SCOTLAND should become an anti-capitalist “laboratory” in which “social friction” would be the price paid for a radically different economy, according to one of the SNP’s Treasury team.
In a forthcoming book, George Kerevan upends SNP economic orthodoxy by advocating a raft of new and higher taxes, including raising corporation tax and taxing house price rises.
He proposes mandatory paid sabbaticals for workers, taxing different jobs at different rates, drafting young people into a “Scottish Peace Corps”, paying unemployed artists a higher dole, and mortgaging state assets to borrow billions for investment.
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Referring repeatedly to Karl Marx, the SNP’s sole MP on the Commons Treasury committee, said the ideas were “an opening gambit in creating a new Scottish political economy” under home rule or independence.
The Scottish Tories described them as “bonkers”.
Mr Kerevan sets out his ideas in a 40-page chapter of a new book called Tackling Timorous Economics, which also includes contributions by the STUC’s Stephen Boyd and Oxfam’s Dr Katherine Trebeck.
Although he started the work before being elected MP for East Lothian in 2015, Mr Kerevan said even after the vote for Brexit “the core analysis… remains valid”.
His starting point is that the global economy is stalling, with wages falling and jobs threatened by computers, and a glut of global capital fuelling dangerous asset bubbles.
His plan is to pioneer “a new political economy using Scotland as a laboratory – an agenda that rejects not simply the neo-liberal variant of capitalism but the entire system itself.
“The aim is to embed a non-capitalist economic practice inside the belly of the whale.
“Such an outcome will not be stable. There will be social friction and resistance from the prevailing capitalist order.
"But from the experiment will come new ways of responding to the existential failure of the existing economic paradigm – and with that comes hope.”
He rubbishes a key tenet of the SNP independence prospectus in 2014, when Alex Salmond argued for cutting corporation tax below the rate in the rest of the UK.
Mr Kerevan said corporation tax should not be used as “a crude bribe to secure inward investment” and suggests raising it instead, while cutting employers’ national insurance.
He said there should be a tax on “any increase in house values” to avoid property bubbles, admitting: “This would be unpopular, of course.”
There should also be a tax on wealth, despite “an inevitable response from the business class and rich that such a move will hurt ‘incentives’, discourage inward investment and ‘force’ high net wealth individuals to migrate” - reasons Nicola Sturgeon cited not to raise income tax.
To counter deflation, he said Scotland should rethink free trade and use “protection wisely... to create world class firms” backed by the state.
Mr Kerevan, who earlier this month called for the nationalising of Scotland’s entire banking system under independence, is due to speak at an event linked to the SNP conference today.
Scottish Tory MSP Alex Johnstone said: “Scots do not want to be guinea pigs for George Kerevan's bonkers social and financial experiments. This would be laughable were he not in such a position of importance. Nicola Sturgeon and the rest of the Scottish Government's financial team should run an absolute mile from these incredible conclusions."
Tackling Timorous Economics is published by Luath Press on October 31.