Sunday , July 14 2024

It’s only the SNP that holds Scotland back.

I have long held the view that Better Together ran a terrible negative campaign that nearly cost us the referendum in 2014. For this reason my response to the SNP’s latest attempt to encourage more Scots to support independence is not going to be to explain why Scottish independence is impossible. I think everyone in Scotland should accept that Scotland could be a perfectly prosperous independent country. The issue is not and never has been could we? Rather it is should we?

There are any number of places which have become independent in recent years with various degrees of success. Since the fall of the Soviet Union many new countries have emerged in Eastern Europe helped also by the break-up of Yugoslavia.  Most of these countries have either their own currency or else they use the Euro. If these places can become independent and have their own currency then plainly Scotland could do so also. We are very much wealthier than, for example, Moldova.

In my view independent countries ought to have their own currency. The pain of the economic crisis in 2008 was greatly reduced for both the UK and Iceland because we each had our own currency. The UK avoided some of the difficulties which were faced by countries like Greece, Italy and Spain, because we had our own Central Bank and because we were able to devalue our currency.

The SNP plan as far as I understand is to continue using the UK Pound unofficially after independence for a good number of years and then if conditions should allow to move towards creating a Scottish currency.

Again this would, no doubt, be possible. I think Pro UK people should be careful not to exaggerate the costs of doing so. Iceland’s population is not much more than Aberdeen’s, but it managed to set up its own currency. Lots of countries have done so. It can’t be that hard.

But the SNP’s plans with regard to currency would rule out Scotland joining the EU in the near future. A condition for EU membership is that a country promises to join the Euro, but this requires that it has its own currency and Central Bank. An independent Scotland initially would have neither.

If Scotland did eventually set up its own currency there would, of course, be downsides. There would be a cost depending on whether the currency was free-floating or  pegged against either the UK Pound. Free-floating would be cheaper and in some circumstances better economically, but it would have an effect on our trade with our nearest neighbour.

The vast majority of Scottish trade is with the other parts of the UK. Having a different currency to your greatest trading partner can hardly be described as an advantage. Likewise ceasing to be a part of the UK’s Single Market which would be an inevitable consequence of Scottish independence would have an economic downside that the SNP never appear to take into account.

It is easy to point to small countries that are doing rather better than Britain. Some of these countries are wealthier than us because they have small populations controlling large natural resources. Others are wealthier because their Governments have policies which are more effective economically than ours. Still others have workers who are more productive than ours.

There isn’t a magic formula that brings prosperity, but I tend to think that free markets, low regulation, low tax economies will more likely than not bring wealth to their people. If an independent Scotland were to follow the policies of Singapore, there is little doubt that in time we would reach Singapore’s level of per capita GDP. But the same could equally well be said of the UK. Those same Singapore policies might well  increase the wealth of  pretty much every country. But that doesn’t mean it is straightforward to follow these policies. If creating wealth were simply a matter of imitation and imitation was as easy as the SNP thinks, then why isn’t every country as wealthy as Singapore?

What really is the point of saying if only Scotland were more like Denmark, for then we’d be as rich as the Danes. It’s like saying if only we were as hard working and efficient as the Germans, we’d all get to drive in a Mercedes.

It isn’t easy for a country to change the fundamentals of its economy. These fundamentals are a function of its historical development. You cannot suddenly live like a Dane, work like a Dane and take on aspects of the Danish economy as if it were a matter of putting on a hat with Viking horns on it.

The Scandinavians, for the most part, make a success out of high taxes and high public spending, but in my experience and I once lived in Denmark and spoke the language fluently, they have a different mentality to ours. That mentality took centuries to develop.

I think high taxes and high public spending would make an independent Scotland poorer than we are now. Many countries have tried social democracy/socialism and few have ended up like Denmark. The Danes are hardworking, innovative and good at business despite their high taxes. But it is Danish businesses and the work that ordinary Danes do that has made them wealthy, not their Governments. Above all the Danes are conformists. They follow rules and for the most part they are happy to work hard even if they could do nothing on benefits instead. They don’t generally take the Mickey out of their welfare state’s generosity. That is why their system works well enough for them, but would not necessarily work well for us. They are taught from age 0 to be good little Danes and they want to be that. Scots have nothing at all in common with this mentality and nothing much in common with Scandinavia. The places we have most in common with speak English. Funny that.

While the Scandinavians have achieved success with high taxes and high public spending, most small countries reach prosperity by cutting bureaucracy, public spending and taxes. An independent Scotland could do the same, but once more so could the UK.

There is something foolish about pointing to other countries and saying we could be like that. Of course, anyone could. But it doesn’t mean that it would be easy or indeed that it would happen at all.

Large countries like the United States are more prosperous than present day Scotland. If we followed similar policies to the US we would no doubt improve our prosperity. But then again Shetland could be more prosperous than Scotland if it emulated the Faroe Islands and had exclusive access to the marine resources around it. If Scotland could be like Denmark, then Shetland could be like the Faroes. The argument is the same.

But the point to realise is that none of these possible models for future prosperity require Scotland to be independent. Scotland right now could raise taxes to Danish levels and could consequently increase public spending. We could also cut income tax and reduce the regulations that inhibit Scottish business.

I believe the UK as a whole could become much more competitive if we lowered public spending, lowered taxes and promised not to impose trade tariffs on any imports no matter what.

What hinders us from doing this? Well mainly the Lib Dems, Labour and the SNP.

I oppose Scottish independence, not because I think it is impossible, nor because I think Scotland would necessarily be poorer. Our future prosperity would depend mainly on creating a small government that interfered as little as possible in the economy. Our economy would then depend on the efforts of ordinary Scots to study hard, create businesses, products and services that people actually wanted to buy.

None of these things are impossible, but then again none of them are impossible in Scotland right now. Prosperity is not impossible in an independent Scotland, but nor does it require independence.

However, everything I seen about the SNP over the past few years tells me that the likelihood of them creating an independent prosperous Scotland is small. The SNP gained power by promising free this and free that, even though none of these things are actually free, but rather paid for by taxation. The SNP always wishes to centralise power rather so that it rests with themselves rather than allowing individuals to make their own choices. This suggests that an independent Scotland would be hindered because too many Scots would wait for independence to bring them prosperity rather than by using their own efforts to create that prosperity.

The SNP themselves at least in the short term would cause independence to be a disappointment.

But anyway I oppose Scottish independence, not for this reason, but because I am British and have and want to have a shared identity and citizenship with everyone who lives in the UK. I want all of the UK to be prosperous, not just Scotland. I think the UK is a great country with a marvellous past that has made us the way we are, but perhaps an even better future now that after Brexit we will be more in control of the path that we choose to take. We can use the full sovereignty we will regain to create a low tax, free enterprise, free trade hub off the coast of Europe. We can do much better than we are doing now. We can all be much more prosperous.

There isn’t an optimum size for a country. Singapore is tiny. The United States is huge. It’s not independence in itself that brings with it prosperity, it’s sensible economic policies, living within your means and creating successful businesses. There is nothing about being a part of the UK that hinders or prevents Scotland following policies that might increase our chances of creating wealth. Quite the reverse, the kind of free market, small government policies that tend to lead to increased wealth are more often than not opposed by the SNP. They then blame someone else for their own failure at running our economy.

What hinders Scotland the most however is that the SNP go on and on about independence. Business hates uncertainty. The prospect of having to go through yet another SNP attempt to drum up support for independence makes huge numbers of us weary. The prospect of ever having to go through the division and acrimony of an independence campaign fills millions of Scots simply with dread. These sort of feelings do not a successful economy make.

If the SNP put a fraction of the effort its puts into its never-ending push for independence into actually trying to make Scotland a wealthier more pleasant, happier place to live, it might find that in time we would quite soon approach Danish living standards. But I strongly suspect the SNP would rather we were poor and independent, than even a much more prosperous part of the UK. There’s nothing wrong with Scotland nor with our prospects. It’s only the SNP that holds us back.

This post was originally published by the author on her personal blog:

About Effie Deans

Effie Deans is a pro UK blogger. She spent many years living in Russia and the Soviet Union, but came home to Scotland so as to enjoy living in a multi-party democracy! When not occupied with Scottish politics she writes fiction and thinks about theology, philosophy and Russian literature.

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