Indy Scotland will need to nationalise banks, says SNP MP

AN INDEPENDENT Scotland will have to nationalise its banking system to deliver the investment needed for a fairer society, one of the SNP’s Westminster economics team has said. George Kerevan MP, a member of the Commons Treasury Committee, told the Radical Independence Conference in Glasgow yesterday: “We have to nationalise the banks and put the flow of investment and the flow of lending into social means, rather than for the use of the highest profit. If we don’t do that then nothing will change.”

Kerevan said a future Scottish Government would take over the country’s share of RBS – the rump of Scotland’s post-crash banking sector – which is 71 per cent owned by UK taxpayers.

An independent Scotland could also create a dedicated bank to help exporters and a raft of municipal savings banks so that banks were no longer just “machines for mortgages”.

He said: “If Scotland is independent in the next three or four years, it’s unlikely RBS would be sold off by then because its shares are in such a dire state.

“Its infrastructure and its loanbook would therefore fall in large measure to the Scottish Government, so a Scottish Government could end up owning the RBS located within Scotland and that would automatically give you a state bank.”

Kerevan said he also wanted “strategic anti-capitalist reforms within an independent Scotland”, including wealth taxes.

His ideas are a sharp break with past thinking. The 2013 White Paper on independence made no reference to nationalising banks and suggested taking cash for Scotland’s share of RBS.

Kerevan, a trained economist, warned the global economy was “shuddering to a halt” and traditional ideas of creating “a few more jobs” by cranking up Scottish growth “will not work”.

He said an independent Scotland would need to “take control of the labour process” and reverse the creeping expansion of the working week.

The East Lothian MP also wanted left-wing governments to work together to reform the EU institutions.

However his biggest idea was diverting some of the “huge glut of capital” worldwide away from speculative bubbles into socially useful investment.

He said: “An independent Scotland will never be able to deliver the jobs and the living standards that we need unless we control investment, and that means controlling the banking system.”

In July, Kerevan admitted independence would be “painful” for the first five years and could mean budget cuts as the country adjusted to the new economic regime.

Also speaking at the conference, Scottish Green co-convener Patrick Harvie said Brexit had made a second referendum “dramatically more likely”.

He said Holyrood should make maximum use of its new powers and show it was making a positive difference to people’s lives, and criticised the SNP for timidity.

RIC founder Cat Boyd said independence would be won by campaigning on workers’ rights. She said: “If we can encourage workers to stick two fingers up to their bosses, we can convince them to stick two fingers up to the British state as well.”

Reacting to Kerevan’s comments, Tory finance spokesman Murdo Fraser said: “The SNP leadership try to put on a business-friendly face.

“But not much further down the party we find those who believe an independent Scotland would be a socialist nirvana.”