going to regain its historical position in Scotland. This means bringing forward a positive vision and sweeping away all the pejorative language it has been using about, for instance, Scotland’s finances [outside the UK].”

Nonetheless, Scottish Labour’s relationship to the unions could have a substantial bearing on outcome of the referendum. Many women and public sector workers – two core constituencies in the referendum battle – are members of major unions, like Unison and Unite, which are still formally affiliated to the party and maintain relatively close links to its leadership. Without high levels of support from these groups, it will be extremely hard for the SNP to secure a majority for independence, not least because Scotland’s professional classes have remained steadfastly opposed to separation for decades.

At the same time, there is little doubt Labour’s sway over the unions has weakened. Not long after the STUC refused an invitation to join Better Together, the pro-UK campaign vehicle, the second largest branch of the Communication Workers Union (CWU) in Scotland, which represents Edinburgh, Stirling, Fife and Falkirk postal workers, voted to back independence. The CWU branch vote echoed a 2010 poll conducted by the Scottish Fire Brigades Union (FBU), which showed more than half its membership favoured secession. These developments reflect an underlying trend in Scottish politics: that of natural Labour supporters gradually switching to the SNP at Holyrood elections.

Cross-border ties between unions, which for so long helped cement solidarity among Scottish and English workers, also seem to have deteriorated over the last ten or twenty years. The onset of devolution and the transfer of control to Edinburgh of, among other things, transport, health and education policy, created a new layer of state power with which Scottish branches of British unions had to negotiate, reducing their reliance on larger, Westminster-focused, UK-wide structures. The recent statement of support for Scottish independence by Rail, Maritime and Transport (RMT) boss Bob Crow - not to mention the conspicuous failure of Mark Serwotka, general secretary of the Public and Commercial Services union (PCS), to speak out against it when last given the chance - has added to this sense of divergence.

There are powerful political dynamics at work here too. Scottish Labour leader Johann Lamont’s speech last September questioning the sustainability of universal benefits in Scotland established a clear ideological divide in the referendum campaign, pitching the SNP’s more conventional approach to social democracy against Labour’s Blairite demands for greater means-testing. This contrast has grown sharper still since Deputy First Minister Nicola Sturgeon – the most prominent centre-left voice in the SNP leadership - assumed control of the nationalists’ referendum strategy at the end of 2012. Given the severity of the coalition’s public spending cuts, worsening material inequality and the continued presence of nuclear weapons on the Clyde (something the STUC strongly opposes), it’s easy to see why, for large numbers of Scottish trade unionists, the appeal of London rule is beginning to wear thin.

Of course, scepticism about the likelihood of independence transforming Scotland into some sort of “progressive beacon” persists. At a recent seminar of the Red Paper Collective, a left-wing devolutionist group with close links to the unions, delegates cited the over-reliance of the Scottish economy on international finance capitalism, as well as its high levels of foreign ownership, as evidence that self-government will not lead to a revival of socialist politics. The neo-liberal streak in SNP economic policy also featured heavily in the Collective’s critique and, according to Gregor Gall, professor of industrial relations at Bradford University, represents a significant factor in the shaping of trade union attitudes to the national question: “The potential for unions to support independence on the grounds of social justice and workers’ rights is undermined by the SNP’s overtly pro-business agenda”, he told the New Statesman. “In order to win unions away from Labour, it will have to become more radical and reject the neo-liberal model.”

The opposition of organised labour in Scotland to separatism, formed over decades of shared struggle with workers across Britain, is less intense today than it was during, for instance, the mid-20th Century, when Mick McGahey presided over the Scottish NUM. A pragmatic assessment of the likely risks and benefits of independence –rather than political conviction or ideology –now tends to inform the response of Scottish trade unionism to the nationalist challenge. To whose advantage will this work in 2014? Professor Gall thinks the answer depends on how effectively the Yes campaign employs the language of social democracy to frame its case for self-government: “The basis of union support for independence exists because it is under the British model that the welfare state has been continually attacked. The SNP could use Labour’s promise to continue coalition austerity policies, albeit at a slightly slower rate, as a way of opening the door to the unions. But it will take boldness and political foresight to grasp this opportunity.” 

Pro-independence graffiti is written on the gable end wall of a derelict cottage in Bannockburn, Scotland. Photograph: Getty Images.

James Maxwell is a Scottish political journalist. He is based between Scotland and London.

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Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.