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THE government’s White Paper “The UK Single Market,” issued on July 16, throws down a challenge to the labour movement and all defenders of working-class democracy. It proposes that virtually all powers for industrial and economic intervention be concentrated in the hands of central government.
In Scotland’s case this involves repealing a section of the 1998 Scotland Act that enables the Scottish Parliament to give “financial assistance to commercial activities for the purpose of promoting or sustaining economic development or employment.”
Securing this power had been a central objective of the Scottish labour movement ever since the first Scottish Assembly held in 1972 as part of the campaign to save Upper Clyde Shipbuilders. Over the following years this demand was further strengthened by Scotland’s experience of radical de-industrialisation through the 1980s and 1990s.
The reason given in the White Paper for this new centralisation of powers is the need to create a UK Single Market. Such a market, it is claimed, requires a single economic territory within which all businesses can compete equally, all markets are equally accessible and where the technical requirements for all goods and services are the same.
This, it is claimed, is a necessary condition for Britain’s economic development and recovery. To secure it, any local, regional or nationally provided economic incentives or subsidies must be eliminated and the process of marketisation, the commercialisation of new areas of economic activity, must be allowed to proceed evenly across the territory.
This, of course, is exactly the same justification as that given for the EU’s own Single Market — “fair competition” on a level playing field.
But the same objection applies. A level playing field cannot be fair if the players themselves are of a radically different size. In the EU dominance by a few giant firms based in just two or three countries has led to increasingly uneven development and repeated financial crises. Across much of southern Europe the result has been mass unemployment, migration and EU-mandated austerity.
Britain is no different. Scotland’s recent experience shows that. Giant firms — or firms owned by the big financial conglomerates — dominate the economy. They come and go as their profit requirements dictate.
Rolls Royce is today shutting down its plant in Inchinnan — at the same time as expanding its investment in the US to maximise its share in the US armaments drive. A German private equity firm closed the Caley locomotive repair works in Springburn last summer as part of a wider consolidation and profit maximisation plan. Scotland’s one remaining bus manufacturer Alexander Dennis, acquired a few months ago by a Canadian firm, is now shedding hundreds of jobs.
So why is the British government now stripping away the Scottish parliament’s power to intervene and centralising powers already delegated back in 1998? There are three reasons.
First, in negotiating trade treaties with other trading blocks, particularly the US, it wants to be able to offer a full and comprehensive single market that can maximise the profits of their own big companies. Second, the Johnson government itself represents the interests of Britain’s big firms and the investment companies that control them. And third, and not least, because Johnson still seeks a deal with the EU.
The centralised regime proposed in the White Paper matches that currently administered by the EU. Negotiations with the EU resume on August 17. If a deal is to be reached, it will be through the compromise that is currently being discussed. The EU’s Competition Terms will be upheld — but administered by Britain and not by the EU Court of Justice.
This is why there is such a tight deadline for the White Paper. It was issued three weeks ago. Responses are due by August 13. The resulting Bill will go to Parliament in September to be passed by Christmas.
Does it matter? After all, the EU’s competition terms have already been operating for years. The Scottish government has repeatedly argued that it can do little to stop closures in Scotland — such as the Caley or Rolls Royce — because of EU state aid rules. Indeed, the reason why the pro-EU Scottish government wants to keep these powers is, paradoxically, so that it can maintain them as they are and therefore make it easier for an independent Scotland to return to the EU.
Yet it does matter. EU competition terms have meant radical de-industrialisation across whole areas of Europe. Britain itself now has the highest level of internal disparities in industrial development and productivity anywhere in Europe. The old industrial heartlands of England’s north and west show the scars.
The White Paper in fact recognises this and promises central government provision for “levelling up” development in the future.
This will, however, almost certainly be in terms of centrally negotiated infrastructure contracts for road, rail and IT communications that will simply permit further penetration by big business conglomerates. It will not result in locally rooted economic development — sustainable precisely because it is based in local democracy and with strong elements of regionally accountable public ownership.
The White Paper is therefore a challenge to the labour movement across the whole of Britain and not just Scotland or Wales. It is a direct counter to the vision of democratic, regionally driven industrial policy set out by Jeremy Corbyn. It is why all trade union organisations across Britain should be mobilising to demand a regionally accountable, democratic alternative and to oppose the proposals in the White Paper.
From a Scottish perspective it undermines attempts to make the Scottish Parliament a People’s Parliament, by robbing it of the very power to address economic decline. For Britain as a whole it attacks the fundamental principle of progressive federalism that sovereignty should be shared across the regions and nations and not centralised in Westminster.
John Foster and Vince Mills are joint secretaries of Radical Options for Scotland and Europe (ROSE), which has affiliations from a majority of Scotland’s local trades union councils.
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