Economics of Independence

Welcoming “Scotland’s Future: Your guide to an independent Scotland”

scotlands-economy-paper-facts-and-figuresToday witnessed the publication of the most crucial source of information in the referendum campaign.

The Scottish Government White Paper, ‘Scotland’s Future’, is a solid 670 page, 170,000 word, evidence based document on arranging, establishing and delivering the benefits of an independent Scotland.

It comprehensively answers 650 questions on independence covering all the topics we expected and more. There are now far more unanswered questions with a No vote than with a Yes vote.

It also sets out some of the huge opportunities that exist for Scotland – its citizens and businesses – with control over taxation, spending, regulation, immigration and global promotion.

Scotland will be wealthier

The economic evidence is clear that Scotland will be better off as an independent country. With a stronger fiscal position and without the drag of Westminster’s massive debts, Scotland will be far wealthier. The White Paper also outlines the massive assets dividend of £1.3 trillion that Scotland will gain its fair share of from voting Yes (page 30). This number transforms the economic debate when you factor those assets into Scotland’s economic strengths.

The White Paper provides extensive information on how Scotland as a wealthy nation can become a wealthy society. This includes Scotland current position of providing 9.9% of UK tax, while only receiving 9.3% of UK spending; the more than £500 million defence dividend saving; and the opportunities of using economic levers to boost the competitive advantage of key sectors in Scotland. Scotland has provided more tax per head than the rest of the UK for every year for 30 years.

Scotland will cooperate closely with its neighbours

It also provides substantive information on what unions and partnerships will be maintained between Scotland and the rest of the UK after independence. This includes the social union (family and cultural connections), freedom of movement , capital and trade, the Queen as Head of State, the currency union, as well as membership of the EU and NATO.

The currency union, in particular, is in the mutual best interests of business North and South of the border. As previously explained by Business for Scotland, this maintains rUK’s trading relationship with Scotland. Scotland is the rUK’s most important (and second largest) export market, so jobs across the UK depend on maintaining an open trading arrangement. The strength of the pound is also dependent upon oil and gas related exports as well as food and drink related and other manufacturing and services exports from Scotland, which protects the Sterling balance of payments.

A Yes vote is not about “separation” but about Scotland voting to become an equal and independent nation which will cooperate fully and in closer and more equal partnership with its neighbours. Separation is not on the ballot paperThis detailed and fully costed positive vision for Scotland is a clear and credible roadmap to a better Scotland – one that is wealthier, fairer, greener and economically sound.

A clear and smooth transition is in the interest of all business

We are in a strong and well prepared position to start from after a Yes vote. The transition period from September 2014 to March 2016 is also explained in full. The document explains that negotiations to take place over 18 months, the average timeframe it has taken other countries which have become independent in recent decades. The UK’s legal adviser Professor James Crawford of Cambridge University describes this timeframe as “reasonable”.

Independence provides massive opportunities for business

The short and medium term opportunities of independence are most evident in sections which deal with the opportunities of political and economic empowerment.

The recent report ‘Economic Policy Choices in an Independent Scotland’ recently outlined such economic opportunities. The White Paper recommends putting several of these options into practice.

Business for Scotland will cover these in greater detail in a further piece.

Childcare

We welcome the commitment on childcare provision, which ensures that barriers to participation in the labour market, especially for women, are reduced. Business and the economy thrive with a high skilled labour market with opportunities for all. Doubling free nursery education for 3/4 year olds can increase productivity of the labour market and therefore substantially boost tax intake. This follows the childcare model of many successful EU nations. Such opportunities for business are only available with independence because we will have control over our resources to fund these type of tailored solutions.

Wages and jobs

Similarly, the commitment to provide strong services and minimum wage guarantees provides an effective support to the market economy. Within the UK depressed wages have reduced demand, especially for small and medium sized businesses. Well paid, high skilled jobs will be the foundation of Scotland’s economic future.

Exports

Crucially, the ambition to increase Scotland’s exports by 50% can provide a boost to industry and in doing so create as many of 50,000 new jobs. Scotland’s new international significance is an opportunity to promote Scottish produce and services, especially with food and drink, tourism and agriculture.

This demonstrates that independence – rather than concerning scare stories, negotiations and process – is the ability for Scotland to make better decisions than Westminster governments.

The correct mix of fiscal policy, economic incentives, social service provision, regulation and international promotion can make Scots far wealthier with higher standards of living and satisfaction.

That proposal has now been outlined and the opportunities and proposals it contains can be subject to scrutiny.

No vision for Scotland from the No campaign

Yet where is a similar document of proposals and opportunities for business from the No Campaign?

Instead of repeating old fears and smears against independence, the No Campaign must outline what opportunities lie ahead for businesses in Scotland to grow and prosper.

Naysayers are also challenged by the huge uncertainties caused by Westminster potentially dragging Scotland out of the EU, the lack of detail over further devolution of powers and threats to unroot the Barnett formula governing Scotland’s funding arrangements.

The people of Scotland can no longer ignore the damage that a No vote will cause to Scotland’s economy. A sustainable economic recovery is only possible with a Yes vote.

Conclusion: a fundamental shift in the independence campaign

Today represents a fundamental shift in the independence campaign. The risks of an uncertain future with Westminster remain undefined. People and business in Scotland will remain open to the threat of detrimental policy from Governments not elected in Scotland.

In contrast, a concrete legal, political, economic and social transition to independence has now been published. It provides the detailed information and evidence of Scotland’s strong economic foundations that will build confidence in Scotland’s abilities. Most crucially, it details some of the opportunities that independence will provide so that Scotland can be rich, successful nation where business can thrive.

About the author

Gordon MacIntyre-Kemp

Gordon MacIntyre-Kemp is the Founder and Chief Executive of Business for Scotland. Before becoming CEO of Business for Scotland he ran a small social media and sales & marketing consultancy.

With a degree in business, marketing and economics, Gordon has worked as an economic development planning professional, and in marketing roles specialising in pricing modelling and promotional evaluation for global companies (including P&G).

Gordon benefits (not suffers) from dyslexia, and is a proponent of the emerging New Economics School. Gordon contributes articles to Business for Scotland, The National and The Huffington Post.

2 Comments

  • ‘It comprehensively answers 650 questions on independence covering all the topics we expected and more’.

    Does it? I’m not so sure. If it comprehensively answers these questions, what are they finding to argue about?

    All that’s going to happen is that each side will basically call each other liars until the day and then hope the public – by this time bored shitless with them and their posturing – will vote their way.

    I doubt if very many people who are going to vote will even read any of it – let alone all 650 questions. I know I won’t.

    I’ll be voting ‘Yes’ but only because I want a change, not because I have any faith in the SNP. That said, they’re the only game in town if you want genuine change that isn’t skewed by London.

    Anyway, Gordon, keep at it – maybe it’ll go our way, eh?

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