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LABOUR'S NEW ROAD FOR THE SCOTTISH ECONOMY
While the Tribune-Tors pact was sabotaging the Devolution Bill, the Scottish Council of the Labour Party was publishing its new discussion paper on post-devolution industrial strategy.
The starting point of the new strategy is an admission that thirty years of government regional cconomic policy have failed. Scottish-owned manufacturing industry has been in decline since the Twenties, and nothing successive governments have done has reversed the trend.
This admission stems from a realisation that the end of the postwar boom has accentuated the crisis of the Whole British cconomy. The traditional regional policy of printing money as hand-outs to entice expanding firms from the prosperous Midlands to move to Scotland is at once rendered obsolete. There are few expanding firms left in the Midlands, In fact, cconomic decline and unemployment are relatively worse in the traditionally prosperous regions as British export markets fall.
Breaking sharply with the old policy of industrial mobility, the Scottish Council proposes a turn to stimulating local Scottish capitalism, especially small and medium-sized firms. Thus means "giving attention to the need for maintaining and even increasing profitability"
It adopts wholly new radical-sounding
phraseology. It calls for a turn away from
"macro-policy". In its place is proposed
what is called "micro-policy". The contentis the same, but the new form, when dressed
up with talk of worker participation, can
be presented as a radical form of socialist
planning. The major vehicle for this new
strategy is to be the Scottish Development
Agency, a state company which provides firms with cheap capital in return for a minority shareholding.
In repeated CBi surveys, Scottish firms
have reported lack of credit as more of a constraint on production than in the UK as a whole, never mind the fact that UK industry is itself starved of investment finance. Scottish banks will not lend long term to industry suffering a declining tate of return. The big Edinburgh
investment trusts pour money overseas where
it will find the biggest profit; their fastest growing lending market is Japanese business.
The Scottish Council suggests the SDA
make up for the anarchy of capitalist
financing by going "to the money market"
Le. borrowing at high interest rates from the banks and investment trusts and relending to industry at low rates, the
difference being met by taxing workers and
cutting spending on houses and schools
We do not deny that it is impossible to socialise the entire economy at one go. Further we agree that the key to controlling capitalist
firms is to control their credit. But not through bodies such as the SDA which merely interpose the government between the capitalist money-lenders and capitalist firms, The socialist alternative is the expropriation of the entire credit mechanism.
Nationalisation of the banks is official
Labour Party "policy" , though this is never
once mentioned by the Scottish Council paper. If a workers state controls credit it can monitor the entire functioning of private capital, cheap credit can be supplied where necessary without tax increases of spending cuts. Genuine aid can be given other nations instead of imperialist exploitation, Private firms' long term plans would be exposed and bent to the central socialist plan on paitor termination of working capital. Of course, the nationalisation of credit would require the mobilisation of the workers' movement something upon which the Scottish Council has yet to pronounce.
Another example of the verbal radicalism
of the Scottish Council's plan is a strident denunciation of the external control of the Scottish economy. The paper calls for all outside take-overs of Scottish firms employing more than 100 workers to be referred to the government. We are not told whether the governmert should say yea or nay. No wonder: for thirty years the aim of regional policy was to make it as easy as possible for the multinationals to move into Scotland.
In order to deal with existing multi-
nationals, the Scottish Council recommends "planning agreements". These are sereements between individual firms and the government whereby the firms are supposed to let the government know their investment, manpower and marketing intentions some years in advance.
Planning agreements have been presented by the Labour Left as a step towards socialist planning. In theory they force the multinationals to take to coordinated planning with a "socialist" We do not deny the need to deal with the government. multinationals. They have the technology and finance required in the carly stages of building socialism. What is at stake is the question of power: who decides the plan and who is forced to agree to it?
A planning agreement between a government accepting capitalism and a multinational, whatever episodic disagreements they may have, must be a capitalist agreement at the expense of the working class. Even at that, a national government Will always come off second best to the multinational company. The Scottish Council admits that "to the disappointment of many in the Labour Party the 1975 Industry Act was watered down to make (planning agreements) voluntary rather than compulsory" because the multinationals did not want their affairs pried into. A planning agreement between a government committed to the interests of the Scottish working class and a multinational would be a different matter. The power of the state over nationalised banks would be brought to bear. The question of who rules in the factory would he posed: workers? control, the right to monitor and veto the activities of the capitalist management. Since multinationals cannot be controlled on a national basis, the workers would enlist the trades unions internationally to supervise the internal workings of the multinationals. The Scottish Council hides behind vague notions such as planning agreements because it does not wish to take sides in the class struggle.
Proof positive of the Scottish Council's lack of seriousness over planning agreements shows up their attitude to the assembly. They propose the Assembly will "help formulate overall broad guidelines that industrial development policies in Scotland should follow but (1) the Westminsterappointed Secretary of State has final say over industrial matters, and (Il) the SDA will be independent of the Assembly, In other words, post-devolution Scotland has no powers over its own coonomy!
GEORGE KEREVAN
*"AN INDUSTRIAL STRATEGY FOR SCOTLAND", published by the Scottish Council of the Labour Party, March, 77
40pp. 25p.