Ed Miliband with Alistair Darling at the Labour conference in 2010. Photograph: Getty Images.
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What happens to Scottish MPs if Scotland votes Yes?

Would they be allowed to vote on UK-wide laws? And would they still stand in May 2015?

After months of indifference, Westminster and Fleet Street have finally begun to recognise the significance of this September’s referendum on Scottish independence. Issues such as which currency the putative state would use and whether it would be able to join the EU are now accorded the attention they deserve. But there remains remarkably little discussion of what the political and constitutional consequences of a Yes vote would be.

If Scotland votes for independence on 18 September, the Scottish and UK governments will open negotiations on such matters as how to divide the national debt and North Sea oil revenues, the future location of the UK’s nuclear weapons and the possibility of a currency union. The Scottish National Party aims to reach a final agreement by 24 March 2016 (“independence day”), in time for the Scottish Parliament elections on 5 May 2016.

One issue that would need to be resolved long before then is the status of Westminster’s 59 Scottish MPs following a vote in favour of independence. As the former Conservative MSP Brian Monteith has warned, the UK would face a “constitutional crisis the like of which has never been seen”. The West Lothian question, which disputes the right of Scottish MPs to vote on reserved matters following devolution, would be posed in its most extreme form: should the MPs of a country that will soon secede be allowed to have any say on UK policy? Should they be allowed to serve in the British government? Some Conservatives darkly question whether David Cameron, having lost the Union, would be forced to resign as Prime Minister.

There would be further upheaval in May 2015 when Scottish voters would elect MPs to serve for as little as ten months before being expelled from Westminster. Were a Labour (or Labour-Lib Dem) government to be formed on the basis of support from MPs north of the border (where Labour currently holds 41 MPs to the Conservatives’ one), the right-wing media and many Tories would denounce it as an illegitimate imposition on the rest of the UK. Ed Miliband, meanwhile, would face the prospect of losing his majority less than a year after becoming prime minister. As a Labour MP put it to me, “If we lose Scotland, we could be completely buggered.”

The belief that Scottish independence would consign the rest of the UK to permanent Conservative government is one that inspires hope among Tories (“It’s win-win for us,” one told me recently) and despair among Labour. But both overestimate the influence of Scotland on general elections. On no occasion since 1945 would independence have changed the identity of the winning party and on only two occasions would it have converted a Labour majority into a hung parliament (1964 and October 1974). Without Scotland, Labour would still have won in 1945 (with a majority of 143, down from 146), in 1966 (75, down from 98), in 1997 (137, down from 179), in 2001 (127, down from 166) and in 2005 (43, down from 66).

What those who say that Labour cannot win without Scotland are really arguing is that the party will never win a sizeable majority again. History shows that England and Wales are prepared to elect a Labour government when the conditions are right. But, at least for psephological reasons, it is Miliband, more than Cameron, who has cause to fear the tightening of the polls.

This piece appears in this week's issue of the New Statesman

George Eaton is political editor of the New Statesman.

This article first appeared in the 19 February 2014 issue of the New Statesman, The Space Issue

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The Autumn Statement proved it – we need a real alternative to austerity, now

Theresa May’s Tories have missed their chance to rescue the British economy.

After six wasted years of failed Conservative austerity measures, Philip Hammond had the opportunity last month in the Autumn Statement to change course and put in place the economic policies that would deliver greater prosperity, and make sure it was fairly shared.

Instead, he chose to continue with cuts to public services and in-work benefits while failing to deliver the scale of investment needed to secure future prosperity. The sense of betrayal is palpable.

The headline figures are grim. An analysis by the Institute for Fiscal Studies shows that real wages will not recover their 2008 levels even after 2020. The Tories are overseeing a lost decade in earnings that is, in the words Paul Johnson, the director of the IFS, “dreadful” and unprecedented in modern British history.

Meanwhile, the Treasury’s own analysis shows the cuts falling hardest on the poorest 30 per cent of the population. The Office for Budget Responsibility has reported that it expects a £122bn worsening in the public finances over the next five years. Of this, less than half – £59bn – is due to the Tories’ shambolic handling of Brexit. Most of the rest is thanks to their mishandling of the domestic economy.

 

Time to invest

The Tories may think that those people who are “just about managing” are an electoral demographic, but for Labour they are our friends, neighbours and the people we represent. People in all walks of life needed something better from this government, but the Autumn Statement was a betrayal of the hopes that they tried to raise beforehand.

Because the Tories cut when they should have invested, we now have a fundamentally weak economy that is unprepared for the challenges of Brexit. Low investment has meant that instead of installing new machinery, or building the new infrastructure that would support productive high-wage jobs, we have an economy that is more and more dependent on low-productivity, low-paid work. Every hour worked in the US, Germany or France produces on average a third more than an hour of work here.

Labour has different priorities. We will deliver the necessary investment in infrastructure and research funding, and back it up with an industrial strategy that can sustain well-paid, secure jobs in the industries of the future such as renewables. We will fight for Britain’s continued tariff-free access to the single market. We will reverse the tax giveaways to the mega-rich and the giant companies, instead using the money to make sure the NHS and our education system are properly funded. In 2020 we will introduce a real living wage, expected to be £10 an hour, to make sure every job pays a wage you can actually live on. And we will rebuild and transform our economy so no one and no community is left behind.

 

May’s missing alternative

This week, the Bank of England governor, Mark Carney, gave an important speech in which he hit the proverbial nail on the head. He was completely right to point out that societies need to redistribute the gains from trade and technology, and to educate and empower their citizens. We are going through a lost decade of earnings growth, as Carney highlights, and the crisis of productivity will not be solved without major government investment, backed up by an industrial strategy that can deliver growth.

Labour in government is committed to tackling the challenges of rising inequality, low wage growth, and driving up Britain’s productivity growth. But it is becoming clearer each day since Theresa May became Prime Minister that she, like her predecessor, has no credible solutions to the challenges our economy faces.

 

Crisis in Italy

The Italian people have decisively rejected the changes to their constitution proposed by Prime Minister Matteo Renzi, with nearly 60 per cent voting No. The Italian economy has not grown for close to two decades. A succession of governments has attempted to introduce free-market policies, including slashing pensions and undermining rights at work, but these have had little impact.

Renzi wanted extra powers to push through more free-market reforms, but he has now resigned after encountering opposition from across the Italian political spectrum. The absence of growth has left Italian banks with €360bn of loans that are not being repaid. Usually, these debts would be written off, but Italian banks lack the reserves to be able to absorb the losses. They need outside assistance to survive.

 

Bail in or bail out

The oldest bank in the world, Monte dei Paschi di Siena, needs €5bn before the end of the year if it is to avoid collapse. Renzi had arranged a financing deal but this is now under threat. Under new EU rules, governments are not allowed to bail out banks, like in the 2008 crisis. This is intended to protect taxpayers. Instead, bank investors are supposed to take a loss through a “bail-in”.

Unusually, however, Italian bank investors are not only big financial institutions such as insurance companies, but ordinary households. One-third of all Italian bank bonds are held by households, so a bail-in would hit them hard. And should Italy’s banks fail, the danger is that investors will pull money out of banks across Europe, causing further failures. British banks have been reducing their investments in Italy, but concerned UK regulators have asked recently for details of their exposure.

John McDonnell is the shadow chancellor


John McDonnell is Labour MP for Hayes and Harlington and has been shadow chancellor since September 2015. 

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump