Scotland & the EU ScotRef

Labour’s switch to federalism, a stepping stone to independence

I can see the appeal of federalism to Labour in Scotland. The SNP have stolen their role as the protector of ordinary hard-working folk and the Conservatives are proudly wearing the mantle of champions of Unionism, which is ironic as Labour since and not the Tories maintained the Union in 2014.

Labour need a clear statement on the Union but can’t admit they were wrong and back independence. So they have dusted off the golden oldie policy of Home Rule – let’s call it federalism, something they mistakingly think can offer the best of both worlds. It is essentially another offer of more powers and they are hoping that the people of Scotland will warm to a half hearted compromise and so Labour seem genuinely excited by the idea. However they seem to have failed to notice the elephant in the room – the elephant, the rhino, the giraffe, the beached blue whale and the giant neon sign flashing with the words “Don’t do it, its political suicide”.

As an independence supporter I hoped Labour would provide this key stepping stone to independence. With the Scottish council elections looming, and especially with the latest poll suggesting Labour are in big trouble with only 14 per cent support, Labour had no choice but to pick a constitutional stance and back it to the hilt.

But federalism has two huge political and tactical flaws. Firstly, Labour are about to tell every household in Scotland that the Union is no longer fit for purpose and offer them a highly complex federalist solution that is actually impossible to implement. They are dong this just as the Scottish FM is about to offer a referendum to reject that failing Union on the basis that, as Alex Rowely Deputy leader of the Labour party in Scotland said; “I do not believe the current constitutional settlement within the UK is sustainable or effective”.

Add to that the fact that Labour, (despite being seen as the guarantor of the referendum promises of more powers and The Vow), proposed the least impressive offer of powers to the Smith Commission and were even trumped by the Tories’ submission. Who will believe them this time?

Federalism is not a smart offer in today’s reality for two main reasons. Firstly, while independence is a matter for the people of Scotland, federalism would have to win a UK-wide referendum. Thus concluded a House of Lords report on the constitution, and anyway Labour have no power to offer such a referendum. It would take a miracle for them to win at Westminster for at least a decade.

Also federalism misreads the mood in England and would be a General Election vote loser – why would England vote for it if the current Union suits them fine and the only problem it addresses is Scotland’s independence?

Kezia Dugdale is effectively suggesting a “new Act of Union” with a right-wing, isolationist Westminster elite who will have denied Scotland access to the European single market costing 80,000 Scottish jobs, probably causing a recession and unbearably high inflation – a real vote loser in Scotland.

It would also require Labour to make an actual positive case for the Union and they couldn’t figure out what that was in 2014 hence  Project Fear, and that was before Brexit undermined even the most tedious of arguments.

The second big problem with federalism is that the policy is about to become redundant. The Scottish Government’s paper on Brexit, as well as asking for Scotland to retain access to the single market while the rest of the UK left, also included a less well reported but possibly as important section on the new powers Scotland would require to have devolved after Brexit. It stated that new powers required to be devolved: such as employment law, including those on trade union rights, equalities, health and safety at work and consumer protection and key economic levers such as control over import and export control, immigration, competition, product standards and intellectual property, company law and insolvency, social security, including to enable reciprocal arrangements with other states, professional regulation (for example to enable recognition of professional qualifications), energy regulation and financial services, telecommunications, postal services and reserved aspects of transport.

Now that’s a big list and lot of really useful powers – but it’s still not even Devo Max, its a long way short of federalism and nowhere near full fiscal autonomy.  Within the next few weeks Theresa May will trigger Article 50 and totally reject the federalism-lite option Nicola Sturgeon has said would take independence off the table. So indyref2 will be justified, not just by a hard Brexit but by an absolute rejection of a watered down version of Labour’s grand vision.

To be clear, offering federalism when its has already been rejected will be a bigger millstone around Labour’s neck than a rejected currency union was for Yes in 2014. Westminster is a symbol of British nationalism and so Westminster-centric power and not federalism is the constitutional partner of the idea of a post Brexit return to pseudo imperialism currently driving English and Welsh politics.

The final problem with Labour’s conversion to federalism is that although it solves Labour’s need for a unique position on the Scottish constitution, that is the wrong focus.

It won’t solve the huge problem of Brexit-led job losses, and inflation which will hit Labour voters harder than it will most Conservative voters. The pound has fallen 16 per cent and that means that all food, clothing, manufactured goods and electronic equipment imports will cost more, and so inflation is set to rise rapidly. Deutsche Bank are predicting a further 16 per cent fall post-Brexit for Sterling, driving the pound down to parity with the Euro and almost parity with the dollar. Not only will your holidays be as much as 30 per cent more expensive, inflation at home will reach double figures. The Joseph Roundtree Foundation predict a 10 per cent rise in the cost of living within three years, pushing four million UK citizens into poverty, which will slam the breaks on economic growth and probably cause a recession. Independence on the other hand, with access to the single market and far more economic levers than even federalism can offer, coupled with the right economic plan for prosperity in an independent Scotland, could not fail to offer more economic security than a post-Brexit self-destructing UK ever can.


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About the author

Gordon MacIntyre-Kemp

Gordon MacIntyre-Kemp is the Founder and Chief Executive of Business for Scotland. Before becoming CEO of Business for Scotland Gordon ran a business strategy and social media, sales & marketing consultancy.

With a degree in business, marketing and economics, Gordon has worked as an economic development planning professional, and in marketing roles specialising in pricing modelling and promotional evaluation for global companies (including P&G).

Gordon benefits (not suffers) from dyslexia, and is a proponent of the emerging New Economics School. Gordon contributes articles to Business for Scotland, The National and Believe in Scotland.

1 Comment

  • I m sure the uk will be bankrupt within 2 years we are 2 trillion in debt and we haven’t paid a penny off Scotland needs to get out before this happens

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