As the UK’s economic model flat-lines, new visions of a progressive political economy – rooted in our cities, regions and sub-national spheres – become more significant
In a recent blog post Colin Hay argued that this is a ‘very British crisis’ in the sense that successive UK administrations actively promoted – domestically and internationally – the unsustainable model of Anglo-American capitalism which led to the crash of 2008.
This is also a ‘very British crisis’ in a second sense. Neoliberalism within the UK has compounded structural weaknesses within the peripheral economies of the North of England, Wales and Scotland. After the decimation of industry in the 1980s, these areas have suffered from chronic under-investment, higher levels of unemployment and associated social problems.
Hay is right to say that this is a British crisis. But we must at the same time be clear about which economic and social groupings benefited from neoliberal growth – and which are paying for it – now that the ‘virtuous’ cycle of debt and false prosperity has spiralled into a vicious cycle of decline.
The UK’s broken growth model should have ‘Made in the City of London’ stamped on it.
While the Square Mile’s activities were deregulated, and it was given carte blanche to engineer growth through paper assets and international Ponzi schemes, the UK periphery found itself enduring some of the weakest labour market protections in the OECD. Many areas outside of the South East have seen systematic neglect of industrial capacity and the proliferation of low-skill, low-wage employment.
Progressive political economy should recognise that uneven development generates a series of new political spaces from which the old economic orthodoxies can be contested. The clearest expression of current regional disaffection comes in the form of a constitutional challenge against the British state; the 2014 referendum on Scottish independence. This process raises a new question: will the British growth crisis translate into a crisis of Britain?
Nationalism is often viewed with suspicion on the Left, because it’s seen to be rooted in parochial identity politics. But this view fundamentally misunderstands the political roots of the project for Scottish self-determination.
Scottish ‘small ‘n’’ nationalism has been rooted in a social democratic impulse against the worst excesses of neoliberal marketization. The movement for Scottish devolution, for example, was conceived as a response to the market-led strategy of successive Conservative administrations.
Thatcher’s aggressive use of parliamentary prerogative to implement the New Right project – irrespective of its social consequences – was perceived as an attack on the fabric of Scottish society and implied a ‘democratic deficit.’ Unemployment doubled under her watch while industry stagnated – in spite of the fact that Scots had consistently rejected the Thatcherite project at the polls.
When devolution arrived in 1999, the Scottish parliament became a new sphere for the expression of the Scottish electorate’s political aspirations. The parliament enabled Scotland to continue providing social goods, including free tuition in higher education, the abolition of prescription charges and free day care for the elderly. While the neoliberal growth model delivered an expansion in public expenditure, these social programmes could continue apace, further legitimising devolution and, by implication, the British state.
Austerity has changed all that. Now we’re told that the ‘golden years’ of New Labour’s boom are over, there’s no alternative but to cut-back on the debt through a radical programme of public sector retrenchment. By 2025 the Scottish budget will be slashed by a massive £40 billion. As a result, the considerable social achievements of the Holyrood parliament are now under serious threat.
The question of the UK’s broken growth model has fused with the debate around its constitutional future. A recent Institute for Fiscal Studies (IFS) report was brandished by both unionists and nationalists as vindicating their respective positions. It’s the unionists who’ve tended to emphasise the uncertainties and ambiguities of Scottish independence. But As Stephen Maxwell’s new book of pragmatic and progressive nationalism Arguing for Independence demonstrates, remaining in the union is itself an inherently risky strategy.
We face in the short-term a triple-dip recession, and in the longer term a ‘lost decade’ of low, if not negative growth. As a result of this process, the welfare state and public sector will have been hollowed out, with corresponding ‘flexibilisation’ (read – attacks on pay and conditions) in the private sector. The risks of staying in the union – under a deeply unpopular Conservative party which has no Scottish mandate – could well be one that the Scots are not willing to take in 2014.
The problem for the pro-independence left is that the SNP are not currently emphasising this argument. However, the Nationalist Party does not have a monopoly over the movement for independence. This weekend, Greens, pro-independence Labour members, trade unionists, left nationalists and socialists will attend a large ‘Radical Independence Conference’ in Glasgow.
The conference signals that the Scottish left is increasingly unified around the need to emphasise the risks attached to remaining within the union. The internationalist case for independence – which advocates the abolition of the Trident nuclear weapons system, massive reductions in military expenditure, and the promotion of a new state-led green industrial strategy – could work as a radical and progressive alternative to the status quo.
As the UK’s economic model flat-lines, new modes of resistance – and new visions of a progressive political economy – rooted in our cities, regions and sub-national spheres become more, not less, significant. The ‘Scottish Question’ stands at the apex of this breaking point in the UK’s uneven political geography. As the constitutional decision draws closer and the effects of the Conservative’s aggressive programme of austerity bite harder, the next casualty of the British crisis could turn out to be the British state itself.