Scotland doesn’t benefit from British economic 'strength'

But the SNP’s lack of radicalism makes it difficult for the Yes campaign to capitalise.

Against expectations, the Chancellor’s visit to Glasgow last week was a success. Speaking to a gathering of Scottish business leaders, and armed with a hefty new Treasury report, George Osborne set-out a detailed critique of SNP plans for Scotland to retain the pound after independence, a key feature of the nationalists’ 2014 prospectus. But framing his specific warnings about the pitfalls of a "Eurozone-style" monetary union was a broader attack on the economics of separation: the size and scale of the UK’s economy shields Scots from the "rapids of globalisation" – leave it and Scotland could be exposed to ameltdown of Irish, Greek or Cypriot proportions. This is a powerful line, repeated with brutal efficiency by unionist campaigners. The problem, however, is that it simply doesn’t stack up. In fact, Scotland’s vulnerability to global economic shocks is amplified by its continued membership of the UK.

Two recent reports – The Mismanagement of Britain by the Jimmy Reid Foundation and The British Growth Crisis by the Sheffield Political Economy Research Institute (SPERI) - shatter the notion of British economic strength. The former, written by Scottish economist Jim Cuthbert, out-lines the long-term decline in the competitiveness of the UK economy. Cuthbert argues that the growing deficit in the UK’s trade in general goods and services from the 1970s onwards was disguised first, in the ‘80s, by high North Sea oil tax receipts and then, during the ‘90s, by revenues from an increasingly dominant financial services sector. The underlying deficit became more pronounced as successive Westminster governments, Conservative and Labour, allowed Britain’s manufacturing base to erode. Ultimately, this made the British economy over-reliant on a handful of large financial institutions operating at the heart of the international financial system.

In The British Growth Crisis, Professor Colin Hay explains how Britain, as one of a group of deregulated economies including the United States and Ireland, felt the effects of the 2008 crash earlier and more powerfully than other Western states with smaller and less globally integrated banking sectors. As the crisis developed, spreading out from its Anglo-American epicentre, international trade went into free-fall. This tightened the squeeze on British manufacturing, which by now was in no condition to prop-up the UK’s public finances as they grappled with recession. The subsequent loss of taxable economic activity, as well as the huge cost of the bank bail-outs, sent the economy into a prolonged slump and precipitated an explosion of British debt.

Coupled with Osborne’s austerity strategy, the structural imbalances in the British economic model described by Cuthbert and Hay account for the severity of Britain’s downturn (the worst since the 1930s) and the weakness of its recovery (the slowest on record). While growth is beginning to return to France, Germany and even the US, the UK remains more or less stagnant. None of this happened by accident. It was the result of decisions taken by two or three generations of British political leaders which viewed state intervention in the market as a barrier to prosperity. The consequences for Scotland, which has one of the worst social records in the developed world, have been profound. Scots might be entitled to feel doubly aggrieved given the origins of the current crisis lie, to some extent at least, in the liberalising policies of the Thatcher governments they repeatedly rejected. That Scotland’s oil wealth was used to fund the implementation of a number of those policies only adds insult to Scottish injury.

Yet, despite the efforts of the pro-independence left, the threat to Scotland’s economic security posed by British financial instability does not feature as heavily in the constitutional debate as it might. This is because the SNP, for both political and ideological reasons, accepts much of the neo-liberal settlement which has dominated British public life for more than three decades. The clearest illustration of this can be found in the party’s support for the current UK-wide system of financial regulation (described by SNP finance secretary John Swinney as a "solid framework") to remain untouched following the break-up of the Union – a position which reflects the closeness of Alex Salmond to Scottish finance capitalism over recent years. The SNP’s controversial commitment to cut corporation tax provides further evidence of its free-market tendencies.

The political significance of the nationalists’ economic conservatism was laid bare last week, widely (and correctly) perceived as a particularly bad one for the Yes campaign. The economic case for independence should be among the SNP’s strongest cards: the British laissez-faire experiment has proved a spectacular failure, leaving ordinary Scots facinga futureof falling living standards and deteriorating working conditions. Moreover, what remains of the Scottish welfare state - protected from the most radical of New Labour’s reforms by devolution – has come under sustained assault by an unpopular Tory-led government determined to turn a crisis of neo-liberalism into one of social democracy. But, in its current state, the SNP can’t make any of this work to its advantage.It may require some awkward policy U-turns and a degree of ideological repositioning, but Salmond has to start explaining just how serious a hazard the UK represents to Scotland’s economic health.

Scotland's First Minister Alex Salmond gestures during a press conference in St Andrews House in Edinburgh. Photograph: Getty Images.

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

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What happens when a president refuses to step down?

An approaching constitutional crisis has triggered deep political unrest in the Congo.

Franck Diongo reached his party’s headquarters shortly after 10am and stepped out of a Range Rover. Staff and hangers-on rose from plastic chairs to greet the president of the Mouvement Lumumbiste Progressiste (MLP), named after the first elected leader of the Democratic Republic of Congo.

Diongo, a compact and powerfully built man, was so tightly wound that his teeth ground as he talked. When agitated, he slammed his palms on the table and his speech became shrill. “We live under a dictatorial regime, so it used the security forces to kill us with live rounds to prevent our demonstration,” he said.

The MLP is part of a coalition of opposition parties known as the Rassemblement. Its aim is to ensure that the Congolese president, Joseph Kabila, who has been president since 2001, leaves office on 19 December, at the end of his second and supposedly final term.

Yet the elections that were meant to take place late last month have not been organised. The government has blamed logistical and financial difficulties, but Kabila’s opponents claim that the president has hamstrung the electoral commission in the hope that he can use his extended mandate to change the rules. “Mr Kabila doesn’t want to quit power,” said Diongo, expressing a widespread belief here.

On 19 September, the Rassemblement planned a march in Kinshasa, the capital, to protest the failure to deliver elections and to remind the president that his departure from office was imminent. But the demonstration never took place. At sunrise, clashes broke out between police and protesters in opposition strongholds. The military was deployed. By the time peace was restored 36 hours later, dozens had died. Kabila’s interior minister, claiming that the government had faced down an insurrection, acknowledged the deaths of 32 people but said that they were killed by criminals during looting.

Subsequent inquiries by the United Nations and Human Rights Watch (HRW) told a different story. They recorded more fatalities – at least 53 and 56, respectively – and said that the state had been responsible for most of the deaths. They claimed that the Congolese authorities had obstructed the investigators, and the true number of casualties was likely higher. According to HRW, security forces had seized and removed bodies “in an apparent effort to hide the evidence”.

The UN found that the lethal response was directed from a “central command centre. . . jointly managed” by officials from the police, army, presidential bodyguard and intelligence agency that “authorised the use of force, including firearms”.

The reports validated claims made by the Rassemblement that it was soldiers who had set fire to several opposition parties’ headquarters on 20 September. Six men were killed when the compound of the UDPS party was attacked.

On 1 November, their funerals took place where they fell. White coffins, each draped in a UDPS flag, were shielded from the midday sun by a gazebo, while mourners found shade inside the charred building. Pierrot Tshibangu lost his younger sibling, Evariste, in the attack. “When we arrived, we found my brother’s body covered in stab marks and bullet wounds,” he recalled.

Once the government had suppressed the demonstration, the attorney general compiled a list of influential figures in the Rassemblement – including Diongo – and forbade them from leaving the capital. Kinshasa’s governor then outlawed all political protest.

It was easy to understand why Diongo felt embattled, even paranoid. Midway through our conversation, his staff apprehended a man loitering in the courtyard. Several minutes of mayhem ensued before he was restrained and confined under suspicion of spying for the government.

Kabila is seldom seen in public and almost never addresses the nation. His long-term intentions are unclear, but the president’s chief diplomatic adviser maintains that his boss has no designs on altering the constitution or securing a third term. He insists that Kabila will happily step down once the country is ready for the polls.

Most refuse to believe such assurances. On 18 October, Kabila’s ruling alliance struck a deal with a different, smaller opposition faction. It allows Kabila to stay in office until the next election, which has been postponed until April 2018. A rickety government of national unity is being put in place but discord is already rife.

Jean-Lucien Bussa of the CDER party helped to negotiate the deal and is now a front-runner for a ministerial portfolio. At a corner table in the national assembly’s restaurant, he told me that the Rassemblement was guilty of “a lack of realism”, and that its fears were misplaced because Kabila won’t be able to prolong his presidency any further.

“On 29 April 2018, the Congolese will go to the ballot box to vote for their next president,” he said. “There is no other alternative for democrats than to find a negotiated solution, and this accord has given us one.”

Diongo was scathing of the pact (he called it “a farce intended to deceive”) and he excommunicated its adherents from his faction. “They are Mr Kabila’s collaborators, who came to divide the opposition,” he told me. “What kind of oppositionist can give Mr Kabila the power to violate the constitution beyond 19 December?”

Diongo is convinced that the president has no intention of walking away from power in April 2018. “Kabila will never organise elections if he cannot change the constitution,” he warned.

Diongo’s anger peaked at the suggestion that it will be an uphill struggle to dislodge a head of state who has control of the security forces. “What you need to consider,” he said, “is that no army can defy a people determined to take control of their destiny . . . The Congolese people will have the last word!”

A recent poll suggested that the president would win less than 8 per cent of the vote if an election were held this year. One can only assume that Kabila is hoping that the population will have no say at all.

This article first appeared in the 01 December 2016 issue of the New Statesman, Age of outrage