Kill the Growth Commission. NOW.

by | 26 Sep 2022

As the UK financial systems melt down, the incompetent Growth Commission would drag us down with it. It must be disposed of immediately.

I’m in the middle of some very intense writing deadlines and hadn’t been planning to write anything today but I feel compelled to write a short piece in which I hope to hammer home one message (if it isn’t already patently obvious).

That message is that if you were sort of nearly convinced that the Growth Commission was an utterly incompetent and a disastrous ticking-time-bomb for an independent Scotland and might just about be made to work, you’ve picked up that you were wrong about that, right?

I’ve not seen chaos in Britain’s market position like we’re seeing right now since Black Wednesday. If you don’t get how bad this is the pound is plummeting and this means that mortgage lenders are stopping lending and supermarkets have announced that they may default on their debts. ‘Too mad for corporations and bankers’ is some achievement.

The Better Together squad and their various offspring have been trying to persuade us since 2012 that the UK is the grown-up in the room, the sane, sensible one. No amount of evidence can shake that belief – not the UK’s productivity figures, not its missing manufacturing base, not its balance of payments, not its continual desperate asset sell off, not Brexit – nothing.

Perhaps this might be a turning point for them, but would you bet on it? They’ll presumably claim this is just one crazy rogue chancellor and that it doesn’t prove anything other than that Tory Party members elected a crazy rogue government. That might stack up if the UK hadn’t been electing crazy rogue governments for a while now.

We were told the UK was a safe bet, a safe haven, a reliable nanny to look after us. It is no such thing and what is happening now ought to be like a full-on advert for the sanity of Scottish independence. But it isn’t – because of the Growth Commission.

Because the Growth Commission’s entire vision of the world is predicated on the idea that the UK is a safe bet, a safe haven, a reliable nanny to look after us. Its assumptions were that Scotland isn’t really a proper economy – not for the foreseeable future anyway – and the UK is, so we must cling closely to the UK while we slowly (and in the Growth Commissions vision of things, painfully) drag itself up to being a proper economy.

I don’t disagree at all with the basic point that Scotland isn’t a proper national economy – it isn’t, because Scotland is a regional economy subservient to a larger national economy run in London. It’s the assumption that the way from here to there is to cling on, squeeze public spending like crazy and ride the UK’s financial coattails to a new future where we very, very sharply disagree.

Cutting demand in a period of development is economic suicide and how the Growth Commission was ever able to punt this idea is beyond me

Like any start-up enterprise a newly independent Scotland would need to invest to transform and build. This should be a no-brainer for someone who has had even a quick glance at an economics text book. Cutting demand in a period of development is economic suicide and how the Growth Commission was ever able to punt this idea is beyond me.

How wasn’t it challenged by the media? Is it purely because Scotland’s media doesn’t seem to have anyone in it who understands economics, never mind the complexities of monetary policy? What outcome did anyone think choking off demand in the early days of independence would have? Did no-one model it?

The problem is that the Growth Commission may have been clearly incompetent but, like so much else, the SNP leadership didn’t treat it like a serious policy at all but as part totem, part test of strength.

Totem poles are religious symbols at the feet of which you leave offerings, thereby hoping to influence the spirits which shape the world. The Growth Commission wasn’t seen by the leadership as something which had to work (or actually would) but as a message to its friends in the big business sector that it had nothing to do with all that 2014 ‘another Scotland is possible’ business.

People who should have known much, much better said they would give it the benefit of the doubt as a means of winning over the middle classes. This really was a low point in many low points for independence. The only justification was that it might somehow win over voters that for some reason really like bankers.

But much more to the point, the SNP leadership didn’t actually like the Growth Commission. It was the totem they wanted but they modelled its austerity (well, they didn’t model anything, the fiscal constraints are spelled out) and didn’t like the look of it. We know this because they briefed to that effect and sat on the report for months until they were basically forced to publish.

Even the, realising how toxic it was they kept well away. It was launched on a public holiday and there wasn’t anyone from the SNP leadership within a mile of it. They made clear this was a ‘contribution’. But then they started getting questioned during the Sunday political programme round and did what they always do – defend, defend, defend.

It then became a test of virility – the leadership had to beat the rebels trying to prevent the Growth Commission becoming party policy not because the policy was good but because the leadership must never be defeated.

I cannot say this enough – in more ways than you can count, the single biggest liability to case for independence is the Growth Commission

The legacy of this idiocy (and it is idiocy to base the prospects for independence on short term party management issues) is plain to see. It is three-fold.

First, it is crazy-sounding if you say it – Scotland wants to use an experimental currency system which is not and has never been used by any major economy. Of the four tiny or underdeveloped economies which do follow the Growth Commission and use someone else’s currency at least one had to seek an IMF bailout during the pandemic. Exactly like Common Weal argued Scotland would if it hit a crisis while Sterlingised.

Second, it tied us totally and completely to the UK’s monetary – and by extension fiscal – policies. There are two many reasons to explain why this is a very, very bad idea to go into here. But let’s just be clear – if we’d followed the Growth Commission and were independent and Sterlingised right now, we’d be choosing between an IMF bailout and scrambling the launch of a makeshift currency overnight.

Thirdly, it leaves us absolutely nothing to say about anything which is happening. We’re on the wrong side of the cost of living crisis because under Growth Commission economics the cost of living crisis would be worse in Scotland but we’d be compelled to keep cutting spending anyway. And we’re on the wrong side of hammering home the madness of this current crisis because we would have locked ourselves into it.

I cannot say this enough – in more ways than you can count, the single biggest liability to case for independence is the Growth Commission. It now lacks all credibility and everyone involved should hang their heads in shame. I’d list them but I promised to try and keep this brief. I barely even have the space to say I Told You So (but can’t resist).

But there is only one rational choice to be made now. At its October conference the SNP must kill the Growth Commission once and for all. Otherwise, it will kill us.

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