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23 August 2019updated 24 Jul 2021 5:27am

Why economic warnings may no longer be enough to stop Scottish independence

By Chris Deerin

Does money matter in politics any more? It does, of course, hugely — but perhaps not in quite the same ways or with the same potency that it once did.

In the era of Brexit and the financial crisis, of boastful buses and big bank bailouts, we have become accustomed to astronomical sums being invented, owed, borrowed and spent; numbers so large they cease to have any tangible meaning. We have lost some faith in economic forecasting, too — for years now, expert projections have regularly proved to have little connection to the eventual reality. Truly, nobody seems to know anything.

The growing prominence and urgency of the environmental crisis is a challenge to the long-time Mail/Telegraph worldview that the pound in your pocket matters more than anything else. It’s probably true that capitalist innovation holds the key to saving the planet, but it’s equally true there are likely to be some tough lifestyle and economic choices to be made along the way.

Meanwhile, in New Zealand, Norway and Scotland, governments have recently combined to create the WEGo network in which well-being is used as an important (if still somewhat woozily defined) metric in economic calculation and planning.

Economic growth for the sake of economic growth no longer enjoys the cache it once did, chief executive remuneration is feeling the squeeze from shareholder activists, and ethical investment is all the rage. Somehow a new, or perhaps old, philosophy about the correct relationship between economics, markets and the values of society is emerging.

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Nothing proves this more than Brexit. The warnings ahead of the 2016 EU referendum that a Leave vote would have grim consequences for the UK’s economic future, for investment and jobs and trade, were not easily missed. World leaders, business behemoths, Nobel-winning economists, even spiritual gurus, all queued up to explain that the financial consequences of choosing to walk away from the EU would be long-term, significant and quite possibly severe.

To no avail. When it came to the campaign to leave the EU, questions of identity and sovereignty trumped money, for just enough people anyway. That infamous “take back control” slogan, its vacuity only outstripped by its effectiveness, captured a mood and a moment and tipped Leave over the line.

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In Scotland, this was something of a head-scratcher. Two years before, the same global authorities had issued much the same warnings about the consequences of a Yes vote in the independence referendum. In the end, the economic scare story was the strongest card the Better Together campaign could wield — Project Fear was the order of the day. Enough Scots looked at the numbers and listened to the warnings and decided to see off the separatist charge, in the short term at least.

Five years on, the world is an unrecognisable place and polls show some of those Scots are beginning to wonder whether they made a wise decision. There may indeed be more to life and politics than money (and there’s more to the Union than money, obviously, though that case has been less effectively made). That Brexiteer “take back control” slogan niggles away, especially as the European Research Group and the hard left wrestle for ownership of the UK. Where do Scottish values and preferences fit into this? Do we have to just sit here and take it?

This is the climate into which the latest Scottish Government Expenditure and Revenue figures (more commonly known as GERS) emerged earlier this week. Each year these stats show much the same thing, with some variation — Scotland receives an annual subsidy of somewhere north of £10bn as part of the UK, and state spending per head is around £1,600 higher north of the border.

This is always a useful moment for Unionists and an awkward one for nationalists. The fact that the figures are produced by Scottish government economists  — who work for the SNP — means they cannot be dismissed by the Nats as a UK fiction. They show current Scottish public spending levels are reliant on redistribution within the Union, and suggest a newly independent nation would have to observe eye-watering levels of austerity to keep the show on the road.

Much of the SNP’s energy since 2014 has been focused on finding a persuasive counter to this argument. The line now is that membership of the UK is a major reason Scotland requires such a subsidy, and that independence would provide the opportunity to do things differently and close the gap. As Andrew Wilson, who chaired the SNP’s influential Growth Commission, tweeted this week: “Scotland has an unsustainable deficit as a result of the way the UK is now. That deficit needs to be made sustainable for the sake of us all.” Further, the SNP says that in the event of independence Scotland’s share of the UK’s legacy debt would be a matter for negotiation and that future trade relationships and currency decisions might depend on the settlement. 

Have the Nats neutralised GERS? Probably not, and the annual figures are anyway a useful reminder that the early years — at least — of a separate Scottish state would require some difficult decisions and tight economic discipline.

But if money is no longer the definitive driver of political decisions, whether you’re a prime minister or a prole, Scots may be starting to look more broadly at what they desire from their nation state. On that front they may find the UK wanting, and decide to take a lesson from their Brexit-voting compatriots about what really matters.