From Skintland to a United States of Britain

The hysterical debate around Scottish independence is harming independents

The Economist this week caused a bit of a stooshie north of the border by wading into the murky waters of the independence debate with a front cover that labelled an independent Scotland as "Skintland". Whether the SNP’s irate response to the article was individual petulance or co-ordinated political manoeuvring, we’ll probably never know.

What the Economist does spell out is that the hyperboles of neither side are true. Scotland has excellent resources and would not be an "impoverished backwater". Equally, there are not boardrooms full of investors waiting eagerly on the edge of their seats for Alex Salmond to usher them into his socio-democratic paradise.

If the economics are just about even, then, why all the fuss?

Because secessionist movements are not economic. A recent book by two MIT Economists concludes that the optimal size of a country is a trade-off between the benefits of being big (not enough of the current debate has focused on this) and the costs of heterogeneity. Voters want a government who represents their cultural and social beliefs. It is clear that a large number of Scots have felt disenfranchised by sneering, plummy Westminsterites for generations; but this narrow view disregards those many Scots who are proud to be both Scottish and British and who want to stay a part of the Union for the same non-economic national pride that the Nationalists claim a monopoly on.

The debate – an ideological one hidden behind the false pretence of economics – is reminiscent of the USA’s recent primaries, where king-making independent voters are forced to listen to months of diatribe before getting down to the (hopefully) more rational Presidential election.

And just like in America, voters who would prefer a pragmatic, economic solution for the UK are instead being offered two increasingly polarised options.

But there is an alternative.

Of the SNP's "seven key strengths" plan – released hastily in response to Skintlandgate – all seven would be attainable under devo plus/max, yet there is no mention of these options in the Economist article.

Most independents (a poor choice of word in this case) would probably welcome further fiscal powers for Scotland within the Union, preserving the benefits of size and free movement of goods and labour whilst allowing the Scottish Government to provide a more tailored basket of public goods. Indeed, fiscal decentralisation in Scotland offers a rare opportunity to make many better off without making others worse off. But the rub with this can be found in another Economist article two weeks previous:

Scotland, given the power to lower corporation tax. . . will suck investment and jobs from below the border.

There is evidence that this "beggar-thy-neighbour" approach is already happening, with companies such as Amazon awarding large contracts to Scotland over north England thanks to the good (generously funded) work of Scottish regional development agencies (RDAs), which were abolished in England to its detriment. Provided UK growth policy continues to focus on the South East – the SNP’s main, justifiable argument – devo plus/max will breed resentment and inequality in the rest of the UK’s peripheries. For this reason, a fiscally decentralised four-state solution would also be unfeasible.

What is required is a bottom-up model for the UK: Further fiscal decentralisation of the four nations alongside the regions of England; elected regional assemblies with tax-and-spend powers and well-funded RDAs; all backed up with the monetary largesse of the British State and the safety net of central transfers to underperforming regions. In short, a federation. This would allow Britain to rebalance via a productivity-driven, regional-growth model whilst maintaining an historic 300 year old Union and – although no-one seems to mention it – avoiding a costly, messy secession.

It is fitting, then, that as the polarised rhetoric on both sides of the independence debate begins to emulate American politics, the best solution for our constitutional future might lie in a United States of Britain.

The Economist "skintland" cover, which was in no way deliberately provocative

Dom Boyle is a British economist.

Picture: ANDRÉ CARRILHO
Show Hide image

Leader: Boris Johnson, a liar and a charlatan

The Foreign Secretary demeans a great office of state with his carelessness and posturing. 

Boris Johnson is a liar, a charlatan and a narcissist. In 1988, when he was a reporter at the Times, he fabricated a quotation from his godfather, an eminent historian, which duly appeared in a news story on the front page. He was sacked. (We might pause here to acknowledge the advantage to a young journalist of having a godfather whose opinions were deemed worthy of appearing in a national newspaper.) Three decades later, his character has not improved.

On 17 September, Mr Johnson wrote a lengthy, hyperbolic article for the Daily Telegraph laying out his “vision” for Brexit – in terms calculated to provoke and undermine the Prime Minister (who was scheduled to give a speech on Brexit in Florence, Italy, as we went to press). Extracts of his “article”, which reads more like a speech, appeared while a terror suspect was on the loose and the country’s threat level was at “critical”, leading the Scottish Conservative leader, Ruth Davidson, to remark: “On the day of a terror attack where Britons were maimed, just hours after the threat level is raised, our only thoughts should be on service.”

Three other facets of this story are noteworthy. First, the article was published alongside other pieces echoing and praising its conclusions, indicating that the Telegraph is now operating as a subsidiary of the Johnson for PM campaign. Second, Theresa May did not respond by immediately sacking her disloyal Foreign Secretary – a measure of how much the botched election campaign has weakened her authority. Finally, it is remarkable that Mr Johnson’s article repeated the most egregious – and most effective – lie of the EU referendum campaign. “Once we have settled our accounts, we will take back control of roughly £350m per week,” the Foreign Secretary claimed. “It would be a fine thing, as many of us have pointed out, if a lot of that money went on the NHS.”

This was the promise of Brexit laid out by the official Vote Leave team: we send £350m to Brussels, and after leaving the EU, that money can be spent on public services. Yet the £350m figure includes the rebate secured by Margaret Thatcher – so just under a third of the sum never leaves the country. Also, any plausible deal will involve paying significant amounts to the EU budget in return for continued participation in science and security agreements. To continue to invoke this figure is shameless. That is not a partisan sentiment: the head of the UK Statistics Authority, Sir David Norgrove, denounced Mr Johnson’s “clear misuse of official statistics”.

In the days that followed, the chief strategist of Vote Leave, Dominic Cummings – who, as Simon Heffer writes in this week's New Statesman, is widely suspected of involvement in Mr Johnson’s article – added his voice. Brexit was a “shambles” so far, he claimed, because of the ineptitude of the civil service and the government’s decision to invoke Article 50 before outlining its own detailed demands.

There is a fine Yiddish word to describe this – chutzpah. Mr Johnson, like all the other senior members of Vote Leave in parliament, voted to trigger Article 50 in March. If he and his allies had concerns about this process, the time to speak up was then.

It has been clear for some time that Mr Johnson has no ideological attachment to Brexit. (During the referendum campaign, he wrote articles arguing both the Leave and Remain case, before deciding which one to publish – in the Telegraph, naturally.) However, every day brings fresh evidence that he and his allies are not interested in the tough, detailed negotiations required for such an epic undertaking. They will brush aside any concerns about our readiness for such a huge challenge by insisting that Brexit would be a success if only they were in charge of it.

This is unlikely. Constant reports emerge of how lightly Mr Johnson treats his current role. At a summit aiming to tackle the grotesque humanitarian crisis in Yemen, he is said to have astounded diplomats by joking: “With friends like these, who needs Yemenis?” The Foreign Secretary demeans a great office of state with his carelessness and posturing. By extension, he demeans our politics. 

This article first appeared in the 21 September 2017 issue of the New Statesman, The revenge of the left