One cheer for ‘One Dynamic Nation’, part 2: Economy

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by Dave Taylor

For years, we have been asking Unionists to spell out their arguments for the Union. Now we have seen them laid out.

Do they stand up, or are they laid low? Let’s have a look at the claims made on the One Dynamic Nation website.

Economy

  • The Union allows Scotland to be part of a larger, more powerful economy and within the Union, Scotland enjoys the four freedoms – movement of goods, services, people and capital.
  • By remaining part of the Union, Britain has the fourth largest economy in the world. Edinburgh’s role as a major financial centre is built on the expertise of its workforce and underpinned by its position in the UK.
  • Being part of the Union and the current funding setup means that public services are less exposed to sudden fluctuations in revenue with a tax base as wide as the UK’s
  • Being in the Union allows us to pool resources and risk. The fact that Scotland receives more from the UK Treasury than she contributes does allow the disproportionate remoteness of some regions and the disproportionate economic disadvantages of others to be catered for.
  • Being part of the UK allows the costs of say bank rescue plans to be more easily absorbed and spread out across a far larger tax base and therefore makes the costs less acute on the individual.
  • Social security payments are available and are paid on the same basis to people across the country, according to their needs. This principle of fairness should not be undermined.

These are simply arguments for being part of a Union – any Union, in which the participant members share some of the opportunities and risks.  It is not an argument for the UK Union.

Indeed, our dynamic trio of Unionists should be arguing that all parts of the UK would be more secure were they more closely integrated within the largest economy in the world – the EU.  Every single argument that they deploy (if true) would be even more true within that ever larger and more closely integrated EU, with a single parliament and government which had sole sovereignty over every EU member, but might decide to devolve some powers to local assemblies and parliaments in places such as London, Madrid, Paris or Lisbon.

There would be no need for a local parliament in Berlin, of course.  The European Parliament would just meet in the Reichstag building, and double up as the parliament of Germany.

Such an arrangement would allow the principle of fairness underlying standard social security payments to be extended across Europe.

Ridiculous?  Probably, but no more ridiculous than these exact circumstances (on a smaller scale) being what the Unionists are determined to retain.

It is equally possible to envisage a different UK, or a different EU where sovereign nations remain sovereign, but agree to share some aspects of governance as being good for the common weal.  I would have some respect for those who are prepared to argue for either of these positions on their own, but those who argue for a centralised UK and a decentralised EU are not deploying economic arguments at all, but simply making an emotional nationalist case – just that their nation is Britain, while mine is Scotland.

There should be no fears whatsoever on any referendum fought on those grounds – Scottish or British?

I have not suggested actual economic arguments in this essay, for the Unionists have provided none on their side, and this is simply a critique of their core arguments.

However, there are equally clear arguments for disaggregating economic centralisation.

  • Most of the Scottish budget comes from a block grant from the UK Parliament, paid for out of taxes collected from across the UK.
  • Being in the Union allows us to pool resources and risk.  The fact that Scotland receives more from the UK Treasury than she contributes does allow the disproportionate remoteness of some regions and the disproportionate economic disadvantages of others to be catered for.

When any side has to reduce itself to a mixture of error and obfuscation, they have already lost the argument.

Readers will know that “most of the Scottish budget comes from a block grant from the UK Parliament” and that the UK’s Treasury is funded by “taxes collected from across the UK”.  These are simply statements of fact.  They are not an argument.

Quite why they bothered to put in such a statement is unclear, because it serves no useful purpose – except in terms of distortion.  Tied together in that way they carry, and are designed to carry, the implication that without English taxes there wouldn’t be enough money to equate to the Scottish Block Grant.

Indeed, they then make that very assertion, without any shred of evidence whatsoever.  “The fact that Scotland receives more from the UK Treasury than she contributes”.   Anyone who has had the most cursory look at the GERS data knows that the opposite is the case.  To repeat an error constantly does not require the authors to be labelled as Goebellian.  They may simply be lazy, ignorant, and or incapable of checking the data.

In a spirit of international brotherhood, I have some friendly advice for our British friends.  Before making fools of yourselves, you would be well advised to learn the difference between “attributable” and “non-attributable” expenditure within what the UK Treasury loosely describes as its statistics.