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17 March 2017

Nicola Sturgeon is offering Scotland a false choice

The SNP's economic argument is intellectually incoherent - and terrifying for Scotland's public services. 

By Ian Murray

Everyone thought this week’s big news would be Theresa May triggering Article 50 and kick-starting the two year Brexit negotiation process. However, on Monday, she was soundly beaten in the recklessness stakes by Nicola Sturgeon, Scotland’s First Minister, who fired the starting pistol on a second Scottish independence referendum. It is a rash and opportunistic decision, which will have significant and damaging implications for Scotland’s economy, society, and future wealth and prosperity.

I am resolutely against another independence referendum – Scottish Labour will vote against it in the Scottish Parliament – for reasons that can roughly be divided into three categories: social (Scotland is still recovering from the deep wounds left by the last referendum); economic (Scotland’s economy is ill-prepared for independence), and generational (what would be the legacy of independence?). 

Another independence referendum will further rupture Scotland’s social fabric, already frayed by the referendums of 2014 and 2016. This is something we can ill-afford. Scotland is divided enough; the last thing we need is the further airing of grudge and grievance that will be the inevitable result of another independence referendum – especially if the next referendum is conducted in the same spirit as the last.

The 2014 referendum has been presented in some quarters as a benign and fraternal celebration of democratic values. I do not recognise this portrayal. For me, it was a fractious campaign laced with rancour and resentment. It divided families; it divided friends; it divided communities and it divided our country. Those divisions endure to this day.

I do not believe that cutting ourselves off from our closest friends and neighbours is in any way enlightened or progressive. I can only hope that, in the event of another referendum, politicians on both sides set an example by debating with decorum and treating their opponents with respect. Sadly, the arrogant, insulting heckling I was recently subjected to in the Commons by the Rt. Hon. Alex Salmond – a former First Minister who should know better – does not bode well on that score.

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At present, there is no evidence of any appetite for a second referendum. In fact, a clear majority do not want one, and recent polling shows support for staying in the United Kingdom at its highest for over two years. In light of this, I believe we should be working to heal divisions, not further exacerbate them.

Unfortunately, for the SNP, evidence is a dispensable commodity. A notable feature of Monday’s announcement was the First Minister’s claim that any case for independence would be based on “facts”. However, what the SNP presented as facts in 2014 – an independent Scotland borne aloft on sky-high oil revenues – was nothing but fond conjecture; a vision swept away by the collapse in global oil prices that has since occurred.

What would form the basis of their economic case this time round? Oil prices remain in the doldrums, and tens of thousands of jobs have been lost in the North Sea oil industry and associated supply chains since the global downturn began. This in large part explains the sluggish growth in Scotland’s economy, which has consistently been weaker than the UK’s and continues to underperform. In the year to the third quarter of 2016, Scotland grew by 0.7 per cent, well below the 2 per cent recorded by the UK as a whole.

More worrying still, the SNP are prioritising access to the EU single market over access to the UK’s (which the Institute for Fiscal Studies has said may be inhibited if Scotland becomes independent). This is intellectually incoherent. The UK single market is worth almost £50bn to Scotland, four times more than the EU single market. Losing unfettered access to this would deal a serious blow to Scottish businesses and the wider economy.

Moreover, access to the EU single market is far from guaranteed. Although the SNP are predicating their claim to another referendum on Scotland being removed from the EU “against its will”, the First Minister has pointedly failed to confirm that an independent Scotland would seek full membership, saying only that the objective would be to establish a “close relationship” with Europe. What then, is the referendum for? Or is the First Minister trying to placate the 36 per cent of SNP voters who supported Brexit, including party grandees such as former deputy leader, Jim Sillars, and former cabinet secretary and serving MSP, Alex Neil?

Returning to the public finances, Scotland has a fiscal deficit of £15bn – substantially more than the £11bn that has been identified as the potential cost of Brexit – and public spending per capita £1,200 higher than the UK average. The reality of this, as the IFS has observed, is that an independent Scotland “would have to either reduce its spending by more than £1,000 per head or increase its taxes by more than £1000 per head”. 

An SNP government will not increase taxes: they have refused to do so thus far, preferring to rein-in spending. In 2014, they actually wanted to slash corporation tax, and they still propose to halve, and then abolish, Air Passenger Duty. Consequently, the necessary fiscal consolidation would have to be achieved through a prolonged programme of austerity.

The short term prognosis for an independent Scotland is, therefore, gloomy. What about the long term? What legacy would independence bequeath?

The First Minister has spoken a lot about “choice”; specifically the choice between a hard Brexit and an independent Scotland. However, she left the true nature of that choice undefined. I don’t want Brexit and I will continue to oppose it, particularly the hard Brexit many Tories are peddling. However, it seems clear that Scotland’s future outside the UK would be significantly worse than Brexit. Indeed, the SNP’s top economic adviser has projected that Scotland’s economy would take around 10 years to recover if the country became independent. Nicola Sturgeon may be prepared to tolerate this; I am not. The generational impact would be devastating.

The “choice” Nicola Sturgeon offers is based on a false prospectus. There are scant grounds for another referendum and there is no evidential basis for independence. Brexit has cast a pall over the UK’s future – of that there is no doubt. But independence will not lead to a brighter future. Together, we’re stronger, and better able to meet the challenges ahead. What we need is decisive and committed leadership. Scotland would be much better served by a First Minister who stopped dividing the country, and started governing it.


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