What kind of Scotland?

What kind of Scotland do we really want? That should be the core issue of the current electoral cycle.

Instead, in campaigns denuded of the passionate stuff of 2013-2015, we’re being treated to the over-rehearsed reprise of the binary debate between pro-indy and anti-indy – with a dollop of British bombast over how brilliant Brexit will be (and how dastardly those continentals truly are). It’s as appetitising as warmed-over baloney. The political debate here in Scotland has retreated into provincialism.

It’s not as if there aren’t vital questions – and policy answers – to discuss. The Scottish economy is in pretty poor shape and deteriorating at an alarmingly faster rate than that of the UK as a whole. Yes, unemployment on ONS figures is down to 4.5 percent or the lowest among the four UK nations and, yes, productivity grew 3.5% or “four times faster than the UK” in 2015. But the first measures just one short period and the second comes after four years of weaker performance –  and the UK is hardly the best yardstick.

What’s more, Scottish growth is falling sharply below that of the UK and that too is faltering. The economy shrank by 0.2 percent in the final quarter of 21016 versus UK growth of 0.7 percent in the same period – before falling to 0.3 percent in Q1 2017. As the Fraser of Allander Institute has pointed out growth in both services and manufacturing in Scotland is declining. And there’s no doubt worse to come as Brexit bites. And it cannot all be ascribed to the oil industry since the private sector as a whole is hardly bursting with energy/renewal.

The electorate has yet to hear a serious, sustained discussion about any of this, let alone about the long-standing issues of low levels of educational attainment, the impact of an ageing population on both health spending and the budget deficit, the levels of skilled immigration required to make good gaps in indigenous human capital, rising income/wealth inequalities. (The critical election in France, with the real threat of neo-fascist revival in Europe, has passed the Scottish polity and media by. Better to revel in the latest leak from Lanarkshire Labour/SNP…)

Good Society?

These were among the questions we wanted to raise at our first public debate last month – Scotland: the Good Society? Searching for a fairer country. We postponed it as it was overtaken by the snap June 8 general election. Yet we all still need to ask and find answers to these questions: is Scotland genuinely more egalitarian? How does Scotland tackle early mortality, poor health outcomes, rising poverty, educational under-achievement – and with what instruments? Should the Scottish Government throw caution to the winds and adopt innovative, radical measures to close the gender gap? Can the new devolution settlement promote Nordic levels of competitiveness and fairness? Where does the country and its political leaders stand in the European debate between those reconciled to the irredeemable decline of social democracy and those working to revive/reshape it?

Independence supporters will, of course, argue that these questions cannot be answered until…independence. And then, of course, affirmatively. They will cite independent academics like Prof Simon Wren-Lewis of Oxford university who argues that Brexit may cost the UK a ten percent drop in average incomes by 2030 so Scotland could make a long-term economic gain by opting for independence in the EU and/or at the least staying in the single market. But we haven’t a clue whether that option is genuinely alive. Nor do we know what shape Brexit will assume when (or if) it comes – dire on current projections.

Surely, with almost a quarter of Scotland’s total tax revenue devolved as of last month, the country’s political leadership can have a stab at answering some of them, at least initially. Fortunately, some cogent analysis has recently emerged, not least with A Wealthier, Fairer Scotland, book on ‘the political economy of constitutional change’ previewed here by its editor, Prof Michael Keating, in late March. In a nutshell, its authors highlight a ‘reluctance to use new powers’ and what Prof Paul Cairney and colleagues call the ‘modest Scottish models’ of social investment and prevention policies that fall far short of the long-admired Nordic one. It’s as if, torn between the greater opportunities to influence socio-economic outcomes and the greater exposure to risk enhanced devolution brings, the Scottish Government behaves like the famous ‘rabbits in the headlamps.’

As Patrizio Lecca and colleagues argue: ‘Of course, independence per se is not a necessary condition to allow the Scottish Government influence in these (economic, fiscal and social) areas. A greater degree of fiscal autonomy ensures a closer link between economic growth and tax revenues while also allowing enhanced impact on equity and well-being in Scotland.’ They warn, however, that Scotland may have the new opportunity to move to higher tax-and-spend on the Scandinavian social investment model but its open economy ‘makes it particularly sensitive to any changes in competitiveness induced by rises in taxation.’ This is a recurring conclusion among the various authors.

Constraints – or timidity?

There are genuine constraints on intervention. ‘Substantial borrowing to support more egalitarian welfare provision seems to be impossible within current legislation,’ argue Prof David Bell and colleagues in a discussion of inequality which concludes that any reductions will take a long time and will have to be embedded in a very different economy. Similarly, Craig McAngus and Kirstein Rummery conclude in the face of social security remaining a reserved matter: ‘Therefore, it is not within the gift of the Scottish Government to push for an all-encompassing childcare strategy that can truly promote a more gender-equal society.’ Other contributors point out that Scotland, as part of the UK, lacks those Nordic attributes of ‘social solidarity’ and ‘tripartism’ (close links between government, employers and unions as in 1960s ‘Wilsonism’/corporatism) that buttress the Scandinavian social investment model.

But these and other constraints do not explain timidity – and not just in adopting higher rates of taxation as the SNP’s opponents, notably Labour, constantly complain. There has been a failure of joined-up government, a desire to please all interest groups without upsetting any, what Cairney et all describe as policy-makers paying attention ‘to an ill-defined problem’ and producing solutions ‘which proved to be too vague to operationalise in a simple way’. In other words, it has been right to view public spending as a social investment in human capital but the manner in which money has been invested has been too hesitant and pusillanimous.

Nor is it good enough for the Scottish political class as a whole to hide behind evidence showing that Scots are not that egalitarian after all. Of course, as Keating et al show, support for redistribution via higher taxation is not that greater than in rUK: Scots may want a distinctly Scottish welfare settlement but they’re unwilling to pay for it. Perhaps, however, they can be persuaded that higher and targeted public spending to help lift people out of poverty, bad housing and low educational attainment is the right way forward. No grand bargain then, as Keating says, but ‘humdrum’ rather than ’heroic’ policy-making.

But even that requires energetic, forward-looking political leadership willing to take some risks and guide public opinion rather than follow it. The kind of Scotland we want is, certainly, one that genuinely promotes equality of opportunity and encourages equality of outcome as regards use of all one’s talents, that sets its sights on removing poverty and crass inequalities of income/wealth…Does that mean Nordic-style levels of spending matched by higher taxation in order to create greater social security/solidarity? Relying on universalism and the ‘social wage’? Or can one envisage far greater local initiatives, ‘measures-from-below’ and ‘community self-government’, new forms of social/mutual insurance to fund education and health and so on? Such as focusing ever-scarcer spending on early intervention among pre-school children and on childcare? Building affordable (social) and better housing rather than pumping ever more millions into the NHS? Or moving to continental systems of funding via health insurance?

This is the kind of debate we wish to stimulate and spread amongst civil society as much as the political class itself. Depressingly, right now it’s not even on the agenda as politicians retreat into their default mode and refuse to engage in open, committed discussion of Scotland’s/Britain’s future. Is it any wonder the levels of cynicism and alienation are rising? As with Brexit, we risk letting down the young, vibrant, talented community we have here with tired, old and failed policies. And, with widespread, deep-seated disappointment, the risk of right-wing populism. Or worse…

Image by Mark Fowler via Flickr CC BY-NC 2.0

A Wealthier, Fairer Scotland, edited by Michael Keating, is published by Edinburgh University Press £14.99 168pp

 

Comments

  1. Maurice Bishop says

    Nicola Sturgeon revealed in her STV interview a few weeks ago that she had called for the re-do of the referendum without even knowing what the economic arguments are – she’s outsourced that to someone else and is waiting for him to report back.

    You are right: we shouldn’t be rehashing the independence debate. But we have no choice. Because the SNP will not respect the outcome of the 2014 referendum despite telling us at the time that we were voting to settle the matter for a generation.

    So we have no choice but to put independence at the forefront of the GE debate because so long as the SNP continue to obsess with it the Scottish economy will continue to suffer.

    Simon Wren-Lewis of Oxford university who argues that Brexit may cost the UK a ten percent drop in average incomes by 2030,

    SWL teaches politics, not economics. And he states this claim, he doesn’t argue it. By which I mean he makes in in print in his frequent writings in favour of European socialism. But he has not published any papers showing the model he used to arrive at that conclusion so that other economics could evaluate his methodology.

      • Maurice Bishop says

        He teaches “economic policy” at the Blavatnik School of Government. And he is a frequent pundit advocating European socialism.

        His “ten percent drop” claim is the work of a bitter Remainer engaging in rhetoric, not the reasoned calculation of an economist willing to allow his peers to examine his methods.

    • Me Bungo Pony says

      The SNP believed the 2014 referendum would be “once in a generation” as that was the general way of things when it came to referendums. Unfortunately for you, the people of Scotland had a different view and it is them that have kept the issue alive (the last poll had 57% of Scots preferring independence to an ultra-right wing Tory UK government). Never did the pro-indy campaign “promise” anything on the timing of a second referendum. That is merely a disingenuous soundbite that unionists increasingly shrilly throw in peoples faces in the hope enough of them believe it to make a difference.

      As to any perceived “obsession” with indyref2; as the FM pointed out in yesterday’s FMQs at Holyrood, the Tories are the Party most “obsessed” with indyref2 as their election leaflet devoid of ANY other policy proved. The ONLY policy the Scottish (sic) Tories have for both the local and GE is opposition to indyref2. NOTHING else warrants a mention. They are not interested in talking about anything else. And who could blame them as any deviation from that line leaves their abhorrent record open to scrutiny. Much better to pretend the “cuddly wee Ruthie” construct is the real face of Toryism and not the grinding poverty, disabled mobility removals, rape clauses and electoral fraud that is the reality.

      Labour and the Lib-Dems are not much better. Ironically, it is the SNP and Greens that have concentrated more on local govt issues than any unionist Party.

      • Maurice Bishop says

        “the last poll had 57% of Scots preferring independence”

        This is simply untrue.

        The majority of the subset of Scots who voted Yes in 2014 continue to support the SNP in all they do. But for Independence to succeed – not just scrap by in a dodgy re-run – you have to have mass buy-in to the proposition. But the popular trend is moving in the opposite direction.

        By refusing to acknowledge that you lost and the matter is settled for a generation you are pulling the down the Scottish economy.

    • Joseph MELLON says

      Isn’t it the Tories who are pushing the independence/no independence debate because a Brexit debate would be disastrous for them? Scotland is broadly anti-Brexit. The Scots Tories themselves (Ruth D. et al) 9 months ago argued cogently and passionately anti-Brexit, and it is all on YouTube and in the journalists note books.
      Now absurdly they must follow the party line and defend the hard Brexit that the Union Bonus will bring to Scotland.

  2. Fraser Cameron says

    A much needed intervention but doubt whether our political leaders will take notice. Surely there must be a debate about what kind of society we want in Scotland; not just for now but for the next generation.
    I hope a majority would support an open, fair and tolerant society. But Scotland has to pay its own way in the world and hence the inseparable link between education and the economy, plus the third ‘e’ Europe.

  3. Tony O'Donnell says

    Nice to be reminded politics should have substance. And difficult to deny the need for fresh socio-economic policies in Scotland, with a vigorous debate to identify ones we can all run with.But in a future where the economy is no longer linked to the EU, but to a fast-deregulating, ever lower wage UK, it’s hard to see where Scandi-style levels of investment in health,welfare and education are coming from!

  4. Bob Tait says

    David Gow’s excellent set of challenges is to EVERYONE who wants a “fairer” and more prosperous Scotland – whether as part of the UK or as an “independent” state.

    In sum, the challenges come down to these two. What would make that kind of Scotland politically and economically feasible? Which path going forward keeps the possibility open and which is a dead end?

    For UK-unionists, Tony O’Donnell puts his finger neatly on the huge problem they face post-Brexit and under May. Good luck with that – considering in addition how long it may take for the confused and discombobulated forces of social democracy in Britain as a whole to re-group and claw their way back towards being in government.

    For pro-indy EU-unionists like me, considering the adverse current economic and political circumstances in Scotland, Europe and beyond, there is also a huge problem figuring out feasible ways forward, complete with intellectually honest risk assessments. But at least these possibilities remain conceivable!

    So long as that remains so, demands for an indyref2 are not going to go away. Nor should they.

    • Maurice Bishop says

      “intellectually honest risk assessments”

      According to her interview on STV a few weeks ago, Sturgeon called for the second referendum without even doing a “risk assessment” – she has outsourced that to Andrew Wilson and didn’t bother to wait for him to report back.

      Don’t you wonder why these people who have thought about nothing their entire political lives can’t supply you with any convincing economic arguments?

      There is no feasible way forward for independence that doesn’t involve years of Greek-style genuine, savage austerity to generate primary budget surpluses. Which means that independent Scotland will depopulate, as people move to resume the levels of tax and services they have become accustomed to.

  5. Bob Tait says

    Thank you for your risk assessment, Maurice. Its exceptional brevity makes it easy to spot why at best it’s a worst-case scenario and even then very much open to question.

  6. Rod says

    Me Bungo Pony says
    May 4, 2017 at 3:42 pm
    ‘Never did the pro-indy campaign “promise” anything on the timing of a second referendum. That is merely a disingenuous soundbite that unionists increasingly shrilly throw in peoples faces in the hope enough of them believe it to make a difference.’

    Really Bungo……

    https://www.youtube.com/watch?v=6HyUmDuPa6g

    It was the Nationalist’s side of a bus lie! We all know this is Neverendum.

    The divisive nature of referenda is beyond reasonable argument, the economic uncertainty created by referenda is just as axiomatic; pensions, currency, market access, deficit, defence, immigration…..and the Scottish economy is already demonstrably suffering as a result of relentless threats of constitutional upheaval from a (significant) minority who have taken control of the political apparatus.

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