Friday, 25 May 2018

It's only the SNP that holds Scotland back.


I have long held the view that Better Together ran a terrible negative campaign that nearly cost us the referendum in 2014. For this reason my response to the SNP’s latest attempt to encourage more Scots to support independence is not going to be to explain why Scottish independence is impossible. I think everyone in Scotland should accept that Scotland could be a perfectly prosperous independent country. The issue is not and never has been could we? Rather it is should we?


There are any number of places which have become independent in recent years with various degrees of success. Since the fall of the Soviet Union many new countries have emerged in Eastern Europe helped also by the break-up of Yugoslavia.  Most of these countries have either their own currency or else they use the Euro. If these places can become independent and have their own currency then plainly Scotland could do so also. We are very much wealthier than, for example, Moldova.

In my view independent countries ought to have their own currency. The pain of the economic crisis in 2008 was greatly reduced for both the UK and Iceland because we each had our own currency. The UK avoided some of the difficulties which were faced by countries like Greece, Italy and Spain, because we had our own Central Bank and because we were able to devalue our currency.

The SNP plan as far as I understand is to continue using the UK Pound unofficially after independence for a good number of years and then if conditions should allow to move towards creating a Scottish currency.

Again this would, no doubt, be possible. I think Pro UK people should be careful not to exaggerate the costs of doing so. Iceland's population is not much more than Aberdeen's, but it managed to set up its own currency. Lots of countries have done so. It can’t be that hard.

But the SNP’s plans with regard to currency would rule out Scotland joining the EU in the near future. A condition for EU membership is that a country promises to join the Euro, but this requires that it has its own currency and Central Bank. An independent Scotland initially would have neither.

If Scotland did eventually set up its own currency there would, of course, be downsides. There would be a cost depending on whether the currency was free-floating or  pegged against either the UK Pound. Free-floating would be cheaper and in some circumstances better economically, but it would have an effect on our trade with our nearest neighbour.

The vast majority of Scottish trade is with the other parts of the UK. Having a different currency to your greatest trading partner can hardly be described as an advantage. Likewise ceasing to be a part of the UK’s Single Market which would be an inevitable consequence of Scottish independence would have an economic downside that the SNP never appear to take into account.

It is easy to point to small countries that are doing rather better than Britain. Some of these countries are wealthier than us because they have small populations controlling large natural resources. Others are wealthier because their Governments have policies which are more effective economically than ours. Still others have workers who are more productive than ours.

There isn’t a magic formula that brings prosperity, but I tend to think that free markets, low regulation, low tax economies will more likely than not bring wealth to their people. If an independent Scotland were to follow the policies of Singapore, there is little doubt that in time we would reach Singapore’s level of per capita GDP. But the same could equally well be said of the UK. Those same Singapore policies might well  increase the wealth of  pretty much every country. But that doesn't mean it is straightforward to follow these policies. If creating wealth were simply a matter of imitation and imitation was as easy as the SNP thinks, then why isn't every country as wealthy as Singapore?

What really is the point of saying if only Scotland were more like Denmark, for then we’d be as rich as the Danes. It’s like saying if only we were as hard working and efficient as the Germans, we’d all get to drive in a Mercedes.

It isn’t easy for a country to change the fundamentals of its economy. These fundamentals are a function of its historical development. You cannot suddenly live like a Dane, work like a Dane and take on aspects of the Danish economy as if it were a matter of putting on a hat with Viking horns on it.

The Scandinavians, for the most part, make a success out of high taxes and high public spending, but in my experience and I once lived in Denmark and spoke the language fluently, they have a different mentality to ours. That mentality took centuries to develop.

I think high taxes and high public spending would make an independent Scotland poorer than we are now. Many countries have tried social democracy/socialism and few have ended up like Denmark. The Danes are hardworking, innovative and good at business despite their high taxes. But it is Danish businesses and the work that ordinary Danes do that has made them wealthy, not their Governments. Above all the Danes are conformists. They follow rules and for the most part they are happy to work hard even if they could do nothing on benefits instead. They don’t generally take the Mickey out of their welfare state’s generosity. That is why their system works well enough for them, but would not necessarily work well for us. They are taught from age 0 to be good little Danes and they want to be that. Scots have nothing at all in common with this mentality and nothing much in common with Scandinavia. The places we have most in common with speak English. Funny that. 

While the Scandinavians have achieved success with high taxes and high public spending, most small countries reach prosperity by cutting bureaucracy, public spending and taxes. An independent Scotland could do the same, but once more so could the UK.

There is something foolish about pointing to other countries and saying we could be like that. Of course, anyone could. But it doesn’t mean that it would be easy or indeed that it would happen at all.

Large countries like the United States are more prosperous than present day Scotland. If we followed similar policies to the US we would no doubt improve our prosperity. But then again Shetland could be more prosperous than Scotland if it emulated the Faroe Islands and had exclusive access to the marine resources around it. If Scotland could be like Denmark, then Shetland could be like the Faroes. The argument is the same.

But the point to realise is that none of these possible models for future prosperity require Scotland to be independent. Scotland right now could raise taxes to Danish levels and could consequently increase public spending. We could also cut income tax and reduce the regulations that inhibit Scottish business.

I believe the UK as a whole could become much more competitive if we lowered public spending, lowered taxes and promised not to impose trade tariffs on any imports no matter what.

What hinders us from doing this? Well mainly the Lib Dems, Labour and the SNP.

I oppose Scottish independence, not because I think it is impossible, nor because I think Scotland would necessarily be poorer. Our future prosperity would depend mainly on creating a small government that interfered as little as possible in the economy. Our economy would then depend on the efforts of ordinary Scots to study hard, create businesses, products and services that people actually wanted to buy.

None of these things are impossible, but then again none of them are impossible in Scotland right now. Prosperity is not impossible in an independent Scotland, but nor does it require independence.

However, everything I seen about the SNP over the past few years tells me that the likelihood of them creating an independent prosperous Scotland is small. The SNP gained power by promising free this and free that, even though none of these things are actually free, but rather paid for by taxation. The SNP always wishes to centralise power rather so that it rests with themselves rather than allowing individuals to make their own choices. This suggests that an independent Scotland would be hindered because too many Scots would wait for independence to bring them prosperity rather than by using their own efforts to create that prosperity.

The SNP themselves at least in the short term would cause independence to be a disappointment.

But anyway I oppose Scottish independence, not for this reason, but because I am British and have and want to have a shared identity and citizenship with everyone who lives in the UK. I want all of the UK to be prosperous, not just Scotland. I think the UK is a great country with a marvellous past that has made us the way we are, but perhaps an even better future now that after Brexit we will be more in control of the path that we choose to take. We can use the full sovereignty we will regain to create a low tax, free enterprise, free trade hub off the coast of Europe. We can do much better than we are doing now. We can all be much more prosperous.

There isn’t an optimum size for a country. Singapore is tiny. The United States is huge. It’s not independence in itself that brings with it prosperity, it’s sensible economic policies, living within your means and creating successful businesses. There is nothing about being a part of the UK that hinders or prevents Scotland following policies that might increase our chances of creating wealth. Quite the reverse, the kind of free market, small government policies that tend to lead to increased wealth are more often than not opposed by the SNP. They then blame someone else for their own failure at running our economy.

What hinders Scotland the most however is that the SNP go on and on about independence. Business hates uncertainty. The prospect of having to go through yet another SNP attempt to drum up support for independence makes huge numbers of us weary. The prospect of ever having to go through the division and acrimony of an independence campaign fills millions of Scots simply with dread. These sort of feelings do not a successful economy make. 

If the SNP put a fraction of the effort its puts into its never-ending push for independence into actually trying to make Scotland a wealthier more pleasant, happier place to live, it might find that in time we would quite soon approach Danish living standards. But I strongly suspect the SNP would rather we were poor and independent, than even a much more prosperous part of the UK. There's nothing wrong with Scotland nor with our prospects. It's only the SNP that holds us back. 

31 comments:

  1. Some governments have the idea that they somehow create wealth, whereas everyone knows in reality they don't. Only hard working and innovative individuals generate jobs, pay taxes and create a sustainable economy. Our current government regrettably have made this deliberate mistake and that is the reason why the SNP's Growth Report misses the target by some margin.

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  2. The Scandinavian analogies are well worth examining. As the territory in which the Celtic and Northern worlds, overlap, Scotland is in a *very* interesting position, both geographically and culturally.

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  3. Summed up beautifully in the last two paragraphs. SNP ruining the country.

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    1. Yes that reduction in crime, free healthcare and free university is making life hell on earth.

      The welfare cuts and constant testing of sick and disabled people is just an inconvenience. The killing of the economy with the blight of Brexit is just a temporary thing of course so can be ignored.

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  4. Whatever you chose to name it, civic nationalism is fuelled by questionable authority.

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  5. The Kalmar Union, uniting all the Northern realms, stretched from the marches of Russia to the other side of the Atlantic, from Pomerania to the Arctic. It was the largest experiment in political union until modern times. In its unmitigated form, it lasted nearly as long as the current United Kingdom. Its (diminished) constituents lasted into the twentieth central.

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    1. Denmark (including at the time what are now the southernmost counties of Sweden) held more than half the population of The North. One consequence of this is that Copenhagen, once in effect the capital of everywhere from Russia to the fringes of the Americas, is so spectacularly out of proportion to the rest of modern Denmark.

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    2. My apologies: for 'central' read 'century'.

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    3. The history of the North has been one of poverty, violence, and oppression, in an environment that is trying to eliminate one for several months every year. On top of this, outside powers have constantly attacked, annexed, and laid waste.

      Today, most of the territories of the old Kalmar Union now belong to the Nordic Council, whether as independent sovereign states or as autonomous regions enjoying extensive self-government. They enjoy impressive standards of living.

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    4. I once asked a Danish economist what were the competitive advantages of Denmark. He thought for a moment and said "Our chief competitive advantage, I think, is that we have no competitive advantages. If we don't organize ourselves properly, we'll all die of starvation next winter."

      Allowing for some important differences amongst the various Northern lands, a common theme in their evolution has been high taxation, high public expenditure, and high standards of service. Among the fruits of this approach have been a healthy and skilled workforce, organizations in every sector able to respond with flexibility and to plan strategically, and a capacity to collaborate internationally without états d'âme.

      All this is, of course, currently under attack from that set of ideas and practices known (for reasons which quite escape me) as neoliberalism. Asset-stripping and fiscal sleight-of-hand have put Denmark particularly in a very bad case. Nevertheless, alert citizens are putting up a stout resistance in every one of the Northern lands. It is not hard to see why sensible governments would study the policy of those countries, or why Scottish ministers might be seen giving interviews in decent Norwegian on Norwegian television.

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  6. Everything changes, sometimes slowly other times spectacularly fast. The Roman Empire was to Europe as Russia was to its satellites. Just look at Italy today and try to imagine it telling Germany how to play the game using its rules rather than Merkel's.

    It's unclear to me what point you're making re Copenhagen and its changing political significance in the Baltic and beyond Simon?

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    1. Denmark today is a country of the same order of magnitude as Scotland. The size of its capital, however, is indicative of its earlier sway.

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    2. If by 'its satellites' you mean the other 14 Union Republics, the parallel with the res publica Romana is rather remote. If you also include the members of the ci-devant Warsaw Pact, then your parallel recalls Euclid's dictum about what parallel lines never do even if produced to infinity.

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  7. Supporting Brexit is somehow not damaging or increasing uncertainty... ? Yet discussion on Scottish independence is....

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    1. Useful point. Comments, anybody?

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    2. It doesn't fit the narrative here.....so you should expect no replies.

      There are a rump of Unionists in Scotland who not only challenge every single thing the SNP do regardless of area of competence. They perversely also accept with no thought everything that the London parties put forward.
      The continuous acts of negativity towards the SNP government they see as a stalwart and in fact a requirement of what they believe to be 'good' unionist 'thinking'.



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    3. There*is* a rump of Unionists, surely?

      If (and only if) I've understood Ephie correctly, she no longer holds independence to be both impossible and unconscionable, but rather a completely neutral trope. It would appear now that independence is impeded by the unsuitability of the population, who have been rendered unfit for it by the SNP. This is predicated on the SNP's having the capacity to effect qualitatively substantial change in the psychological make-up of the entire population during the few years that it has been in power. Mirabile dictu!

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    4. On the relative risks involved in Brexit compared to those attached to Scottish independence, I'd have thought most nationalists would realise the finality of their proposal is non-negotiable. David Cameron made this abundantly clear in 2014. Independence is a one-way street and a clear majority quite sensibly refused to take the risks involved that September.

      Nationalists happily put their financial concerns aside and allow their belief in Scottish sovereignty to over-rule all else. That is their privilege and their right, but when their fellow countrymen chose a different path for their country's future, they need to accept democracy or face the consequences.

      Wilson's discussion paper offered a degree of honesty missing in the White paper as sponsored by Salmond. It's an altogether more mature document where oil is no longer the commodity that would act as security for the transition phase between Scotland leaving its relationship with the UK and forging its own path. Its description of Scottish politics has a strong pro-business focus, recognising that the success of a small economy depends on the ability of strong domestic industries to sell specialised, home-grown products in global markets. This has created a seismic rift within those left-wing socialist groups within the party who now feel deceived and ignored by the leadership.

      The economic blueprint has many deficiencies and erroneous assumptions that suggest it wasn't written by a bone fide economist but by a panel chosen by its sponsor, the SNP. It miscalculates the real Scots economy when it fails to recognise our true GDP with the one projected. An analysis by John McLaren, an experienced economist who gave advice to this SNP study, found the country’s actual wealth (based on what Scottish companies, institutions and individuals owned) was nearly £3,000 lower per head than its headline GDP figure.

      The comments made on this page by some advocates of nationalism clearly illustrate they've learnt none of the skills needed to entice NO voters to reconsider their position.

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  8. The Nordic Council offers a very useful model for working unity between sovereign territories. Economic, social, and cultural co-operation proceed unimpeded, and no member assumes a hegemonic rôle.

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  9. By the way, I've asked Danish friends for an explanation of the expression'learning to be good little Danes'.

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  10. I'm still waiting for one of them to reply.

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  11. Lucky I wasn't holding my breath!

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  12. Good to see you on here again RM. Tell me, have you gotten over the loss of indymince yet thanks to the SNPs overly honest austerity commission report? Anyone who votes SNP from now on surely has to be into S&M in a big way! 😂

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  13. This comment has been removed by a blog administrator.

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    1. Instead of the Running dog of nationalism, I should rename you the stalking dog. For the last time go away. You are not welcome. I will delete all your comments

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    2. Fair's fair running man. Scot Goes Pop now deletes all my comments. We will just have to exist in our respective bubbles I'm afraid!

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    3. I am happy for people to comment & disagree, but I require reasonable levels of politeness. That is all.

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    4. I don't think you're asking too much, Effie.

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  14. Can I ask, would you contemplate independence if it were driven by another major party? Devolution would never have happened if it had remained a purely SNP goal; but as soon as Labour backed it, it went through within a couple of years. I often get the impression that it's the same with independence - there are people who, like yourself, believe independence could work, but who would never in a million years dream of giving the SNP the satisfaction of claiming it was their doing. If Labour or even the Tories took the project on, however, they would vote for it like a shot (not least because, deprived of its raison d'être, the SNP would quickly fragment and ultimately dissolve). Thoughts?

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    1. I wouldn't vote for Scottish independence for the same reason few New Yorkers would vote for independence. They are Americans, I am British. If the SNP dropped independence as a policy & expanded throughout the UK they could be successful like their Northern League counterparts in Italy. My problem with the SNP is not that they want independence. Other than that some of their policies are no worse than those of other parties. The problem is not the SNP, the problem is independence. But of course independence is possible. I don't think it's desirable. In the end though it's not about the economics.

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