Independence, the economic case


by David McGowran

The voice of Scotland has been denied to the rest of the world for the last 300 years but I think that the rest of the world would prefer to have us and our country, our culture and our distinctive approach as part of the international polity, as opposed to Great Britain and the way it has behaved – particularly during the Blair era.

Our younger people now have the vision to seek Scottish control over international affairs and all things to do with the military.  Scottish people are going through a huge sea change, changes at local government level, a change in the psyche and increasing confidence in our political maturity.  We have had over a decade of devolution and we immediately gained from it.  There were many things the Scottish people needed done differently and chose to change, student fees being one of the first.  What we need now are the powers still denied; powers over social security, defence, foreign policy and public finance.  We can never move forward in our own direction whilst annexed to a regime that has, and will always have, the south east of England foremost on its agenda.

This is about aspiration and putting ourselves in a position to fulfil all the ambitions that we have.  Scotland has now a growing confidence, affluence and individuality.  Almost all the great historical foundations of the Union have been stripped away and the Empire is gone.  Another factor which is no longer relevant was the joint Protestantism of Scotland and England against the French and Spanish enemies, but now we are all European partners.

Support for independence, despite largely stifled debate and a biased mainstream media, regularly exceeds 40% with around 60% swinging from yes to no.  The world is moving to favour modest independent countries in large trading blocs.  Such countries are now the most successful countries in the world, for example Norway, Switzerland and Finland.  Countries like these benefit from social cohesion and the ability to make rapid decisions, particularly on the economy, and have access to the world and international market just as much as any big country does.  Experts assure us that we are not even halfway through the oil reserves in the North Sea.  As we now also know the value of oil will never be less than $80 a barrel (in 2000 it was $20, in 2007 $135, 2011 $90).  By controlling our own economy affluence can be more easily distributed.  It is insulting to Scottish people for ideologists with a hidden agenda to tell us, a nation that has contributed so much to the wider world, that we are not capable of handling our own affairs.

The UK is holding back Scotland.  We want to be 100 per cent in control of our own business.  We don’t want to be answerable to Westminster anymore.  Devolution in 1999 has not fixed Scotland’s economic and social problems.  There are many people in Scotland in the business world who until now have been sitting back with a wait and see attitude towards Scotland and her constitutional future, but who are now saying enough is enough.  Scotland has all the attributes for economic success.  We have an international brand and reputation in the global market.  Our country is blessed with well educated and skilled people in a prime location with an outstanding natural environment which is rich in natural resources.  We also have a massive reservoir of emigrants to call upon.  For the past 30 years Scotland has witnessed economic growth well below the European average around 4 or 5 times lower than economic growth in neighbouring Ireland.

Remember that higher growth delivers higher revenue.  Our potential to rival our European competitors is currently inhibited as the Westminster monetary policy is largely inappropriate for Scotland and we lack control of our business tax.  We suffer from having few direct routes to international markets and there is virtually no direct marketing of Scotland.  There are too many exports at the moment going via England, and a poor transport infrastructure coupled with a low share of UK government spend.   The exchange rate is too high and we are being bled to death by the most expensive fuel prices in the world, (in a country that produces more oil than Kuwait).  Oh, and interest rates are too high.

This all combines to keep us in a state of low growth and low productivity, and Scottish companies become undervalued.  This limits our growth capital, makes it harder for us to host the head offices of major companies.  We lose much of our talented young to emigration and the gravitational pull of London which leads to skills shortages in a country that possesses one of the finest higher education systems in the world including 3 of the worlds top 100 universities. These factors combine to inhibit our business birth rate, reduce our service sector, and funnily enough make the low growth and productivity worse.

This all because we have limited powers to make the appropriate changes to how our economy needs to work.

Our fringe status within the UK is bad news in terms of competitiveness.  It is also perfectly evident that the Barnett rip off, uniform UK taxes and high local taxes will not serve to transform the Scottish economy.  All this strangulation from Westminster is actually, in case you hadn’t noticed, disastrous for Scottish living standards and quality of life.  With limited powers we have our hands very much tied when it comes to dealing with the problems Westminster creates for us.  High unemployment, high instances of part-time work and short term contacts and self-employment create difficult circumstances for working people.  With low incomes, mismanaged public services and poor urban environments we have many people on poor diets, youngsters demotivated leading to high instances of drug and alcohol misuse leading to higher crime levels which leads to poor health and lower life expectancy. This keeps people dependent on the state and welfare dependence and reduces confidence which makes it harder to attract the inward investment we need.

This all stems from our limited powers. We need full financial independence to create the conditions for competitiveness, flexibility and growth and maximise our quality of life and life expectancy.

Full financial independence means more direct exports, a better transport infrastructure, a strong branding and selling of Scotland abroad, a higher share of government spending and a competitive exchange rate.  We are of course one of the world leaders in oil and so naturally we can afford ourselves affordable fuel.  We can also set our corporation tax and Schedule D according to our particular requirements.  All of these elements will provide a gravitational pull towards Scotland with a massively increased FDI (Foreign Direct Investment).  With this comes higher growth and an increase in the value of Scottish companies with a growth in major and small and medium business headquarters which brings with it the retention and return of our talent and makes all the skills we need available to us. This also increases our spend on research and development and grows our service sector and rejuvenates our business birth rate.  As we climb higher and higher up the European GDP ladder we can look back at where we were and see that it really was complete lunacy to have not had that full financial independence all the time.

We need full independence, opportunity, participation, prosperity, wealth creation, fairness and redistribution in our country.  Without independence we will continue to have a continuous, gradual and relative economic decline.  Independence is a platform for growth, recovery and prosperity.  Because our current economic conditions are not right for us we have low growth, a wealth gap and the associated economic and social consequences.  Full financial independence is the solution to this core problem.  Creating our enterprise economy and taking influence from similar nations like Norway,  we can earn our way to prosperity and better social outcomes.  Only full financial independence can provide the conditions needed to produce dramatically better economic growth, higher living standards and prosperity for the Scottish people.

There is no credible alternative.