Towards the break-up of Britain?

Issue: 143

Alex Callinicos

Creeping up on the British state is potentially its biggest internal crisis since the struggle for Irish self-determination reached its climax a century ago. The outcome of the referendum on Scottish independence on 18 September could tear a huge chunk out of the United Kingdom, rendering its very name a joke, with major geopolitical, economic and domestic political consequences. Barack Obama recently acknowledged the high stakes involved, declaring during the D-Day commemorations in early June the United States’ “deep interest in making sure that one of the closest allies that we will ever have remains strong, robust, united and an effective partner”.1 Carl Bildt, the influential Swedish foreign minister, has warned of the damaging impact on the European Union (EU) of “the Balkanisation of the British Isles”.2

This journal goes to press over two months before the referendum takes place. So it is impossible to make any serious prediction about the result. The polling trends in late 2013 and early 2014 showed a marked narrowing of the gap between the Yes and the No camps. But in mid-June John Curtice of Strathclyde University wrote: “It has appeared to be the case for some time now that the referendum race has become becalmed once more. The Yes side appear to have maintained the gains they made in the winter, but without any consistent evidence of them having made any further subsequent progress.” His own poll of polls stands at Yes 42 percent, and No 58 percent.3

Polling evidence is in any case highly uncertain, in particular because of the large number of don’t knows (as high as 30 percent in some polls) and because the turnout could have a big impact on the outcome.4 But the referendum has unquestionably unleashed an intense political debate in Scotland. Commenting on one poll, Curtice writes:

But what perhaps is the most remarkable finding is the degree to which the referendum is now being talked about throughout the length and breadth of Scotland. No less than 60 percent of all Scots say that they have talked about the referendum with family and friends. This is probably the clearest quantitative indication we have had yet of the extent to which the independence debate has become a “hot topic” of everyday conversation in Scotland. It of course also means that a potential process of persuasion is in progress over which neither campaign has any direct control.5

There is little doubt that this rolling, open-ended debate is working in favour of the Yes Scotland campaign, headed by the Scottish National Party (SNP) and its leader, first minister Alex Salmond. Yet another poll reported that 51 percent of voters found Yes Scotland the more effective campaign, compared to only 23 percent who chose Better Together, the pro-Union campaign.6 The Unionist frontman, Alastair Darling, ex Labour chancellor of the exchequer, has been reduced to whining about a “culture of intimidation” stirred up by online “cybernats” and comparing Salmond to the defunct North Korean dictator Kim Jong-il.7

No wonder the British ruling class is getting worried. The Financial Times offers the best barometer—since the beginning of the year it has been providing regular, detailed and in-depth coverage of the economics and politics of the referendum debate. This reflects the growing sense that British capitalism is entering uncertain seas. The combination of the drive more tightly to integrate the eurozone in response to the crisis and the rise of UKIP threaten to push Britain out of the EU at the same time that the Scottish referendum has put into question the very survival of the UK state.

So why is the Union now in danger and what stance should revolutionary socialists take on the question of independence?

Centrifugal forces

The 1707 Act of Union between Scotland and England tied a weak and venal feudal aristocracy to the fortunes of a fast-rising capitalist power, what T M Devine calls “one of the most aggressive and expansionist nation states in Europe”.8 Caught between the global rivalry of the English state, which had been boosted by the bourgeois revolutions of 1640 and 1688, and, at the pinnacle of the old regime, French absolutism, the Scottish ruling class decided to throw their lot in with the former. In exchange they were allowed access to the rapidly expanding English market (critically including the colonies) and retained control of their own legal, educational and religious institutions. The graft nearly didn’t take: only after the second French-backed Jacobite rising of 1745 did the Great British state, in alliance with Scottish capitalists and their intellectual representatives (an important contingent of the European Enlightenment), carry out what Antonio Gramsci would call a “passive revolution”, systematically transforming Scotland’s political economy along capitalist lines.9

The beneficiaries of this restructuring of economic and social relations could partake of what Neal Ascherson calls the “luscious opportunities” of empire opening up thanks to the expansion of British global power in the second half of the 18th and first half of the 19th centuries.10 Ascherson argues:

It’s a cliché that the Scots “punched above their weight” in the empire, and it’s misleading. They seldom competed directly with the English or Irish, but established distinct and almost exclusively Scottish fiefdoms: the fur trade, the tobacco trade, the jute industry, the opium business in China, the “hedge-banking” outfits in Australia, the executive levels of the East India Company. Later in the 19th century, in the second phase of industrialisation, the Clyde basin achieved something approaching world domination in shipbuilding, locomotive and bridge construction, and other branches of heavy engineering. Overseas enterprise was a pattern of near monopolies from Scotland’s regions. The Hudson’s Bay Company was staffed by Orcadians; its Canadian rival, the North West Company, was run by Highlanders; the sugar plantations of Jamaica were packed with younger sons of Argyllshire lairds; the great trading houses of South East Asia were mostly family businesses from Aberdeen and north east Scotland; the outflow of foreign investment was cornered by Edinburgh solicitors.11

Scottish capital was thus a full partner in the expansion of British imperialism. This embraced deep involvement in the slave plantations of the Caribbean and American South. According to Devine: “the sugar, tobacco and cotton produced by these slave-based economies were absolutely central components in Scottish overseas commerce for most of the 18th century, and the dominant factors in the country’s international trade to a much greater extent than even the equivalent sectors south of the border.” Scottish regiments, drawing on a centuries-old tradition of mercenary service all over Europe, provided “the military cutting edge of the British Empire”.12 The Highland Clearances of the 18th and 19th centuries—the mass eviction and forced emigration of peasant crofters—were largely the work of “improving” Scottish landowners often based in the lowlands and increasingly appealing to racial theories of Celtic inferiority. By the late 19th century, from its huge heavy-industrial base on the Clyde, Scottish capitalism was exporting goods and investment on a massive scale to key imperial markets in North America, south and east Asia, and Latin America.

But this great industrial complex fell victim to Leon Trotsky’s law of uneven and combined development. What had been advantages subsequently became obstacles. Devine argues that even before 1914 Scotland was missing out on the third industrial revolution, as capital flowed overseas in the absence of domestic opportunities:

The strategic weaknesses of the extraordinarily successful Scottish heavy industry economy were now revealed in stark detail. The achievement had been built on low wages and the interlocking critical mass of shipbuilding, engineering, coal, iron and steel, which fixed the economy into the past rather than creating fresh opportunities for the future. Despite some attempts, the “new” consumer-based manufactures (household goods, electrical products, motor cars and cycles), which were expanding south of the border, did not take off in Scotland because of the levels of relative poverty among the mass of the population and the small size of the domestic market. The nation, therefore, missed out on the next big stage of economic development.13

Scotland was therefore particularly vulnerable to the great crisis of Britain’s staple export industries in the inter-war years. This didn’t, however, mechanically put the Union under strain. This was in significant part thanks to the rise of the Labour Party, which represented a version of Unionism based in the working class created by Scotland’s industrialisation and offering a programme of reforms—most notably expressed in the post-war nationalisations and the creation of the welfare state by the 1945-51 government. It was only the unravelling of the long boom of the 1950s and 1960s that allowed the SNP to emerge from the margins electorally. The take-off of the North Sea oil industry during the 1970s allowed the nationalists to campaign around the slogan: “It’s Scotland’s Oil!” A weak Labour government under James Callaghan conceded the 1979 devolution referendum, a fiasco that contributed materially to the government’s eventual fall.

But it was the experience of Thatcherism in the 1980s that politically supercharged the questions of devolution and now independence. To the suffering caused by the devastation of manufacturing industry in the early 1980s was added the deep offence of suffering neoliberal policies imposed from London by a Tory government with dwindling support north of the border. The poll tax—tested first in Scotland before being implemented in the rest of Britain—capped this political humiliation. A Labour Party in which many Scottish MPs, including John Smith (party leader 1992-4), played a prominent role, now embraced devolution. This policy was implemented rather grudgingly by Smith’s successor, Tony Blair, after another referendum endorsed devolution in 1997. With an electoral system designed to prevent the SNP from winning a majority, the new parliament at Holyrood looked set to entrench Labour’s dominance of Scotland.

Yet now it is Salmond who is in the ascendant, political master of Scotland leading the drive towards independence. His tactical mastery is legendary, but the truth is that history has dealt him a good hand—above all in the Westminster governments that he has had to deal with. In the first place, New Labour was of course the continuation of, rather than a break with, Thatcherism. So neoliberal policies continued to be exported to a Scotland where Unionism had already been seriously weakened by the precipitate decline of Scottish Toryism under Margaret Thatcher and John Major. The unpopularity of the Iraq war north of the border fed a sense of Scotland’s lack of political representation.

At the same time, Labour’s top Scottish politicians—Gordon Brown, Robin Cook, Darling—preferred cabinet office in London to service in the Holyrood executive, leaving behind mediocrities highly vulnerable to Salmond’s skilful fusion of Scottish nationalism with invocations of traditional social democracy. Meanwhile, the crystallisation of a distinctive political order in Scotland helped to reinforce the growing sense of a separate Scottish identity for which the religious, educational and juridical autonomy established under the Act of Union had long provided the raw materials.

But undoubtedly it was the victory of the Conservative-Liberal coalition in the British general election of May 2010, against the background of the global economic and financial crisis, that tilted the balance in Salmond’s favour, allowing him to turn the minority SNP government elected in 2007 into a majority government in the 2011 Holyrood elections. This wasn’t simply a direct consequence of the crisis itself: once again politics has played a decisive mediating role. We have seen an analogous situation develop in the Spanish state, where the election in November 2011 of a hard right wing Partido Popular (PP) government committed to driving through austerity has stimulated a powerful movement in Catalonia for a referendum on independence.

Similarly, the return of a Tory prime minister in Westminster, lacking even the legitimacy that parliamentary majorities gave Thatcher and Major and forcing through ferocious austerity measures, allowed Salmond plausibly to complain that the coalition represented the denial of Scotland’s self-determination and also to project the SNP as the defender of the welfare state against neoliberal vandals. The potency of the anti-Tory card is shown by a June poll for the Daily Record suggesting that Scottish voters would split 44 percent Yes and 38 percent No if they were sure that Cameron would remain UK prime minister.14

But Salmond has been lucky, not just in his circumstances, but in his opponents. While the PP government, bent on reasserting traditional Castilian nationalism, is blocking a Catalonian referendum, it was the Unionist parties that initiated the demand for a referendum on Scottish independence. Salmond seemed vulnerable after his initial economic model for an independent Scotland—provided by small northern countries such as Ireland, Iceland and the Baltic states—came a cropper in the 2007-8 crash. The Unionists argued that Salmond was content with running Scotland within the UK and had given up on independence as a serious option.

It’s putting it mildly to say that he has turned the tables on them. In a further sign of Unionist ineptitude, Cameron vetoed the proposal by Scottish civil society organisations that the referendum include the option of “devo-max”—ie Scotland staying within the UK, but with greater autonomy. Now, on the run in the face of the Yes campaign, the Tories, Labour and Liberal Democrats have all promised that, if independence is rejected on 18 September, Holyrood will receive more powers, particularly to change the rate of income tax (though Labour opposes Scotland being able to lower it, on the grounds that this might encourage “a race to the bottom” to attract foreign investment).

This concession has been a blip in a relentlessly negative campaign mounted by Better Together, which has concentrated on scaring Scottish voters with the prospect of economic catastrophe in the wake of independence. Many megabytes have been devoted to detailed arguments over economic data and the future of North Sea oil and gas (which is, predictably, talked up by the Yes campaign and down by the Unionists). A study commissioned by the Guardian argues that the data for Scottish GDP (which per capita is higher than that for the UK as a whole) are distorted by the high level of foreign ownership (especially in the oil and gas and whisky sectors) and that Gross National Income (GNI, final goods and services produced by locally owned enterprises) is a better measure of the standard of living. But the study confirms that “Scotland’s standard of living is on a par with that seen in the richer OECD countries” and concludes:

Even if Scotland’s standard of living is higher [than the UK’s], as is suggested by the Scottish Government’s GNI estimate, this position would not change post-independence, it simply means that Scots already have this higher standard of living, which has come about during a period when the Scottish economy was working within the United Kingdom. So while it would not change living standards pre versus post-independence, current Scottish Government GNI figures would suggest that Scots, or at least a few of them, are substantially more wealthy than had previously been supposed, with a positive knock on impact for post-independence viability.15

This hardly suggests that independence will usher in a new dark age. One of the main thrusts of the SNP campaign is to counter the scaremongering by offering continuity. So the monarchy will stay, along with membership of the EU and NATO (though not the Trident nuclear missile submarines based at Faslane). The trickiest issue is that of the currency. After the implosion brought on by the financial crisis, the euro is no longer an option. Restoring the pounds Scots might make the new state vulnerable to the inflows and outflows of capital that proved so devastating for small economies such as Iceland in 2007-8.

So the SNP has opted for a continuing currency union with the rump UK. This is a problematic policy for any serious project of self-determination, since it would leave Scottish finances subject to monitoring by the Bank of England, which would continue to set interest rates and control monetary policy. This is why the Socialist Workers Party supports an independent Scotland having its own currency. But the Unionist parties effectively rescued Salmond by taking the astonishing concerted step in March of ruling out currency union with an independent Scotland, which gave the SNP the easy option of denouncing them for ganging up on and bullying the Scottish people.

For all Salmond’s efforts at reassurance, however, big business north of the border is not comfortable with the prospect of independence. In April the bosses’ organisation the CBI was forced to cancel its registration as a No campaigner with the Electoral Commission after a number of companies, universities and media organisations resigned in protest. But business big guns have been firing warning shots at the pro-independence camp. In February, as the Yes campaign advanced in the polls, Standard Life savings and investments warned that it might move some operations to England in the event of independence, RBS chief executive Ross McEwan conceded a Yes vote might have implications for the bank’s Edinburgh HQ, and Bob Dudley of BP said: “Great Britain is great and it ought to stay together”.16

Predictably enough, the future of the financial sector is a critical issue. One distinctive historical feature of Scottish capitalism was the formation of a highly innovative cluster of banks and insurance companies centred on Edinburgh that played a critical role in organising the late 19th century outflow of capital, for example pioneering the investment trust.17 This cluster has flourished while the heavy industry complex with which it was twinned withered. Finance and associated professional services account for more than 13 percent of Scottish GDP and employ 148,000 people, 6 percent of the workforce. Scotland’s life insurance and pensions industry is responsible for 24 percent of UK employment in the sector, even though its population is 8.3 percent of the UK total.18 The assets of the financial sector amount to twelve and a half times Scottish GDP.19

Aye, there’s the rub. The ratio of the main Icelandic banks’ assets to GDP at the height of the mid-2000s bubble was only eight to one.20 The Scottish version of this bubble saw RBS bloat into a vast global bank (swallowing NatWest along the way), swelling briefly to become (by assets) the biggest company in the world, before abject collapse in the autumn of 2008, when rescue and eventual nationalisation by the Labour government came within hours of RBS running out of cash for its ATMs.21 The argument that, without the backing of the British state, Scotland’s globalised financial industry could run into an Iceland-scale crisis when a future bubble bursts is one that will keep many Scottish bosses clinging to the UK connection.

Against the Great British imperialist state

So what’s at stake in the Scottish referendum? The deep involvement of Scottish capital in the upward arc of British imperialism makes any attempt to portray the Scottish people as victims of national oppression comparable to that inflicted on the Irish quite implausible. Ordinary people in Scotland have suffered at the hands of the British state no less but also no more than their counterparts in England or Wales. It was the long 20th century decline of British imperial power that provided the context in which the continuous reign of neoliberal governments in London for the past 35 years has helped prise open the connections binding Scotland to the UK.

But no one should imagine that the SNP offers a real alternative to policies devised in Westminster. On the contrary, Salmond provides neoliberalism lite—broadly the same package moderated by sufficient reforms both to differentiate the Holyrood executive from the Unionist parties and to appeal to the reformist consciousness historically represented by Labourism. His plans for an independent Scotland to cut corporation tax suggest that, despite the economic catastrophe of the past seven years, low-wage high-export Ireland continues to be a model the SNP seeks to emulate.

Much more than its Scottish leaders’ ineptitude, it is Labour’s embrace of domestic neoliberalism and imperialist war that has created the space that Salmond has sought to fill. Equally, of the Unionist parties it is Labour that faces the most mortal threat from a victory for the Yes campaign on 18 September. Without the phalanx of Scottish MPs at Westminster on which it has traditionally relied, Labour would find it harder (though not impossible) to form a UK-wide government. Hence the tacit agreement among the Unionists to allow Labour to take the lead in Better Together—although Gordon Brown’s attack on Cameron for running too negative a campaign against independence could apply just as well to Darling.22 And Scottish Labour is split, with a significant minority mainly on the left supporting Labour for Independence.

For a Tory party with only one MP north of the border that is strongly tempted to retreat into Europhobic Little Englandism, Scottish independence is far less of a direct political threat. But this doesn’t mean that Cameron can afford to lose the referendum. After all, the Tories’ official name was for many years the Conservative and Unionist Party, which is how the Scottish Tories still describe themselves. He could never live down “losing Scotland” at a time when the British state’s global position is threatened both by austerity-dictated military retrenchment and by the eurozone’s growing integration.

The loss would be more than symbolic. Scotland has long played an important role in the British state’s ability to project power, both through the regiments it provides the army and the naval bases that allowed Britain to dominate the North Sea and now house the Trident missile fleet. In April the First Sea Lord, Admiral Sir George Zambellas, wrote: “Independence would fundamentally change maritime security for all of us in the United Kingdom and damage the very heart of the capabilities that are made up of the Royal Navy, the Royal Marines, the Royal Fleet Auxiliary and the Fleet Air Arm”.23

This extraordinary political intervention by a serving officer followed reports last year—repudiated by Downing Street—that the Ministry of Defence was drafting plans, in the event of independence, to turn the Faslane submarine base into a Sovereign Base Area comparable to those Britain still retains in Cyprus.24 The precedent of Crimea—retained as the base of the Russian Black Sea fleet after Ukrainian independence but seized by Moscow in March—is hardly a promising one for such arrangements.

But beyond these specific concerns about the impact of independence on British military capabilities lies the danger that Scotland’s separation could precipitate a step-change in which the British ruling class is forced to face up to its diminished position in the world. It is this that lies behind, for example, speculation about the impact of Scottish independence on the rump UK’s membership of the EU and of the UN Security Council. Hence Obama’s intervention, where he stressed Britain’s role in the EU:

With respect to the EU, we share a strategic vision with Great Britain on a whole range of international issues, and so it’s always encouraging for us to know that Great Britain has a seat at the table in the larger European project… And it’s hard for me to imagine that project going well in the absence of Great Britain.25

One of Lenin’s most important lessons was that the national question must be approached politically. Imperialism represents the global domination of capital, but, because this domination is expressed in a process of uneven and combined development, it gives rise both to geopolitical rivalries and to political antagonisms within states. The Scottish people have not suffered national oppression at the hands of the UK state, but they are asserting their right to self-determination. This right cannot be denied them.

Of course, defending the right to self-determination does not settle how this right should be exercised. So should Scotland separate? Answering this question depends on what we identify as the key issue at stake in the referendum. The preceding analysis should have made amply clear that in question is whether the United Kingdom should survive as a globally active imperialist power. Posed in these terms, the answer is a no brainer: of course it shouldn’t!

Calling for a Yes vote in the referendum on this basis implies no support either for the SNP or for Scottish nationalism more broadly. Salmond’s economic orthodoxy means that the struggle against austerity will have to continue in an independent Scotland. One of the striking features of the political effervescence produced by the referendum debate has been the role played by the left in the pro-independence campaign. The independent socialist leader Tommy Sheridan’s Hope Over Fear speaking tour had up to 12,000 working class people packing out meetings all over Scotland to hear the left case for independence.

This is merely one facet of an unprecedented, diverse and active grassroots campaigning movement in which progressive organisations—the Radical Independence Campaign, Women for Independence, the SWP—have been playing an important role. More than 2,000 people have signed up to National Collective, which is running an arts tour called Yestival over the summer. This movement can strengthen anti-imperialist and anti-austerity politics in Scotland whatever the outcome of the referendum.

The demand for the right to national self-determination is, as Lenin stressed, a tool in the internationalist struggle against imperialism. This means that, if Scotland does vote Yes on 18 September, socialists on both sides of the border will be working hard to maintain the unity of UK-wide working class organisations. Solidarity between workers in England, Scotland and Wales should not be contingent on their being subject to the same state. In this respect, maintaining the unity of the workers’ movement in Britain after Scotland becomes independent could be a microcosm of what the anticapitalist left and working class organisations must achieve on a much larger scale in their struggle against global capitalism and imperialism.


1: Thanks to Iain Ferguson, Donny Gluckstein, and Keir McKechnie for their comments.

2: Milne, 2014.

3: Curtice, 2014. Curtice actually puts the figures the other way round-No 42 percent, Yes 58 percent, but it is easy to check that this sensational figure is a mistake.

4: Thrasher, 2014.

5: Curtice, 2014.

6: Dickie and Pickard, 2014.

7: Cowley, 2014.

8: Devine, 2011, p2.

9: Davidson, 2003 and 2009.

10: Quoted in Devine, 2011, p6.

11: Ascherson, 2011.

12: Devine, 2011, pp37, 26.

13: Devine, 2011, p249.

14: Clegg, 2014.

15: McLaren and Armstrong, 2014.

16: Pickard, Clark and Chazan, 2014.

17: Devine, 2011, chapter 11.

18: Dickie, 2014.

19: Fleming, 2014.

20: For a superb account of the Icelandic catastrophe, see Wade and Sigurgeirsdottir, 2010.

21: For the Treasury view of the rescue, see Darling, 2011, especially chapters 6 and 7.

22: Carrell, 2014.

23: Zambellas, 2014.

24: Watt, 2013.



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