Socialist Worker

Devolution and the neoliberal agenda

Issue No. 2158

Official reports such as the Calman Commission on Scottish Devolution do not usually interest socialists, with good reason.

In this case, however, we should pay attention to some of its conclusions, because they show the way in which an aspect of the neoliberal agenda is still being pursued, in spite of the crisis.

The replacement of the vanguard neoliberal governments of Margaret Thatcher and John Major with the social neoliberal governments of Tony Blair and Gordon Brown led to several

long-awaited constitutional reforms – including the devolution settlements in Scotland and Wales, and the restoration of local government in London.

These met popular aspirations without threatening the economic order. But devolution was also useful to social neoliberalism in two other ways. First, the more the politics is emptied of content, the more social neoliberal regimes need to prove that democracy is still meaningful.

They do this not by extending areas of life under democratic control, of course, but by multiplying the opportunities for “citizen-consumers” to take part in elections for councillors, mayors, members of the Welsh and London Assemblies, and of the Scottish, European and British Parliaments.

More than any other party, the Scottish National Party (SNP) has benefited from this by actually delivering several minor but welcome reforms.

Second, devolution can delegate responsibility for implementing “reforms” down from governing parties to elected bodies whose options are severely restricted by law, the privatised arena in which they operate, and reliance on Treasury funding.

Two feet

Neoliberals also see advantages in devolution, or even independence for Scotland. The Economist magazine has been arguing for years that Scotland should “stand on its own two feet”. Deprived of subsidies, which supposedly allow the Scots to maintain higher levels of public sector provision than the rest of Britain, they would finally be forced to live within their means.

Various politicians, with David Cameron at the forefront, are also attempting to mobilise mass revulsion over MPs’ expenses behind calls for responsibility to be devolved still further to individuals, families and neighbourhoods.

The assumption is that the people most likely to participate will be members of the middle class who will support restrictions on local taxation and public spending, and thus maintain the neoliberal order with a supposedly popular mandate.

This is the context in which the Calman report has been issued. At its heart is the question of taxation. Calman recommends that the British government should reduce the amount of income tax collected in Scotland across all rates by 10p and reduce the Scottish block grant by an equivalent amount.

The Scottish Parliament would then have to either levy a Scottish rate to cover the reduced grant income. It could choose to set that rate at a level that would provide greater or less income than the grant, but it could not change the tax bands themselves.

All the mainstream parties have supported this proposal. The SNP declined to cooperate with the commission because it refused to consider independence as part of its remit – but there is no doubt that it will also embrace these proposals as bringing full fiscal control nearer.

The question is what will the SNP do with this tax-raising ability?

In economic terms, the SNP is as committed to neoliberalism as its rivals. But so far it has been able to present its “left” face to working-class voters while itself “devolving” unpalatable decisions about job and service cuts down to local councils.

With massive cuts to the Scottish budget grant in the pipeline even before the recession began, and the bosses’ CBI demanding austerity measures, the SNP’s room for manoeuvre is being increasingly narrowed.

The second half of the SNP government’s term is unlikely to be as untroubled as the first but equally, the responsibility of the left in Scotland to present a unified and coherent alternative is now very great indeed.

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Tue 30 Jun 2009, 18:25 BST
Issue No. 2158
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