Noticing a shift in rhetoric, EVAN WILLIAMS looks at the changing SNP narrative on what an independent Scotland’s economy would look like

 

“Scotland is not oppressed and we have no need to be liberated” A Salmond, 2012

A lot has been written about how a separate Scotland would fare economically. Usually this revolves around assessing tax receipts and expenditure, if tax receipts exceed expenditure it is assumed everything is right with the world and if expenditure exceeds tax receipts wailing and gnashing of teeth ensue.  I don’t presume to be better able to make estimates of these numbers than the many others out there – I would assume that factcheck’s look at this last year is not far off the mark. However, there are a couple of real problems with getting too exercised about the numbers for the last few years or the next few years that such analysis concerns itself with.

Firstly. The numbers presuppose that spending and tax receipts would have been and would be in the future basically the same in a separate Scotland than they would be without separation. One of the few things we know for certain is that the SNP want to take charge of corporation tax in order to reduce it.

Secondly, such analysis reduces arguments of economic viability to a very short term analysis of annual surplus or deficit, and of course really what matters is not the next three years but the next three hundred years. It is fair to assume that the SNP want a permanent separation and any decision will be for life, not just St. Andrews Day.

If you are only interested in the very short term, (even Nationalists say this) the difference between income and expenditure in Scotland is more or less covered by revenues from “Scotland’s Oil”. Now leaving aside any question of how much of it is actually Shetland’s Oil, it seems odd that the SNP should be content with an argument that Scottish independence is possible only because of an accident of geology and not because of the innate qualities of the Scottish people.

Looking at the “viability” of Scotland in the longer term it is difficult to know what the future holds but we know for certain that at the time of the Union in 1707 Scotland was in very deep financial trouble, it lacked money for investment and was remote from international markets, the Scottish pound had progressively devalued against the English pound. Standards of living were appreciably worse in Scotland than in England, and inequality in Scotland was far greater than it is today.

The three hundred years of Union haven’t been all bad. Indeed many of Scotland’s great achievements only came after the Union. The modern enlightenment was more or less invented here and Scotland contributed enormously to culture, science, economics and engineering and still does so within the collective embrace of the Union. Wealth and living standards are now broadly comparable between Scotland and England.

But let’s be clear, correlation does not imply causation, so just because the last three hundred years has seen Scotland go from near basket case economy to one of the wealthiest nations on earth within the Union we can’t assume that ends the argument in favour of the Union. There isn’t any way in which to conduct an experiment in which the Union hadn’t happened. So what we need is sense of what might happen moving forward from here.

Alex Salmond and the SNP have invested a great deal of money and effort in trying to establish the idea that “independence” is historically inevitable and the natural evolution of Scotland’s destiny. They have done the market testing and they have worked hard to make the “positive associations” of independence as something people aspire to in life and therefore should aspire to for their Nation State. (That’s why they find it so irritating when some people prefer to describe it as separation which doesn’t have the same positive association).

That market research also tells them that they have to try and establish a compelling narrative of the viability of Scotland and success of small countries. In recent years there have been a good number of iterations of this idea.  Taking them one by one (I may have missed out one or two) more or less in chronological order;

1970’s  “Its Scotland’s Oil” i.e. we can afford independence now so up yours England, which has never really gone away as an argument but is now much more subdued.

1990’s “Independence in Europe”   membership of the Euro and playing a full part at the top tables of Europe i.e. we wouldn’t change too much because we would be part of the EU that everyone in Scotland is ok with.

Early 2000’s “Celtic Tigers” (Mr Salmond used the phrase “Celtic Lion” in 2007) emphasising the economic success of Ireland.

Mid 2000’s “the Arc of Prosperity”  the very embodiment of small successful nations on the periphery of Europe. Ireland, Iceland and Norway hailed by Mr Salmond as proof of the vibrancy of small countries the very model for an independent Scotland. Now as it turns out Ireland and Iceland had particularly large banking sectors and were both badly hit by the international banking collapse,  and if they are in an arc it is no longer reasonable to describe it as one of prosperity.

Recently; attempts to draw parallels with Switzerland; both have similar populations  therefore Scotland can be just as successful as Switzerland. (so not a member of the European Union at all, neutrality? where would we be on, for example, fighting Fascism?).  It really doesn’t work as a reference does it?

As yet that compelling narrative hasn’t materialised and although we often hear that a separate Scotland could spend more (on benefits, pensions, health etc) and reduce taxes on business none of it has the ring on a coherent (dare I say it positive) vision for a separate Scotland.

In itself the difficulties faced by Ireland and Iceland aren’t an argument that Scotland couldn’t survive as an independent Nation, whatever else they are they are both still small and still exist.  In fact, nobody opposed to separation has seriously argued that failure to survive would be the problem.

There is a question though, about how well off Scotland would be. Would the treasury break even, run a surplus or deficit? How would such surpluses or deficits be managed in a currency union with the rest of the UK or with Europe? While the next few years matter a great deal to me and my family a parliamentary term is not the right scale on which to decide matters of importance for the future of Scotland. We need to try and take a much longer view because it is our children and grandchildren and their children who have to make their way in the country we leave them.

The Nationalists’ record in identifying the right economic choices for Scotland over just the last few years doesn’t auger well for their competence at managing the economy in the future. The real problem has been in their desperation for a narrative which has seen them jump from one comparator to another in the hopes of not having to alight on any one particular vision for Scotland’s future that could be open to scrutiny or debate.

“The Scottish People will decide” is abrogation of responsibility. As even the most ardent Eck-onomists out there knows no amount of wishing it to be true doesn’t allow you to have both a low tax economy like Ireland and a high spending Scandinavian style social system.

Any economic analysis that says you can is not so much a positive vision for Scotland as a deliberate attempt to deceive.

Evan Williams is an environmental economist and lives in Paisley.

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32 thoughts on “Beginners Eck-onomics part 2

  1. This article is full of inaccuracies and assumptions it adds nothing to the debate.

  2. “In fact, nobody opposed to separation has seriously argued that failure to survive would be the problem.There is a question though, about how well off Scotland would be. Would the treasury break even, run a surplus or deficit?”

    Its a strange argument. At a time when the London Treasury is billions in debt, to argue that a current account deficit could not be managed by an independent Scottish exchequer is simply absurd.

    I don’t see that recalling election slogans, as if they are synonomous with hard thought policy decisions of any Party, is particularly helpful. They convey a message of sorts, but that is all.

    “The Nationalists’ record in identifying the right economic choices for Scotland over just the last few years doesn’t auger well for their competence at managing the economy in the future.”

    Any reader has to struggle to prevent even a slight bemused grin at such a statement given recent and past economic performance of UK Governments.

    Of Course what is missed is any interesting take on how an independent Scotland could start to prioritise public and social policy to the obvious areas neglected deprivation in Scotland that have arisen from decades and more of remote UK government.

    It is here where the Labour Party could have some real and radical proposals for a future independent Scotland. It would certainly be a better use of its time than the constant outpouring of undergraduate creative writing exercises it now seems to indulge in.

  3. I dont what you are employed as, but perhaps you could inform us why we are part of the 4th ( and likely to become 3rd shortly ) most unequal country in the world? i am not holding my breath………..

  4. Ho hum, same old same old.

    I don’t think even the most ardent unionist doubts Scotland’s natural resources. Even excluding oil: our land, seas, renewable potential, fresh water etc are at least an equal for similarly sized European countries such as Ireland, Denmark, the Netherlands. All of these, including Ireland, had a higher GDP per capita than the UK in 2011 according to the IMF. Even Iceland does, which makes one of the unionists’ current favourite arguments defunct. If we can’t use the word ‘prosperity’ in relation to them, then what term should we use for the UK?.

    So if it’s not our natural resources, those who doubt our ability to thrive must feel that it’s the people of Scotland who are the problem. Are we too dumb? All benefit junkies? Please come clean and explain, why do Labour believe the Scottish people can’t be as successful as other nations? Whatever the reason, 30 years or so of oil revenues give us a great chance to catch up.

  5. Reasonable article,showing how the Indepenence narrative has changed and evolved over the last 40 years.However I’m sure we could equally look back and see how socialism’s narrative has changed from the Wilson era through ‘new’ labour to the current ‘blue ‘labour.Even the ‘one nation’ tories of the Heath era has changed becoming an everyman for himself narrative with Thatcher and now back to ‘we’re all in together’ under Cameron.
    Anyway my only critisism with the thrust of the article is the historical ”all we know for certain is that prior to 1707 Scotland was an economic basket case,while England was a financial powerhouse”….we know that for cerain do we?…..England in a permanent state of war either civil or international since 1640! Many Scots wary of the union because they feared increased taxes to pay for these wars?……If Engalnd was doing so well,why were they much keener on the union than the poverty stricken Scots?
    The act of union was never signed to bring economic prosperity to the Scots,and the addition of it in this otherwise decent article was not required.

  6. This article misses the point. There are now around 200 independent countries in the world, with three-quarters of them gaining their independence within living memory. Is there any reason why Scotland should be not be able to exist as a perfectly viable, independent country, like all the rest?

    I’m sure the same arguments were made when Norway decided to be independent from Sweden just over 100 years ago. It seems to have been a successful move and I’m not aware of a movement to re-unite with Sweden!!!

    1. “There are now around 200 independent countries in the world” independent countries like the UK? are you saying there were previously lots of non indenpendent coutries that have now become independent? equally there are lots of quite disperae peoples who choose to band together. Your meaningless sloganising isnt an argument

      1. “are you saying there were previously lots of non independent countries that have now become independent?”

        Yes

      2. “Gauliter”, I believe you have brought ‘meaningless’ to new levels with that reply, it makes NO SENSE whatsoever.

  7. It comes down to – do you want to wait for handouts from Westminster or do you want to control your own destiny

    As far as the record of the SNP- they didn’t deregulate the banks in 1997, someone else did – with disasterous results

    1. The SNP didnt do it cos they werent in power – everything bad that has ever happened in the world was the fault of Unionists or Labour in Particular, Gordon Brown was in charge in Ireland and Iceland and Greece and Spain and oh everywhere else where they had a banking collapse – virtually everywhere else in the world. Oh wait that would be nonsense.
      When Alex Salmond praised RBS and encouraged the takeover of ABN Amro he had his fingers crossed so it doesnt count. Live in a delusional world where Eck is the living embodiment of an infallible God if you like. Just dont expect anyone else to go along with it.

      1. Utter garbage! Just because Labour say something it is cast in stone in the right wing Labour party.

        1. Wow! Someone makes a logical argument and instead of countering it with fact you say the above?

          I think that just shows even you know we’re right on this one.

  8. It is interesting that you make no attempt to suggest that we are better off in the Union economically or otherwise!

  9. What does this article bring that we don’t already know?

    It’s impossible to predict how a future Scottish Government will utilise the powers afforded to them in x years in the future. Therefore, we cannot make an assumption either way.

    What pro-independence people think and hope is that by having the powers available we can utilise them better for ourselves.

    I don’t care that it will mostly be the SNP in the first wee while that will have these powers. Independence is about more than Salmond policy. The man will be dead one day. The people in the future will use these powers as surely as Gladstone, Churchill, Thatcher, Blair, Brown, Eden did under the Union’s framework to diverging ways. It is a platform, a framework. It is not a political ideology based on this article’s misguided view on SNP policy!

    What an utterly short sighted article this is. It claims to want to look into the future but uses extremely short term ideas to mock.

  10. My first message to you is to leave history to the historians and fortunately Scotland has several renowned in that area. You are right that we cannot look to the past and right to discount your own arguments on standards of living in the past which doesn’t make sense in any case as your not comparing like with like. No doubt life would have been little better or anymore equal for English, French or Russian underclasses in 1707 – but I can’t see the relevance to 21st century ‘Eck-onomics’ or any ‘economics’ in the context of this debate and I don’t think you can either. Why waste your words on mediocre summaries of past and recent past history when you could use your economic skills to posit a counter narrative to self-determination. So what is your positive vision ?? This unanswerable question will come up time and time again and you cannot in all conscience continually naysay one political vision without offering an alternative. If you don’t believe independence to be a historic inevitability what do you believe is the natural evolutionary path of Scotland ? Do you have a counter narrative, does it include self-determination and how does it square with the current political aspirations of many of the electorate in Scotland. Time is surely running out for your big idea …

    1. “to posit a counter narrative to self-determination.”

      I realise that you may not want to hear this but self determination means that people decide it does not mean that they decide on separation.

      You know perfectly well that nobody is arguing against self determination although of course I understand why you would want to crate a fiction that anyone who disagrees with you is.

      Maybe you could try and do a non fiction positive vision for a separate Scotland then who knows people might be in favour of it. At the moment Ad hominem attacks on your opponents might make you feel good but they say more about your lack of confidence in your own argument than they do about much else.

      1. Evan I’m not attacking you or lacking in confidence in my own argument. I never started out here but like many Scots have come along a pathway over decades that started in the Labour Party young socialists, to the Labour party, to Scotland United and now to wanting to make the argument for self-determination in an independent Scotland. I didn’t come to this position easily or without some measure of nostalgia for the left and I’m likely to stay on the left while supporting SNP. I am genuinely keen to see the construction of a positive argument for the union and your article was interesting in the sense that you tried to set it in a historical perspective – looking at the legacy for future generations. I think this is an important aspect and the long game of independence has not yet been aired so I’m glad you brought these neglected aspect to the fore.

      2. “I realise that you may not want to hear this but self determination means that people decide it does not mean that they decide on separation. “

        I think nobody wanted to hear that because it’s incomprehensible gibberish.

        “You know perfectly well that nobody is arguing against self determination”

        Labour have been arguing against it for pretty much my whole life. They’re hardly “for” it now – if the SNP hadn’t won a majority, Labour would be fighting tooth and nail against a referendum even now, and as it is they’re trying desperately – as they’ve always done in the past – to limit the options.

  11. Another article predicated entirely on the fallacy that Scotland would be basically run economically as it is now.
    That’s the point.
    It wouldn’t
    That’s why we are going to independence.
    To do things differently and better.

    You don’t get it.
    But 196 other independent countries do.

  12. After independence would we run a surplus or a deficit ? A 50 – 50 chance eh, looks like better odds than what occured under labour or did you not notice this massive deficit that is currently crippling the whole of the UK. I believe I would have to go with the Independence.
    Taking the longer view ? perhaps labour should have thought of that when placing our NHS and education facilites under so much ‘PFI’ contracts because its our children and grandchildren who are stiil going to be paying for them, long after we are gone.
    As for “records” in identifying the right economic choices for Scotland, I think that May 2011 showed who Scotland thinks has proven their economic record.
    This is certainly an article that smacks of being sold for english gold (part 2).

    1. Davy,

      It seems you don’t really know anything about what happened to the economy over the last 15 years.

      What happened during Labour’s time in power? Did Labour decide to create massive debt just for the sake of it? The answer to that is ‘no’. The national debt was lower before the global (yes, global) economic crash than when Labour came to power in 1997. Looks to me like Labour invested in education, health and the welfare state while also promoting frowth and shrinking our debt.

      Ahhh, the PFI argument. Regardless of the views people have on PFI/PPPPs it is a way to build schools and hospitals in large numbers now, not later. The SNP promised to match Labour’s building record “brick for brick” without using PFI/PPPPs. Unfortunately they couldn’t do this and so have started using PFI schemes to build schools and hospitals!

      1. Gmcm,

        So, I dont know what was happening with the economy over the last 15 years, even though I have had a mortgage and family to keep during that time, even though I have friends who have lost their jobs and careers during the past few years due to the state of the economy during that time, even though more than a few companies including some I have worked for in the past have went under during that time. According to you I dont really know anything about what has been happening with the economy over the last 15 years, “OF WHICH LABOUR WAS IN CHARGE OF FOR 13 YEARS”.

        It really is beyond believe that you would try and justify the disgraced PFI system, a system which is costing our NHS and education budgets money every year. Money that should go to patients and students and will keep on costing for another 30, 40, 50 years or more.
        And where is the Scottish government using PFI schemes to build schools and hospitals ??? come on where ??? Or is this another load of complete bile, just the usual nonsense shouted out in the vain hope that some fool will actually fall for it.

        Yep you must be right I did’nt really know what was happening with the economy in the last 15 years, that would be me and about 60 million others who did not see labour produce the biggest deficit in the history of the UK.

  13. I’m afraid any economic argument made by the Unionist cause to justify Scotland remaining in this Union is doomed to failure. Mainly because of the simple fact that no-one knows what the future fiscal outlook for the UK is.

    Its a similar argument to saying that Scotland couldn’t have saved the RBS and HBOS if it was independent. Perhaps if there had been a similar lack of banking regulation, this is a possibility but nobody knows. Its now a moot point, Westminster bailed them out because Westminster thought it was the best thing for Westminster.

    As for the Scottish Government making the right choices, we’ve had 5 years to see that they are amply supplied with fiscal common sense. Something that the previous adminstration sadly lacked.

    1. Let me get this straight – ‘perhaps’ there would have been a ‘similar’ lack of regulation. No on this you’re wrong. There would definitely have been a different lack of regulation i.e. there would have been even less. (check Alex Salmond’s comments on RoI and gold-plated regulation).

      Westminster bailed them out because it was the best thing for the people and the economy.

      I guess from that comment you disagree with bailing out the banks? So we should have sat on our hands then? You know, the way the Tories proposed?

      So we should’ve had less regulation and not bailed out the banks (both policies of the Tories)? Looks like we have a Tartan Tory in our midst. 😉

      1. Once more pure conjecture regarding the bank regulations. But then making things up and then treating them as facts appear to be one of your strong points. You need to review what Salmond said again.

        I also suggest you check just what the FSA was created for and then come back with a more adult reply.

  14. Where to start with this embarrassing piece of ill-researched drivel?

    Will we be better off in an independent Scotland or not?

    Who knows? It will be down to us, the people – and the governments we elect. It’s what countries do! In my view it’s inconceivable that we will not make a better fist of it than a government sitting in London, elected by others and with a priority of the city of London and the SE of England.

    The poverty of Labour’s ambition for Scotland is truly depressing.

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