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From The Socialist newspaper, 19 February 2014

Scotland: 'Project Fear' goes into overdrive

Philip Stott, Socialist Party Scotland

The growing conflict over Scottish independence has dramatically escalated following the coordinated intervention by the main pro-union parties.

They have ruled out an independent Scotland forming a currency union with the rest of the UK. This choreographed assault on the Scottish National Party's (SNP) plan is designed to undercut support for independence ahead of the referendum on 18 September. It may, however, have the opposite effect.

"If Scotland walks away from the UK, it walks away from the UK pound." This was Tory Chancellor George Osborne's stark warning to those considering voting Yes.

Within hours Labour's Ed Balls had given the same message. Lib Dem Danny Alexander insisted it was "crystal clear a currency union would create unacceptable risks".

Scottish first minister Alex Salmond responded by claiming that "the reality is that a formal currency union with a shared Sterling area is overwhelmingly in the rest of the UK's economic interests... the stance of any UK government will be very different the day after a Yes vote." The Scottish National Party (SNP) leadership has also raised the possibility of refusing to pay Scotland's share of the UK debt if they are frozen out of a currency union.Osborne's threats

The outright refusal by the main capitalist UK parties to allow an independent Scotland to be part of a sterling zone is a serious threat.

It reflects the overwhelming opposition of British capitalism to the possible break-up of the UK state. And they are prepared to fight tooth and nail to prevent it taking place.

As it slowly dawns on the SNP leadership that an independent Scotland may not be able to participate in a formal single currency arrangement, they are likely to put more emphasis on the other options contained in their "fiscal commission" which reported last year.

This put forward four options: a sterling zone, the euro, a Scottish pound pegged to sterling and fully separate Scottish currency.

The SNP will still continue to argue for their preferred option, hoping that post a successful Yes vote there will be a change of position by the main capitalist parties.

The SNP leadership have failed to grasp the reality of the entrenched class opposition to Scottish independence by the majority of the British establishment.

As a Financial Times editorial pointed out: "What is not in doubt - and has been too little discussed - is that the rest of the UK would be weakened.

"The international status of the 'rump UK' would be diminished. Britain's prized reputation for political stability would slip; investor confidence would be lost."

Or, as Cameron put it recently, "independence would rip the rug from under our reputation."

This nightmare scenario is driving the anti-independence campaign. "Project Fear", the self-styled name of the Labour and the Con-Dems' Better Together campaign, has stepped up its propaganda drive recently in response to polls showing a small increase in support for independence.

Since the production of the SNP government's White Paper on independence at the end of November 2013, nine opinion polls asked how people intend to vote in September.

The Yes vote stands at 40%, an increase from the 38% average from August to November 2013.

Economic disaster?

Even this modest increase has sparked concern and nervousness in the pro-union campaign. Since the start of 2014 a deluge of press stories has appeared predicting an economic disaster should Scotland vote to separate itself from the UK.

RBS will leave Scotland, as will Lloyds, Tesco Bank and Scottish Widows. Power bills will rise, elderly care will be unsustainable, supermarkets will increase food prices, the pensions system will collapse.

These doom-laden predictions have not resulted in the polls moving the way the pro-union lash-up had hoped. Hence the need for Project Fear to move up a further gear.

But the SNP's vision for an independent Scotland isn't bolstering support for independence either. The White Paper from the Scottish Government confirmed that under independence the SNP intend to continue with cuts and cut taxes even further for big business.

They are opposed to even modest measures of public ownership, even for profiteering gas and electricity companies.

The plans for a currency union with the rest of the UK underpinned the SNP's White Paper. It would be the "best option for business." Under Salmond's plan, an independent Scotland would concede control over interest rates to the Bank of England and, in practice, give up a significant degree of control over Scottish budgets.

This fiscal union as well as a monetary union would bind an independent Scotland into an austerity pact.

A separate Scottish currency - as advocated by sections of the Yes campaign and former deputy leader of the SNP Jim Sillars - would not offer an automatic way out either.

Only a wide-ranging programme of socialist measures, including a refusal to pay the debt stacked up by the bailout of the banks in 2008/09 linked to the full democratic nationalisation of the banking system and the major sectors of the economy can lay the basis for a way forward and a full reversal of the cuts.

In effect the SNP's 'independence' is a form of 'devo-max' with a large element of a federal arrangement still in place. Their vision is based on a continuation of a crisis-ridden capitalist system.

Socialist Party Scotland, while supporting a Yes vote in September, is campaigning against the SNP's pro-business blueprint.

We stand for an independent socialist Scotland as part of a democratic and voluntary socialist confederation with England, Wales and Ireland as a step to a socialist Europe.

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In The Socialist 19 February 2014:


Socialist Party news and analysis

Floods chaos: End cuts now!

Floods reveal rottenness of government cuts

High rents + low wages - End this housing misery

Scotland: 'Project Fear' goes into overdrive

Affordable childcare? And where are the jobs?

Barclay's bonuses - laughing all the way to the bank

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The Socialist readers' comments

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