Scottish Independence: The Economic Question

When the question is asked, which it frequently will over the next couple of years, “Could Scotland afford to become independent?”, there’s a much more important question to be answered: can Scotland afford to remain within the Union?

Within the U.K., Scotland is peripheral – it is geographically isolated from the centre of economic and political power, and can speak only with a minority voice. That makes the Union tremendously unequal. There are practical repercussions to this when it comes to economic policy. As Britain has become increasingly dependent on the financial sector to work as a growth engine, it was natural that the economic policy of successive governments reflected this, choosing to focus on the wealthy South rather than the rest of Britain. And what was the result of this? Communities across Scotland, and elsewhere, lost their traditional industries, replaced only by service jobs in supermarkets and call centres. This is Westminster’s legacy.

There are inherent advantages to running an economy the size of Scotland. The economy is likely to be more integrated, without the gaping regional differences that emerge in a country the size of Britain. Control of the economy is executed at a level closer to the people, with the government able to move with more haste and flexibility than would be possible on a larger scale.
Look at the current constitutional situation in Scotland. We are politically independent in most areas, yet are tied to another, much larger nation, with vastly different ambitions. We control our own healthcare system, our own police and judicial system, and our own education system, but are denied the ability to set our economic policy.

Let’s take the on-going economic difficulties as a case in point. The Scots have overwhelmingly rejected the austerity agenda of the Conservative party, both at Westminster and Holyrood elections, and chose instead to elect a social-democratic Scottish Government, who clearly have a desire to stimulate the Scottish economy. To the extent that they can do, the Government have brought forward capital spending on infrastructure – one of the surest ways to improve an economy, providing employment in the short-term and leaving the country better positioned to grow in the long-term.

Yet spending power will have only limited effect in isolation, and Scotland are denied the economic powers available to any other nation. We have two layers of government here: one layer able but unwilling to intervene in the economy, another layer willing but unable to. The Westminster coalition operates in Scotland without any political mandate – and so where is the wisdom in allowing them control of our economy?

If you want your government to be able to be able to make coherent policies, how can you separate its powers in the way we have done with devolution? How can one government control benefits while another controls healthcare, when they are so clearly linked? The same goes for taxes and spending – what sense does it make to separate these? In Scotland, we’re used to hearing the common refrain of ‘subsidy junkies’, to the extent that this has become conventional wisdom. It is believed, without any need for evidence, that Scotland can only pay the bills at the generosity of our English neighbours. The reality is very different.

Scotland has 8.4% of the U.K. population. Scotland pays 9.4% of the U.K.’s taxes.

Repeat those figures in your head until they are imprinted on your brain.

It is true that we Scots have a higher level of public spending per head than the English. But when this is raised, what’s never pointed out is that this is because we want this to be the case. We value the N.H.S. and our education system. We choose to have free prescriptions and free higher education. Westminster chooses to have nuclear weapons and to involve itself in wars like Iraq. This has never been a question of affordability – it’s about priorities. Which society do you want to live in? One in which the welfare state is valued, and access to education is provided based on ability and willingness to learn? Or one based upon the Thatcherite vision of the world, where individualism replaces community, the welfare state is slowly dismantled, and our purse strings are controlled by a government in London?

When we talk about the need for Scots to determine their own future, it’s more than just an abstract idea. It is a fundamental question which shapes every aspect of our government and our society. Which Scotland do you want?

Dan Paris
Political Blogger

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There are 5 comments

    1. Fuad

      Hi Lyn,Thanks for the mention in this interesting look at whether current discussions being held online can serve as the seeds of change we’ve seen happen in the past. I think there are two issues which may serve to weigh down and forward momentum from these conversations. The first and most obvious one is the increasing amount of noise that is present on the various social media sites. Having been on Twitter for a number of years, I’ve noticed the gradual evolution from discrete conversations and idea sharing to general link sharing and in some cases banal chatter. Of course, one of the positive aspects of social media is that we all have a choice as to what we’d to hear and so we can filter out the noise and focus instead on where discussions migh be had, and where connections can be made to take the conversation to the next level. This approach seems rather in keeping with these groups of Scottish intellectuals who no doubt also chose who and where they would interact so that they could develop their understandings and insights about t their world.The other issue we’re having to contend with, and which I addressed in my piece you mentioned, is the fact that we’re once again popularizing the notion behind the Great Man theory; that the changes we see around us are not the result of a collective effort, but the consequences of the actions, ideas or vision of a solitary figure. Of course, many studies have been done by historians and sociologists which have debunked this theory and have clearly shown that change or innovation doesn’t occur within a vacuum, but instead is the result of a shift in collective thinking and perception. Indeed, history is replete with examples of two or more individuals working independently and unaware of the other on the very same concept, idea or technological breakthrough.As such, if we are to have some form of enlightenment, it requires us to not only separate the signal from the noise, but also the understanding that change of any size requires a collective effort of sharing, discussion and reflection.

  1. Melanie McKellar

    “It is true that we Scots have a higher level of public spending per head than the English. But when this is raised, what’s never pointed out is that this is because we want this to be the case. We value the N.H.S. and our education system. We choose to have free prescriptions and free higher education. ”
    “Westminster chooses to have nuclear weapons and to involve itself in wars like Iraq.”
    The above is the only part I don’t agree with! …(sorry)….but Health & Education are devolved to the SP so we spend our ‘block grant’ on the free tuition and prescriptions’, the other 3 Nations have the choice to spend their money on this but chose to distribute it elsewhere. Scots should never feel that this is subsided by taxpayers elsewhere in the UK!
    Nuclear weapons and Iraq come under Defence and we have NO say on this Government spending as it is exclusively reserved to Westminster.
    Our higher capita per head is because we have a large country with a small population which is spread out. Think about our Islands, the number of remote towns & villages, we have more of them than anywhere else in the UK and these places have the right to services the same as larger towns and cities in more populated areas.
    As to Scotland behind ‘Subsidy Junkies’ N.I. Actually receives more than Scotland and London receives more than Wales….just remember that along with the fact that 8.4% population pays 9.4% of the UK tax!!

    Thanks for a great piece though Dan!

  2. Robert Peffers

    Nice piece but I dispute that Scots get a bigger per capita funding. Examine the totally unnecessarily complicated method of funding and it becomes clear that this belief is a myth. English per capita funding is very much hidden as ONLY England has uncapped funding, the United Kingdom overspends every year. All others get a capped block grant and live within their means. First, not all extra English funding generates “Barnett Consequentials”, but when it does it is added up to a year AFTER England has spent her share and we lose due to the current inflation rate and the extra is add to the next Block Grant so looks like extra but isn’t (or a meringue)? ;-)

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