The Tartan Venezuela

At the heart of the “Yes” to independence campaign has been Scotland's apparent desire to turn itself into a kind of tartan Venezuela: endless platitudes about aspiring to equality but more likely bringing misery; spending plans that would squander vast oil reserves on unproductive welfare; intolerance of opposing views often combined with threats to confiscate private property; apparent ambivalence over hugely disruptive economic policies including defaulting on its sovereign debt obligations should it not be allowed to keep the existing UK currency union and supposedly highly moralistic but profoundly demotivating levels of personal taxation. Hugo Chavez died last year but Alex Salmond’s Scottish nationalist movement is keeping the spirit of Chavismo alive.

Devolution was supposed to already deal with Scotland’s aspiration to remain socialist even when these policies were rejected by the rest of the UK. Whilst it might be undemocratic to begrudge Scotland its ability to economic self-harm should that genuinely be the will of the Scots people, its continued ability to inflict socialism on the rest of the country – and in doing so stymie economic growth prospects - is another matter. Applying Scotland's logic, it is profoundly undemocratic that England or indeed the home counties should suffer socialism when they – as opposed to the UK as a whole - consistently reject it at the ballot box. Yet according to current opinion polls this is exactly the most likely scenario at next May’s UK general election, where the Labour party is favourite to win with the most anti-business agenda since their infamous manifesto of 1983. Market concerns over UK political risk are unlikely to go away whatever the result of the Scottish referendum.
 
The Labour party has also now promised further devolution for Scotland including greater powers over taxation and public spending in a last ditch attempt to appease the nationalists without removing powers of Scottish MPs at Westminster. We now hear that the Labour party believes in English devolution as a solution to this lop-sided democracy to the extent that it is proposing to devolve significant powers to English cities: especially deprived English cities with lots of socialist voters. The bourgeois English - the engine of UK economic growth, contributing most of the UK’s tax base  -  continue to be disenfranchised. For socialists, devolution has never been about nationalism, more rigging the electoral system to ensure they are always in power even when they are out of power. In the absence of a less partisan approach, a constitutional crisis post the 2015 UK general election is now a genuine risk.   
 
Even if the “No” campaign wins the battle, the war for British democracy and its economic future has only just begun.

Barry Norris
Argonaut Capital
September 2014