Jonathon Shafi

Jonathon Shafi

Bought and Sold for Corporate Gold

Reading Time: 9 minutes

Jonathon Shafi argues that the sale of Scotland’s renewable energy to private corporations is a serious impediment to independence.

This is an abridged version of a newsletter from Independence Captured.

In the last referendum, the independence movement had opposition to austerity at its core. Now, a society scarred by cuts faces a protracted economic crisis. This crisis is a global one, and is the backdrop to the national question in 2022. Yet the Scottish Government’s “scene setting” paper fails to deal with the challenges of the era, preferring to rehash old arguments from a different time.

One of the key arguments at the present moment is around energy. Finally, the First Minister has agreed that public ownership should be “on the table” for the UK Government’s consideration. But what is striking is the apparent inability of the SNP leadership to say that Scotland’s massive renewable energy grid could be held in public ownership after independence.

The truth of the matter is that despite this being an obvious and popular point to make as energy prices spiral out of control, Nicola Sturgeon’s party has no interest in such a project. Or more accurately, the First Minister and those influential around the party leadership don’t. Party members do, having voted not once, but twice, for a National Energy Company.

As has been previously noted, the Scottish Government are in the process of selling off Scotland’s renewable energy future. The renewables rich nation is being stripped of its ability to harness its natural resources for the common good. Instead, as we said, there is a well organised and determined effort to sell the country’s green assets:

The Scottish Government seem to have adopted an organising principle which structurally favours foreign capital and multinational corporations over public ownership and democratic control. Thus, the SNP launched the “£3 Billion Green investment portfolio” in September 2020.

In addition, Scotland’s wind power is being privatised:

Scotland’s off-shore wind potential is in the process of being bought up by private firms too, including by some of the worlds leading oil companies such as Shell and BP. The ScotWind auction was hailed by the First Minister as a “truly historic” moment for Scotland. But it is far from it. Rather it is a colossal missed opportunity and mismanagement of resources.

We should be clear about the facts. This enormous resource is being sold cheaply and without a guarantee of supply line jobs. It is a genuine scandal, which is underreported and certainly not part of the public debate in the way it should be. It raises massive questions about democracy, corporate capture and the nature of the Scottish governing class. The great sell off is itself being sold back as progress.

Let me address independence supporters specifically here. If you want to set up a functioning, sovereign state, you need infrastructure. If you want a meaningful independence that unlocks the democratic ownership and control of resources, you can’t sell them all off in advance. You certainly can’t flush your most valuable assets down the drain.

Thats not hyperbole. All the talk of “resilience” is for naught unless it is attached to a social and industrial strategy that embeds the security of energy, and much else, into the future of the country. Billions will be lost to the public purse as a result of the privatisation of Scottish wind. An in-depth report on just how much has been squandered finds the following:

ScotWind will result in around £50-£90 million per year coming to Scotland in rents from the energy generation in addition to the £700 million already raised from the initial auction. However, analysis of the return of investment and profits from extant offshore wind operations suggest that the energy production from ScotWind could result in £3.5 to £5.5 billion in profits shared collectively between the companies involved in the project.

We are told we are on the verge of a referendum and of independence. It has never been so close. Yet right now the Scottish Government is actively choosing to privatise Scottish wind, rather than preparing to take it into public ownership once armed with the full powers of independence. It is a genuine betrayal of the traditions of the modern Scottish national movement, whose leaders once argued “it’s Scotlands oil” but who now argue “it’s British Petroleums’s wind.”

It is worth watching the following clip in which Nicola Sturgeon is asked directly about the promised National Energy Company. Covid is deployed as the primary excuse for the idea being left to whither on the vine. But the pledge was made in 2017.

This is typical of how the SNP leadership operate. Big headline splashes to get the them through the day, but the follow up work to make things happen is largely absent. Then they are found wanting when the next crisis hits.

Free market fanatics?

I prefer now to see the question as a long term one, having dispensed with the infantile notion of being “free by 2023.” We could have been, arguably should have been, in a much stronger position. A strategy and a prospectus, backed up with a broad campaigning movement that could seize upon the openings presented by the manifold crises, may have shifted the dial.

That we don’t have this belies a deeper truth, usually unremarked upon: the SNP leadership don’t conceive of independence as an answer to the big issues of the era. That much is obvious, since they very rarely speak in terms of how it could transform the situation. This is precisely because it is not meant to be transformative, or in any sense a rupture with orthodoxy.

Let’s turn briefly to Tom Nairn, who is discussed here by James Foley, co-author of a new book on independence:

Neo-nationalism “is analogous to old-style nationalism, above all in its ideology,” he argues. “But, precisely because it starts from a higher level and belongs to a more advanced stage of capitalist evolution – to the age of multinationals and the effective internationalization of capital – its real historical function will be different.”

Nairn correctly identified the nature of the emerging nationalism, which, in an era of footloose corporations, would be more about the pursuit of competitive advantage in transnational spaces, as opposed to the separatist or nativist “retreat” into borders. This is indisputably true of Scottish Nationalism and its parallel European movements in Wales, Catalonia and the Basque Country. All aim to take advantage of the higher-evolved trading spaces of European and global markets. Indeed, Scottish nationalists like to stress that they are leaving a smaller market for a bigger one.

Ironically, this model has been at the root of the crisis of the British state. It prevents the realisation of democratic renewal or the reinvigoration of popular sovereignty because the society is subject to market forces unaccountable to government, trade unions and communities.

This reliance on markets, outsourcing, and privatisation alongside attacks, led by the state, on the working class through cuts to public services, anti-union laws and so on, has itself generated the kind of economic inequality that tends towards political volatility between peoples and states.

For example, how penetrating would the independence movement of 2014 have been without the experience of austerity? It’s not clear to me that it would have been half the size if the UK government were focussed on redistribution instead. Of course, there are barriers to this bound up in the mechanics of the British state. Yet far from being an alternative, the concept of deficit reduction is now at the heart of the independence prospectus which advises this should be prioritised over public spending. In addition, public sector jobs are to be slashed for ideological purposes too. It’s all very reminiscent of the kind of approach taken by George Osborne.

The SNP leadership are, if anything, buccaneering free marketeers. They don’t seek guarantees on the creation of supply chain jobs in the contracts they sign with Shell or BP, because they believe the market, unfettered, will deliver such things quite organically. They don’t oppose Freeports, because this again takes them deeper into those “higher evolved trading spaces.”

The point is to become as tightly aligned as possible to the engines of free-market capitalism. But here lies a headache for the SNP. Such a commitment doesn’t exist in a laboratory, but in the real world. In the real world, Scotland’s largest trading partner is England. Yet joining the EU would create a hard border between the two. Even then, this is only possible if Scotland first has an independent currency, which the SNP leadership are opposed to in practice, because it militates against the economic interconnectedness between Scotland and the UK that they want to retain.

This is why many have come to the view that they would rather avoid all of this difficulty, and instead keep the argument on democratic grounds as a tool to garner support. Or indeed, why we have speculated that life after politics is a far more appetising prospect for the First Minister.

Former SNP senior special advisor, Kevin Pringle, produced an interesting and astute analysis of the current divisions in the Tory party, in which he argued that small-state Tory ideology is ill-suited to the demands of the times. I agree with that, and wrote something similar here too.

But we might also say that the SNP leadership are stuck in a similar trap. Scotland is always “open” to business, but there is rarely a sense of forward thinking ambition about what the powers of independence could be utilised for. This is in part because the SNP prospectus doesn’t allow for such a vision. You can’t carry out the kind of interventions required if you don’t have control over your own economy, for instance.

That makes things like a “Green New Deal” next to impossible. So, instead, the infrastructure is sold off and left to corporations and foreign states to deal with. In the meantime, Scots get buttons in return in comparison to the super profits in the making. In addition, Kate Forbes has sought to “redefine” the meaning of “green jobs” after missing targets.

There is no sense in which the Scottish Government are taking any safeguards as they sell off Scottish wind at rock bottom prices. They want, simply, to be plugged into the most voracious parts of the global system without any real regulation or public scrutiny. This is to the detriment not just of Scots today, but future generations.

Perhaps you disagree, and favour the Scottish Government’s strategy. I’m all for that debate. But the lack of it, given how central renewable energy is to Scotland, is a cause for real concern.

Who owns the wind?

Mainstream Renewable Power, the latest entity to buy up Scottish wind, provides an interesting case study. It is a global firm with major holdings in Africa, South America and Europe. In each case, green natural resources are exploited for huge profits. It is headquartered, of course, in Tax Haven Ireland.

The International Finance Corporation (IFC) are promoted as core investors in Mainstream Renewable Power (MRP). Both play a key role in massive privatisation projects in the global south. The International Finance Corporation is part of the World Bank Group with the express aim of offering “investment, advisory, and asset-management services to encourage private-sector development in less developed countries.”

There is more than a hint of repackaged colonialism here. Indeed, the erstwhile Chairman of MRP, Dr Eddie O’Conner, was forced to resign after making derogatory comments about African “tribalism.”

In South Africa, MRP have made big interventions into the state owned electric utility, Eksom. Eksom, as it happens, is financially constrained partly because of “odious debts” owed to the World Bank. In turn, the World Bank works alongside the International Finance Corporation, who fund organisations like Mainstream Renewable Power, to oversea the privatisation of natural resources. In this case, the expanding market for renewable energy. This is all, handily, portrayed as part of the fight against climate change.

South African electricity workers themselves, have different aspirations:

As calls grow for an energy transition led by rank-and-file organizing in the electricity sector, the South African case highlights the importance of defining “just transition” not merely in terms of worker inclusion but of worker ownership. In its ideal form, a socially owned electricity sector looks like working people guiding the transition from fossil fuels to meet their immediate interest in material security (good jobs, strong unions, affordable electricity) and long-term interest in a liveable planet.

It is my strong belief that the public ownership of key utilities is a popular demand. Indeed, I think it transcends the political spectrum more than one might imagine. Such things are not reducible to economics either. They open up profound philosophical and democratic questions too. Who, really, should own the wind?

For the Scottish Government, they are only too happy to bend over backwards to support the process of privatisation. They operate largely as technocratic managers for such an exercise, in the face of democratic accountability and their own public pledges.

Indeed, as we covered recently, the process takes place well outside the range of the tools which ordinary citizens have at there disposal, including SNP members:

The First Minister announces a National Energy Companyin 2017. Nothing happens. Then, in 2021, SNP members want to raise the issue again to add some urgency to the plan. They vote overwhelmingly for the policy at their conference. Again, nothing happens. At the same time government ministers were having meetings, outside of the public record, with big businesses seeking to cash in on Scotland’s renewables industry.

Even under the conditions of their preferred “independence,” Scotland would be reliant on private and foreign capital without its own central bank. In other words there is no need for “odious debt” to strip Scotland of its assets. That is, in fact, already baked into the proposal around sterlingisation.

Intellectually rudderless

Worryingly, the SNP leadership and their advisors are running well behind the pace of the crisis. They are embedded in that part of uncritical liberalism (more incisive forms are available) where the overriding faith in the system means they believe that “normality” will return. Except, it won’t, and they just cannot bring themselves to think outside of the box. This is why I have been so critical of their new white papers. It’s not just that they don’t have answers, they don’t seem to know what the questions are.

To conclude, I invite readers to consider the following. As the economic crisis intensifies, and with it the rising desperation and material deprivation of Scots, the SNP leadership have two options. One is to cling to the status quo for cover, the other is to build an audacious and visionary independence programme and a plan of action to deliver it.

They are, it appears, already committed to the former. Along with the usual window dressing, of course. In doing so, they are set to fatally undermine the argument for independence.

Scottish wind power could have propelled the argument forwards, by painting a picture of a future based on clean, green and publicly owned energy made possible by the powers of independence.

Tragically, this has been passed up in favour of a quick buck, and a display of subservience to big business.

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