The report of the Sustainable Growth Commission, chaired by Andrew Wilson, has been hailed/denounced in some quarters as the death-knell of a Scottish version of socialism and/or a self-imposed prolongation of neoliberal austerity with a Kiwi twist.
Pro-independence commentators on the Left are angry that it appears to reduce an “independent” Scotland to a “vassal state” (h/t JRM) of the Bank of England, Westminster/Whitehall and Brussels.
Here is a selection of comments/analyses with links to the original(s):
George Kerevan, ex-SNP MP/economics journalist, is a disappointed leftist in The National:
The report sticks to the very currency option that helped defeat the independence proposition back in 2014 – keeping sterling. Andrew recommends using the pound for the medium term (10 years plus). Even then, somebody unspecified – the Scottish finance minister, Holyrood, the electorate in a referendum? – must use six rather nebulous tests to decide if it’s safe to set out own interest rates and external exchange rate. Adding these new tests only compounds what was a disastrous policy during the last IndyRef.
The report provides excellent ammunition to prove independent small industrial nations outperform the lumbering bigger ones. However, by elevating three particular countries – New Zealand, Denmark and Finland – as role models, the Commission risks a hostage to fortune. New Zealand’s experiment with neo-liberalism has been an unmitigated social disaster, Denmark is facing a rising tide of anti-immigrant fascism; and Finland has had to invoke massive austerity policies because interest rates are set in Brussels.
To my mind this is the most impressive economic document to have appeared in Scotland since we got devolution in 1999.
But what I like most is how the report directs our gaze away from the quibbling grievances of the past towards the opportunities of the future. It us a free Scotland will be a new kind of country, a country of the twenty-first century, not forever digging up the grave of 1707 or griping about Thatcherism. In Andrew’s own words, “Hope must conquer fear … but that hope needs to be grounded in clear-sighted reality and a rigorous plan.”
All to the good, then, that the report is written (mostly) by professional economists rather than as an exercise in political partisanship. It is a serious piece of work that deserves to be taken seriously, both by Unionists whose first and mistaken knee-jerk reaction is feigned scorn and contempt, and by left-wing nationalists whose suspicious mutters can already be heard.
All this means an independent Scotland will join the global capitalist system, no ifs, no buts. This is in fact the only course the future nation can follow, unless we want to join a socialist bloc with Cuba, Venezuela and, erm, North Korea.
Even so, Andrew Wilson may find his work cut out in selling this prospect to a Scotland, and to an SNP, where too many still believe socialism makes sense and that our nation, by a simple act of will, can have it.
Darren ‘Loki’ McGarvey, essayist/commentator/rapper, new BBC QT star, pro-Yes in 2014 but he now hae sae doots, in his The Scotsman col:
Oddly enough, the hardest thing to do these days is change your position. Which is why I think the report is important, even if I disagree profoundly with its conclusions. You see, my intuition was not merely that we ought to be independent, but also that the proposal should be a radical one. A genuine alternative to how business is conducted in the UK, where too many have become desensitised to the violence of austerity. Now my intuitions face a new dilemma: the party I once voted into power, believing they could deliver an imaginative, “trouble-making” form of independence, have produced an economic prospectus so demoralisingly timid that I must assume they’ve binned the wish-trees and terrible poetry, in favour of trying to tell the truth.
Then again, if social justice is my desire, as well as a rejection of austerity as an ideology, then this report, which largely accepts the precepts that give rise to it, forces me to reconsider my priorities as a Scottish citizen – not just as a member of a political movement. For if the big idea is simply to rebrand the fundamentals of the UK economy, so that independence becomes more attractive to those whose entrenched advantages are threatened by a radical alternative, well, that’s a very different proposition, isn’t it?
Iain MacWhirter, writer/journalist, chronicler of the independence movement, “not SNP nor a nationalist,” in one of his more caustic Herald cols:
Perhaps the SNP think that a bit of cold realism will appeal to presbyterian Scots. It certainly appealed to unionist blogger Kevin Hague, who “applauded the realism” of the Growth Commission because it accepts his analysis of Gers deficit figures – which it does. Those SNP MPs will have to unblock @kevverage on Twitter now they are on side. The Keynesian finance expert, Richard Murphy, of Tax Research – a prominent ally of independence – on the other hand called it a “disaster” for Scotland, and said the Commission was “the slave of pre-crash economics and a proponent of everything that is oppressive about neoliberalism”.
The Growth Commission opts for what looks rather like the worst of both worlds, setting up a kind of Scottish currency but pegging it to sterling for the foreseeable future. A Gordon Brown-style list of “six tests” have to be met before an independent currency could be contemplated. This “Panamisation” as it’s called would appear to mean Scotland could not print money or devalue in an economic crisis, and could find itself in the same predicament as countries like Greece. Critics say the Scottish Government would be left with no option but to further increase taxes and cut spending in order to balance the books in a process called “internal devaluation”. Perhaps this is better than Venezuela, but not exactly a great way to kick start a new social democracy, boost public services and cut poverty by 50 per cent.
The report by the Growth Commission is a substantial body of work.
Overall, the Sustainable Growth Commission report intends to move the public debate forward from 2014 in a rigorous way. Reports in yesterday’s media predicting households being better off by £4,100 – figures which should be taken with a large pinch of salt – unfortunately only undermine this aim.
But irrespective of your views on independence, there is much to be taken – by all political parties – from the report’s discussion of ideas for growth.
Many of these are possible with the existing suite of devolved powers.
Market sentiment will be crucial. As the report highlights, independent countries of Scotland’s size tend to run prudent fiscal positions. No small country listed in the report is currently running a fiscal deficit of 6%. How markets react to this, and their view of the credibility of the proposed deficit reduction plans, will have important implications for the interest charges that Scotland will pay and the speed and scale of the repair job needed.
Nicola Sturgeon, First Minister, who announced #indyref2 in March 2017, backtracked and is now, well, up for it (sort of):
The Growth Commission is right that in order to raise our performance we must target increases in our population, ensure that all in our society are able to participate fully in the economy and drive forward improvements in our productivity that will boost our growth rates. The Scottish Government is working hard to achieve that with the powers of devolution, but as well as offering new ideas for what we can do now, this report sets out how much more could be achieved with independence.
This report rightly doesn’t shy away from the challenges we face but presents ways in which those challenges can be addressed – and sets out recommendations on currency – which as a country we should all debate and discuss.
Scotland is now in a very different political and economic situation to 2014. There is no status quo and we know that being taken out of Europe and out of a market around eight times bigger than the UK market alone will hit our economy. That is why it is time to begin a fresh debate and to replace the despair of Brexit with optimism about Scotland’s future.
Meanwhile, an exchange on Twitter between Ross Colquhoun, SNP head of digital and ex-founder National Collective, with Jonathon Shafi, Radical Independence Campaign co-founder, (and others):
Readers may also consult Common Space, Mike Small of Bella Caledonia on “new magical thinking” and Joyce McMillan on the unjust global economic system among many others. Sturgeon has called for a debate throughout the summer and beyond and we welcome contributions here…