IN his column in The National on July 31 – “Some choices about our future are for after independence” – Michael Russell argued that: “We should avoid having all the arguments about all the possible types of society we can envisage before the people themselves have decided that they do indeed want to walk into a new world.”
But this begs the question, why would anyone choose to walk into a new world unless they had some idea of what it will be like? If there is to be a new world for Scotland, we will have to make it because it will not fall out of the skies spontaneously. So there has to be at least some overarching purpose to independence. Independence for its own sake is meaningless.
Sure, there will be much detail to work out, but objectives such as “building a fairer and more equal society” or creating a “wellbeing economy” are essential motivators for independence. We can’t then avoid discussing how we deliver these goals. It is the necessity for this conversation that the Scottish Banking & Finance Group (SBFG) has been advocating over the last few months in our series of articles in The National.
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Building a fairer and more equal society and a wellbeing economy cannot be achieved unless we have our own currency. This is a pre-condition for real independence and is unequivocally not an issue to be dealt with after independence. Preparations are necessary beforehand so we have a central bank and a currency ready to go right away after independence day.
However, our own currency is not in itself sufficient. The UK has its own currency but is not a “fair and equal society” nor is the UK a “wellbeing economy”.
We need to discuss our future constitution before we get to independence. If we want to build a fairer and more equal society and a wellbeing economy our constitution must be designed to support these objectives. That means defining fundamental human rights essential to wellbeing such as rights to food, water, housing, energy, health, education, work, pensions, as well as those rights set out in the European Convention on Human Rights.
The constitution must also provide the framework for full accountability of public institutions and make provisions for restrictions on lobbying by powerful corporate, financial and other vested interests. We cannot postpone this essential conversation until later.
What will determine whether our currency underpins our chosen goals is how our financial system works. If we simply replicate the UK financial system we will replicate the UK economy and the social inequality that comes with it as well as the failure to take the necessary action to move the economy to zero carbon. (we use the term “zero carbon” deliberately as “net zero” is a cop-out which avoids making essential hard choices).
The UK has its own currency but its financial system has singularly failed to deliver the investment necessary to support the transition to zero carbon, or even to make any serious strides to “net zero”.
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The SBFG articles have focused on the issues relating to Scotland’s future financial system that we must be talking about. While we have made some specific proposals, what is more important is that we all have the conversation about what we want our currency, constitution and banking and financial system to deliver.
We also need to consider how to use our collective pension savings for productive purposes, recognising that at present too much “investment” by pension funds is nothing more than financial speculation, based on buying and selling assets instead of creating the productive capacity we need so that we can all live well and in harmony with nature.
We need to be discussing what we want from independence so that we can understand what things we can be doing NOW to lay the foundations. Here are three suggestions in the few remaining lines available for this article for what we could be doing now:
-Heads of governance of local government pension schemes and other large Scottish pension funds should be invited by the Scottish Government into a forum with the Scottish National Investment Bank, Scottish Enterprise and local authority leaders to discuss how financing for the transition to zero carbon can be provided pre-independence.
-There needs to be a plan to stop wealth draining out of our economy and for promoting domestic ownership, particularly in key sectors of the economy. The McVitie’s debacle makes the case. If the Scottish Government and Scottish Enterprise can provide a new factory, why can’t pension fund investment be provided to capitalise a new domestically owned business and develop new products?
-Pension funds must be prevented from partnering with investment funds which are registered in tax havens.
The Scottish Government has formed an Advisory Committee on Economic Transformation – that group needs to be laying the foundations for our post independence economy.
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Callum Baird, Editor of The National
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