THE debate around the economics of independence has failed to focus enough on the costs of Scotland staying in – rather than leaving – the Union, according to the experts behind a new indy project.
An initiative was launched last week by former SNP MP Roger Mullin and economists Professor David Simpson and Graeme Blackett, which aims to invigorate discussion on the finances of independence.
Speaking to the Sunday National, the trio said the idea for the project had been sparked by a comment that while there had been much focus on the costs of independence, no one has paid “serious attention” to the price of dependence.
Blackett, who was an economic adviser to the SNP Growth Commission, said: “When we started speaking about it, my initial reaction to that was, yes that’s true, that is something we need to address but maybe that sounds a little negative.
“So if we are going to pursue this, what we should do is pursue both the costs of dependence and what the benefits of would be of ‘releasing’ ourselves from that.
“What we have set out to do is to explore some of the fundamental issues that lie behind all of this – so thinking about why is it that the UK seems to be doing so badly, that it has been now for some decades, and why in particular when you compare it against some of the small advanced economies?
“Why do they seem to be accelerating ahead and what does that mean for Scotland?
“That is where the cost of dependency comes in and we wanted to look at the how and why independence might deliver benefits.”
The first paper examined the idea of how a prosperous and thriving society can be created through individuals having “agency” – such as believing they have control over decisions in their life and optimism for the future.
It outlined the argument that Scotland has a choice to make between settling for a state of “relative dependence and helplessness” within the UK or shaping its own future with independence.
Blackett said this was even more important in the context of rapid change that all countries have faced in recent years.
“We have obviously experienced Covid, we have got the Brexit situation, we have what feels like accelerated technological change, we have ageing populations, we have climate change,” he said.
“The status quo does not exist. We are dealing with a rapidly changing world and a world of radical uncertainty.
“We need to have responsibility and imagination, be future-focused, react to things as they happen.
“All of that requires agency – you can’t just hope that someone else fixes it.”
Simpson, who was founding director of the Fraser of Allander Institute at Strathclyde University, said one key point which was often overlooked is that the majority of economic power is held by Westminster.
He pointed to data showing that small advanced independent economies in Europe – such as Norway, Sweden, Denmark and Ireland – have enjoyed a better rate of economic growth than Scotland over decades.
“So it is difficult to escape the conclusion we have been held back by the poor economic policies of the British Government,” he said.
“They, of course, have not made any attempt to improve the conditions of the Scottish economy, apart from the UK as a whole.
“In fact, rather the reverse is the case – under the Unionist governments since 1950, successive Scottish secretaries of state have seen it as their role to negotiate more and more transfers of money from Westminster to Scotland.
“That may seem like a good thing, and it is in the short run, but of course, in the long run, it is very damaging as it means you become increasingly dependent on the person who gives you the money.”
HE added: “Other countries do not depend on handouts from outside their borders and therefore, we should not be dependent on that either.
“We only have to look to comparable economies in Europe to see how far we have fallen behind and what a hole we are in.”
Mullin (above) said over recent decades a poorly performing UK had been “drifting further and further” behind other states on measures such as GDP and wellbeing.
“It strikes me that, politically, there is a complete perversity in the unionist argument, that the poorer the UK performs – and therefore, inevitably, the poorer that Scotland is performing by being wedded to it – the more they say we must remain thirled to this failing UK state,” he said.
“So when they are faced with crisis, when they are faced at the moment for example with high rising inflation, when they are faced with very negative consequences of Brexit and the like, they say things are so bad we have got to remain thirled to the broad shoulders of the UK state.
“The argument means the worst things become, the more we have got to remain dependent on the state that is driving us into this worse and worse situation, particularly relative to other countries.”
The initiative – which is voluntary and does not receive any funding – is planning to publish around a dozen papers on the economic debate in the coming months.
This will include looking at typical measures such as GDP, broader topics including wellbeing and examining how issues such as corruption are affecting the UK’s performance.
MULLIN added: “This started last year when David made a comment to me, which was along the lines of: ‘there has been so much focus on the costs of independence, but nobody has paid any serious attention to the price of dependence’.
“I thought that was a remarkably clear and very important remark, and that is where the initial germ of the idea started.”
He added: “For a long time, I have been worried about the kind of narrative that surrounds economic arguments in this field.
“You get people who are spreadsheet worriers, who think everything can be reduced to a few speculative numbers, as long as it fits in their spreadsheet.
“This is a fundamental misunderstanding of the nature of the economy to begin with and doesn’t help construct a purposeful narrative.”
