Scotland needs long-term strategy, not just SNP sweeteners

This year was different. True, the report from Andrew Wilson’s Growth Commission found no place on the official agenda. But it was clearly the centre of attention to the delegates in Aberdeen, in debates and on the fringe. I had thought that in this environment it would get a rough ride, and from some of the howling lefties it still did. But overall its reception, if not wholly uncritical, was favourable. People of course knew Nicola Sturgeon would give it her backing. Party conferences love to luxuriate in adoration of the leader, and a muttering groundswell of griping discontent would have sat ill with the standing ovation to which she was destined.

Still, genuine dispute was not absent – a sign of extraordinary vigour in a party that has been in power for more than a decade. Political struggles are generally between left and right and here, as so often, the contention focused on a rather technical issue: whether a newly independent Scotland should use sterling as its currency, and for how long. The view from the right, represented by Andrew and regarded not unkindly by Nicola, was that Scotland should do just this, if preferably for no more than ten years. At least, in the demanding task of setting up a new nation, there would be one less immediate problem to worry about.

Since significant Scottish divergence from inherited UK norms is likely to take longer than a decade, big problems on the money markets would remain rare meanwhile. As it was put last week by a son of Edinburgh, John Kay, professor at the London School of Economics, in the globalised economy “currency is no longer tied to nationality and, even if Scotland did at some time adopt a currency of its own or the euro, it is likely that many individuals and businesses in Scotland would maintain accounts in sterling”. All the same, economic discipline would be required too. This is, of course, music to right-wing ears, including mine. And it is the position the conference implicitly supported.

The leftists then departed Aberdeen with their tails between their legs. Their main spokesman turned out to have been former MP George Kerevan, who only last week was hoping in his column in the National to hear from the Growth Commission a “rallying cry for working-class voters” – or, put another way, what he no longer dares to call socialism. For some reason this is reckoned to include the launch of a separate Scottish currency, which I estimate to be technically impossible in anything less than three years, possibly longer.

But the whole leftist purpose is not to maintain and defend the value of the currency, instead to devalue it. Socialists rather like devaluation: see Clement Attlee in 1949 and Harold Wilson in 1967. After their customary economic mismanagement, devaluation allows them to reduce the people’s living standards in the least obvious way. On the face of it there are no wage cuts (“the pound in your pocket is not being devalued”), yet in an open economy like the UK’s the higher cost of imports soon erodes the pay packet in real terms. Meanwhile wasteful public expenditure, too, can go on as before.

So this was the position the SNP conference in Aberdeen implicitly rejected – or did it? On such an occasion a leader’s speech will offer a little something for as many delegates as possible. They will not be seeing one another for a while and they need a boost to see them through the summer, when even the greatest zealots’ thoughts can easily stray to sun and fun, till the reopening of the political season in the autumn and the concentration of minds on the momentous events due in the year ahead, from Brexit itself to another possible Scottish referendum.

A leader as experienced as Nicola did not fail in her task. An occasion like this is a time for sweeteners, and there were plenty: a Building Scotland fund of £150 million, an increase in carers’ allowance, free sanitary products for the poor, a minimum school clothing grant, a doubling of free childcare, a nursery construction programme, increased student support, more relief from repayment of student loans, more support for student carers. It was a list skilfully worked out, on the whole an object lesson in how to make a big difference in needy places with small amounts of money. Even a wicked capitalist like me couldn’t quarrel with most of this.

But there were other items which struck me as not so carefully thought through. Nicola had previously lifted the cap on pay rises in the public sector and, as something on account, in her speech announced an extra 3% for most workers in the National Health Service. I know, I know, they all have hearts of gold and deserve it. But, after a decade in which wages over the whole UK have been stagnant, I should think most of us in some sense “deserve” more money. Teachers, for example, think they deserve a rise of 10%. Perhaps they may now expect from Nicola an explanation of why they do not, if they are to refrain from unleashing another winter of discontent in the classrooms.

Meanwhile, there will certainly be no higher wages in the private sector because employers cannot afford them. Yet we will all be expected, through steeper taxes, to pay for improved wages in the public sector. What price social justice? In fact none of us should in my view get a pay rise till we have made Scotland a far more flourishing country.

Which brings me nicely back to the Growth Commission, and the First Minister’s generous praise for its report. It shows a way through the mess left by Westminster’s mismanagement of our economy to a time in the future when we can have government policies that serve Scotland’s interests rather than subvert them. But the transition is bound to be tricky and vulnerable to getting blown off course by all kinds of external events over which we have no control: global recession, trade wars, etc. So far as we can minimise the risks in our domestic economy, we should do that.

I do not believe austerity is necessary for this purpose, and I disagree with the leftist line that the Growth Commission is an advocate of austerity. But without doubt one change is essential in the Scottish economy, that there should be a slower rate of growth in the public sector budget than we have seen in recent years – a budget of which the wage bill forms by far the largest part. Otherwise the public sector will hog the available resources and crowd out the private sector, the sole available source of the growth we need above all other desirable economic aims. Without the prospect of faster growth I doubt a majority will vote Yes in a second Scottish referendum. It would be a vote for rising relative poverty, and the No side would let us know that.

Praiseworthy as the First Minister’s extra spending plans may have looked in detail, the urge to butter up particular constituencies will need before long to yield to a prudent concern for their effect on the long-term strategy for independence. At the next SNP conference in the autumn she will have the chance to start putting things right.