Why making an economic case for independence is pointless

I think of independence as a political project. Justifying it in narrow economic terms would be pointless since there is so much more to life than can fit into a set of national accounts.

I can easily go further. Brexit was also a political project which was supposed to have economic benefits. The project is nearly complete but the benefits are still to appear.

In the process of becoming independent, Scotland will inevitably have to complete a complex set of negotiations with the UK. There is no good reason for political leaders in the rest of the UK, who are willing to invoke Section 35 of the Scotland Act to remind us that, ultimately, they remain in charge, to suddenly cheer us on our way as we set up a new country.

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Until independence is inevitable, they will mock Scotland for being too wee, too poor and too stupid. Then they will seek to impose the least favourable terms possible in the negotiations, to hobble for the country many years, and tell us that we were too stupid to understand how wee and poor we are.

Should that make us fearful of seeking our independence? Of course not. But if, in rushing to secure Scottish independence, we end up blaming the UK Government for negotiating in bad faith, then we will have failed. Independence should mean that we take responsibility for our failures, just as much as for our successes.

Think about our neighbours. From the foundation of the Free State in 1922, Ireland’s population fell for 50 years. Then the country began the process of integration with Europe.

Almost immediately, its population started to grow steadily, at first very slowly, but more recently at about 1% per year. Ireland is no longer raising clever young people who leave it. Instead, it is welcoming migrants from around the world.

Or think about northern Europe. Lesley Riddoch has frequently reported on the work of the Nordic Horizons network. She often cites Estonia as an example of what might be possible.

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I have never heard her mention the libertarian orientation of its first leaders or the strength of its commitment to deterring Russian aggression. Becoming a world leader in online connectivity, the country has prospered in many ways.

The Bottom Line Scotland group makes very similar comments about sidestepping the talk about the costs of independence by understanding the costs of dependence, and how Scotland has been unable to reach its full potential because of the UK Government’s fixation that everything good must start in Westminster.

Independence should be a unique opportunity to reimagine the country, to cast aside old arrangements which are no longer working well, and to embrace ideas which have been found to work well in other places.

After the 2014 referendum, Derek Bateman (below) argued that there could be a path to independence in which Scotland gradually behaved more and more like an independent country until it seemed reasonable to most people that we should declare ourselves independent.

There has not been enough of that in the last eight years. The First Minister’s approach has largely been conciliatory, accepting the limits to her authority.

There have been incremental steps, and the Scottish Child Payment represents a substantial commitment to a better future for all. Innovation has largely been in social policy, with rather less attention being paid to the economy.

That inattention is captured in two closely related facts. Scotland has the largest proportion of graduates in its workforce of any region of the UK.

It also has the highest proportion of Universal Credit recipients in employment.

A part of the social contract between government and its citizens might be that government will support people to obtain skills and knowledge, as well as an economic environment in which skills and knowledge will be put to good use.

We have achieved the first part. That is what government can direct. For the second part, Scotland does not (yet) have an economy which needs a high proportion of graduates. Social development has run ahead of economic development.

My colleague Arnab Bhattacharjee has argued that Scotland needs many more jobs which are good, green, and globally relevant.

Good jobs offer secure employment, with high wages. Green jobs will support the transition to a zero-carbon economy. And, globally, relevant jobs tend to be in the tradable sector of the economy – the part which faces competition from organisations around the world, not just in Scotland.

Businesses in the tradable sector tend to have a highly skilled workforce, as well as being capital intensive and creating substantial economic value.

We don’t need to wait until independence to start rebalancing the economy. The three Gs give us quite a clear direction. We need to find new ways to encourage innovation; to increase the rate of business start-ups; to channel investment, and to concentrate on developing industries such as biosciences and marine engineering.

This rebalancing should make it easier to build a wellbeing economy. We must do more than simply create wealth – we need to use it well. That will require a people-centred government, committed to ensuring that every citizen has access to excellent health, education, and care services, and also security of income through social benefits.