Economics of Independence

Submission to Smith Commission from BfS Edinburgh Group

The following statement is the submission from the business networking group ‘Business for Scotland’ Edinburgh Group. It supplements and supports the other submissions from Business for Scotland, including it’s Declaration and Vision Report.

This group has an overarching aim; to ensure that the best business and economic environment is developed and sustained in Scotland for the benefit of its people, through the delivery of a prosperous, engaged society that truly reflects the needs, wants, and will of the people of Scotland.

This particular report is not the official submission from Business for Scotland to the Smith Commission.  Please keep an eye out for our official submission in the next few days.

Politicians representing Scotland's main parties meet in Edinburgh.

Politicians representing Scotland’s main parties meet in Edinburgh.


Our Main Affirmations

1. We believe the fundamental principle that Scotland, as an economic, geographic, cultural and social construct as a Nation, would best serve its populace and prosper in direct proportion to its proximity to being fully Independent.

2. We believe that analogous to a commercial company and it’s strategic and operational requirements for necessary decision-making and unfettered operation, for Scotland to prosper it must have full control over its financial, economic, strategic and political affairs; requiring as with a business or company, those instrumental levers as a fundamental, necessary condition for good governance and operation and therefore having the fullest control over income and expenditure, tax, borrowing and investing. Essentially, having the strategic and fiscal capabilities to set and carry out its own affairs as it would wish, in line with the strategy and objectives that it has set. This makes good business sense.
3. We believe that the United Kingdom is a failed state; it is no longer ‘fit for purpose’, particularly as an efficient or effective economic entity. It is highly unbalanced economically, and is fiscally run to benefit only the few, not the many; where regardless of the origin of economic power or value, the delivery of benefit is almost wholly centred in one small geographical location around the South East. Radical change is required.

4. We believe that a better Nordic/Scandinavian-type society is both achievable and desirable, and indeed a superb starting point to create and foster a socio-economic system that is more progressive, democratic, fair and modern, and best serving the interests of the people of Scotland. Whilst we unequivocally believe that this can only be achieved through full independence, it is right to work towards achieving this vision within the current and developing political and economic environment, and we will thus continue to fight for the right for the Scottish people to secure the fullest
control over their own affairs.

5. That the suitably rapid expediting of, and acting upon, the Commission’s recommendations should not in any way be tied to, or impeded by, the issue or prospect of a restructuring of governance in other parts of the UK. Scotland is not a
region of the UK but is, and should be treated and respected, as a Nation within a collective of equal Nations. Whatever the outcome of the Referendum, it was not a vote for UK-wide change, but only for significant change in Scotland and its relationship with the rest of the UK. This is self-evident, but does need to be respectfully, firmly and indelibly scorched into the minds of those who make up this Commission.

6. It follows that any major change to Scotland’s place within the UK requires only the domestic Scottish-based representatives of Scotland and the assent of it’s people to make it so in terms of a democratic process and decision; in addition to any substantive change following this and other initiatives therefore, the Scottish Parliament structure and constitution should be unassailable and not prone to any change of Government, whim, or further Westminster interference that may block or indeed negate, future constitutional or legal arrangements agreed and authenticated by the people of Scotland (including the Scottish Parliament’s own existence).

7. All parties must now move forward in the kind of spirit and intention espoused by Treaty that is the Edinburgh Agreement (2012), and in good faith. The advent of a Yes vote would have held both sides to a binding agreement and covenant to progress together in a spirit of shared respect and generosity; the Commission now must ensure a binding resolution is similarly invoked to turn pledges and promises from the UK Government into deliverables.

Learning from Devolution

The current devolved Scottish Parliament within the framework of the United Kingdom has demonstrated, to good effect, what can be achieved when the basic but established tenet of good governance is followed: decisions are better made by the people that are most affected by them; those decisions are enabled and supported more satisfactorily in direct proportion to control over income and expenditure, and in tandem with the ability to set strategy.

The ‘devolution experiment’ showed conclusively that decision-making that is conducted closer to those that would wish to make those decisions, and whom they affect, results in altogether better outcomes. And in more popular Governance.

The Commission

This Commission should be viewed and conducted in line with the spirit of the Edinburgh Agreement; that is, to work to remedy the fact that ‘promises and pledges’ made in the Referendum campaign period by the main UK political parties (including the ‘purdah’ period) are meaningfully delivered as a baseline foundation from which to deliberate further. Anything less than that will be an effrontery to democracy and justifiably render this Commission and its findings or recommendations void and justifiably precipitate legitimate political, legal and moral action on behalf of the people of Scotland, to deliver full independence.

The ‘No’ vote that prevailed in the referendum does not sanction or mandate the UK government to consider adding a minimum level of further self governance, to the existing devolution structure. It if anything, the vote sanctioned the opposite. It was given in anticipation of a maximum level of powers and capabilities and must therefore be seen as endorsing a position as close to independence as possible. This is in marked contrast to the prevalent view from London and the Media that the Commission should be looking to ‘add to’ the current devolution arrangement. This is not a simple principle of subsidiarity.

Everything should be devolved apart from specific, agreed, reserved items – but those items must be expressly agreed with, and by, the democratically elected representatives that are elected in Scotland, and hence must reflect the ultimate sovereignty of the Scottish people. It is not for those that populate London, Westminster or Whitehall to limit, decide or confer. Nor indeed is it within their competency. Again, anything less than a true reflection of will, that results in an express and sanctioned agreement will be a travesty of democracy, a stitch-up and a lost opportunity to produce something of profound and lasting merit.

The Democratic Deficit and the March towards a Modern Democracy

The Commission should meditate on the fact that the Referendum was proportionately the largest and most multi-faceted whole-scale engagement of an electorate in the UK for decades; it behoves the Commission to reflect on this and that this unprecedented degree of legitimisation and demonstration of democracy has ‘lifted the bar of expectation’ that the Scottish Electorate now has of its political systems and representatives, and they expect those now to deliver for them.

The current ‘democratic deficit’ is of course debatable, depending on perspective; yet what is clear is that things on both and all sides are not as they should be and any deficit needs to be addressed convincingly and completely. If that democratic deficit is not reduced to the point that most of the Scottish people would wish it (that is, the aspirations of the overall majority of the electorate, whether they voted Yes or No in the Referendum), then it should be clear to the Commission that the only way to resolve this would be when, and how, Scotland chooses to take the step to full independence unilaterally.

An elected majority of Nationalist MPs in the forthcoming Westminster General Election, coupled with the established majority Nationalist Government in the Scottish Parliament, could result in an immediate move to conduct another Referendum on Independence, based on an unassailable mandate whilst exposing the growing democratic deficit; and the Scottish Electorate’s full representatives would be rightly emboldened and their actions further legitimised by any failure of this Commission to deliver (due to the latter’s acquiescence to the primacy of the UK Government).

The Commission thus needs to ensure that it recommends substantively more that this ‘baseline foundation’ and any subsequent non-movement on the part of the UK Government will give the people of Scotland all the rights that they need to conduct another Referendum and take the last steps to Independence.

Moving Forward

We therefore assert that a good starting point for the Commission is to work backward from full Independence to this baseline foundation; that is, taking an ‘Ockham’s Razor’ approach to the Commission’s challenge: to begin from an assumption that were Scotland currently independent from the UK, what areas should be shared that best suits Scotland, and indeed, all Nations within the UK? That would lead to a more equitable position and progress, and reduce the public cynicism related to this Commission. There are an infinitive number of permutations that the Commission could consider whether as a starting point or end, but the simplest of all hypotheses is one where Scotland is already
independent, and this starting perspective prevents discourse and deliberation becoming unnecessarily complex. Looking at where there are existing and likely competing agendas, aspirations and desires between the Nations making up the UK, is a fantastic and logical place to start. Where there are competing or different agendas, it makes sense to encourage and create distinct demarcation between the Parliaments and Nations along those lines.

Similarly, contradictions such as the much peddled and cognitive dissonance that is the ‘subsidy myth’ (yet if thought through, is actually a condemnation of the UK State, rather than a puerile view of Scotland’s place in it), and the ‘West Lothian Question’ could be ably and deftly mitigated by such an approach. All this needs is the courage and resolve to do something exceptional.

Likewise, any existing assets, debts and other ongoing areas relating to the ‘UK Balance Sheet and Profit & Loss Account’ that have to be resolved due to any new arrangements, must also be negotiated on that premise; to prevent continuation of anomalies such as the incessant massive expenditure on projects that have no benefit to, or explicit agreement of, the people of Scotland. The UK Government’s Business Secretary Vince Cable described London as ‘a giant suction machine draining the life out of the rest of the country’ – and it much be asserted and recognised here that economically, and in business or industrial terms, London and Westminster strategises and creates policies that benefit that area, rather than the profile of industry sectors and interests that lie outside of that city.

The case for total fiscal and other political responsibilities and capabilities to be fully devolved, is therefore apparent and undeniable given the above statement from Cable and in reflecting not just varied interests outside of London, but the very different societal needs and make-up of the economy here in Scotland. Even the Liberal Democrats so-called Federal option does not give adequate powers on social welfare and pensions, an example of two areas of competence most certainly required to support and work with any devolved business and fiscal decision-making and control. There are too many additional examples of these differences, and the need for the levers to address them, to list them here (such as Energy production and policy, Immigration/Population levels, little control over the nature and funding major UK capital / infrastructure projects, Oil Wealth / Fund, and Broadcasting); yet each and every one of them make the unassailable case for devolving full powers to nurture Scottish businesses and its distinctive economy, and to maintain and grow its many existing and potential competitive advantages.

Retention v. Release

We maintain that progress must not be beholden to a ‘de minimis’ position or objective. Devolved power, as with Independence, should however be the construct of the people of Scotland, and they should choose what ‘devo-max’, or ‘fuller powers’ actually mean, unconstrained by dogma and the vested interests of those they would wrestle power from.

The scope of this Commission should not be a question, or deliberation, about ‘what powers and trinkets should be reluctantly given to Scotland’, but of ‘what progressive arrangements can we put forward to the Scottish people to sanction, within a mature negotiating environment that would enhance the society, economy and prosperity of Scotland’. It is not about what powers and levers should be retained by Westminster and the UK state, but what is required to be released to and by Scotland and in turn welcomed and revitalised by its people, so that they can progress, prosper, and be a ‘beacon for democracy and change’ for the rest of the UK. Indeed, it could lead to potent and popular ‘reciprocity’ between the Nations and the respective Governments.

This Commission can, and should, decide whether it is to truly provide a lead in advocating and revitalising democracy and subsequent prosperity and life-enhancement within these isles, or is simply constituted as a damage limitation exercise and instrument of a stagnating and over-centralised UK State.

It cannot be both.

David J, Hood for Business for Scotland Edinburgh Group, October 2014

About the author

David Bell


  • It’s funny that after 45% of Scotland votes to get rid of the Lords system, the UK government appoints a “Lord” to oversee the commission to appease the 45%, especially after the House of Lords unanimously objected to the dissolution of the Union! Their biggest objective is to come up with something so complicated that no-one should be able to make any sense of it (like who knows how the Barnett formula actually works, what’s included and not included?) or something which will in the end be negative and the taxation and management can be blamed on the Scottish government. If I’m wrong I’ll eat my kilt! But we should show willing so that it can’t be said that we didn’t accept the 55% vote.

  • Wonderfully articulated and a really strong statement of intent here!
    Thanks to David and others who were involved in preparing this article, as it is a rallying call for all of us involved in the ongoing campaign.

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