CHAPTER 4 SCOTLAND’S SEPARATISM IN THE CONTEXT OF
4.1 Argumentations Presented by SNP
4.1.2 The Economic Case
國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
On the other side of the spectrum, there are concerns that even though the arguments that SNP have are patriotic and hold good, however, it cannot be guaranteed that the quality of democracy in an independent Scotland will evolve to be at the same level as other developed European democracies. There are various social and cultural factors that set Scotland apart from their Nordic neighbours and the reinvigoration of democracy will lead to a confrontation of powerful contemporary trends. These include having to deal with greater individualism, the fragmentation and diversification of mass communication, and the increasing influence of corporate power. In addition to this, if Scotland had achieved independence and revolutionized their democracy, it would still not alleviate Scotland against the dominance of London considering even if Scotland were independent, Scotland would still have to negotiate and collaborate with the UK on an economic and social union. Scotland and the UK would have to cooperate on academic and cultural institutions alike. Furthermore, support from England will still be formidable since they share a common language with Scotland and London’s status as the UK’s sole ‘global city’ will be significant in the long run.232
Faced with these difficulties, the path to a better democracy may be a rough one. The claims in which SNP base their democratic case on can be seen to be that the SNP guarantees that the government of Scotland will align with the preferences of the Scottish voter, and that the democratic decision-taking will be equal to that of the other developed European countries.
4.1.2 The Economic Case
The economic arguments produced by the SNP are ones that are especially important to the case of independence. Scotland’s status in the UK means that they are subordinate to Westminster Parliament and thus, Scotland cannot fully develop a comprehensive initiative for full development for Scotland’s own welfare and its contribution to global welfare. The
232 Maxwell, S. (2012), Evidence, Risk and the Wicked Issues: Arguing for Independence, Edinburgh: Luath Press (Viewpoint), p. 48-49
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
economically viable question for Scotland is one of the most significant in SNP’s case for independence as that is the one which most people are concerned about. A summary of the main arguments can be demonstrated by the image below produced by the SNP. This thesis will further go into detail on the arguments that can be seen in the image.
Figure 3: The Economic Case by the SNP
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
‧
The calculations for an economy are always challenging, however, it is even more so for Scotland since it is part of a union. Estimates are based on static analysis and they are always contested. For Scotland, in 2007, First Minister Alex Salmond declared that “Scotland’s economy has suffered from decades of mediocrity. Over the last 30 years, Scotland’s growth has averaged just 1.8 per cent – around a half of the average rate of growth for small European countries. And over the last 25 years, this same figure can be compared to the UK’s growth rate of 2.3 percent.”233 However, it is likely that these figures may be questioned considering estimates are not always fully accurate. Scotland has been voted “European Region of the Future”
twice in the past four years, thus demonstrating its potential as a business area and having a resilient and diverse economy.234 In addition to this, a monthly survey conducted by the Bank of Scotland demonstrated that Scotland’s economy had a “solid footing”235 at the end of 2014 and reports that it will increasingly expand in 2015, albeit at a slower rate than 2014. All of this information illustrates that Scotland has an economy which is steadily rising and is continuing to do so in the near future thus, exemplifying a stable economy.
“Scotland’s finances are stronger than the UK’s as a whole to the tune of 4.4 billion pounds – that’s 824 pounds for every man, woman and child in Scotland.”236 Not only this, but they explain how the North Sea oil and gas, which is worth up to 1.5 trillion pounds will produce a forecasted tax revenue of 48 billion pounds in the next six years.237 In addition to this, Scotland holds 25% of EU’s offshore tidal and wind energy potential which is estimated to be worth 14 billion pounds per year and with developing industries such as tourism, food and drink (including whisky), the financial sector, engineering and life sciences; the SNP argue that more wealth can be generated for Scotland.238
233 Government Economic Strategy, http://www.scotland.gov.uk/News/Releases/2007/11/13122603 [Last Accessed:
November 30th 2015]
234 Scotland: The Official Gateway to Scotland, Business and Economy, http://www.scotland.org/about-scotland/business-and-economy/ [Last Accessed: November 30th 2015]
235 BBC News, “Scottish Economic Expansion ‘set to continue in 2015,’” http://www.bbc.com/news/uk-scotland-scotland-business-30767186 [Last Accessed: November 30th 2015]
236 SNP, http://www.snp.org/referendum/the-new-scotland, [Last Accessed: June 1st 2015]
237 SNP, http://www.snp.org/referendum/the-new-scotland, [Last Accessed: June 1st 2015]
238 SNP, http://www.snp.org/referendum/the-new-scotland, [Last Accessed: June 1st 2015]
‧
North Sea oil distribution and use of such resources comes as the main proponent of the economic arguments from SNP. SNP claims that with sole access to Scotland’s own resources, an independent Scotland will be able to invest the wealth produced from the North Sea oil for future generations.239 Currently, there is still a huge influx of money pouring into oil-producing countries, especially after 2002 and between the years of 2007-2008. As of 2007, the Gulf States alone were earning $5 billion a week, which just demonstrates the vast market and wealth that could be produced by oil.240 Statistics produced from the SNP demonstrate that there is more North Sea oil to be extracted. Currently, 40 billion barrels of oil have been extracted since 1975, however, it is to be expected that another 21-35 billion barrels of oil can still be recovered, with oil prices increasing in the next few years.241 The contention that the North Sea oil would increase the chances for a wealthier Scotland has been confirmed in The Economics of
Nationalism Re-examined by the chief Economic Adviser to the Scottish Office, Gavin McCrone.
McCrone states that “the advent of North Sea oil has completely overturned the traditional argument used against Scottish nationalism.”242
Furthermore, the SNP use other statistics to illustrate that it is not only the North Sea oil which would allow Scotland to flourish as an independent country but also, that the public finances of Scotland are currently healthier than those of the UK as a whole. Over the previous five years, Scotland’s public finances have been stronger than the UK as a whole by a total of 12.6 billion pounds, which is almost 2,400 pounds per head.243 In addition to this, tax receipts per head in Scotland have been estimated to be higher than the UK each and every year since 1980/81 and in 2011/12, it was elucidated that Scottish tax receipts were higher than the rest of the UK by 1,700 pounds, due to the tax receipts being around 10,700 pounds per head.244
239 White Paper, Scotland’s Future: Your Guide to an Independent Scotland, p. xii
240 Ritzer, G. (2011), Globalization: The Essentials, Chichester, West Sussex, U.K.; Malden, Mass.: Wiley-Blackwell, p. 90
241 Kemp, A. (2011), ‘The Great North Sea Oil Saga: All Done or Still Unfinished?” in D, Mackey (ed.), Scotland’s Economic Future, Edinburgh: Reform Scotland
242 McCrone, G. (1975), The Economics of Nationalism Re-Examined, Scottish Economic Planning Department, Scottish Office
243 White Paper, Scotland’s Future: Your Guide to an Independent Scotland, p. 66
244 White Paper, Scotland’s Future: Your Guide to an Independent Scotland, p. 66
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Figure 4: Tax Receipts of the UK
The chart above is produced by the National Statistics publication, Government Expenditure and Revenue Scotland (GERS). GERS is the authoritative publication on Scotland’s public finances. This publication demonstrates the figures for 2011/12 and the SNP utilize this chart to illustrate that tax receipts are equivalent to that of the UK figure, and if the oil and gas receipts are added, tax revenue per head in Scotland will be nearly 20 per cent higher than the UK average.245 The SNP claims that with independence, decisions about the level and allocation of public spending will be conducted by Scottish people for Scotland.
Opposition against independence have argued that GERS published by the Scottish Government is unreliable and undependable since the estimates are based on figures which are two years old and every year, there is a warning about the accuracy of the charts produced. For many years, the figures produced by GERS has presented a conclusion of the net fiscal balance for Scotland but without comparing it to the UK balance thus, Scotland’s budget has mostly been shown to be in a deficit. However, in recent years, from 2008-09, GERS has since corrected this
245 White Paper, Scotland’s Future: Your Guide to an Independent Scotland, p. 67-68
‧
omission and it can be noted that GERS 2004-05 to 2008-09 illustrate Scotland with its share of North Sea oil revenues showing a surplus on its current balance. While this figure is in deficit on its overall fiscal balance, but when compared to the UK balance, it is found to be on a lower level to the UK balance on both the current and net balance.246
If Scotland became independent, SNP also claims that once the Scottish people receive rights to their own resources, the SNP would abolish the ‘bedroom tax,’ which is presently imposed on Scottish citizens by the Westminster Parliament. In addition to this, SNP promised to keep public services in public hands. The Royal Mail was previously privatized by Westminster Parliament;247 therefore, the SNP vows to keep the National Health Service (NHS) within public hands if Scotland were to become independent. Furthermore, the nuclear weapons, named Trident, for the whole of the United Kingdom are based in Scotland and it has been the source of much controversy, especially since most Scottish people would like to see it alleviated from their region.248 SNP argued that if Scotland were to become independent, they would remove Trident for good from Scottish soil.249 These economic arguments propounded by SNP are by far the most important that the public will take notice of considering the general public’s interest is piqued at what will benefit them in terms of wealth if they were to vote for independence.
On the other hand, opponents of independence view that the claims expounded by the SNP were too good to be true by citing the banking crisis in 2007 where two of Scotland’s largest banks, Royal Bank of Scotland (RBS) and Halifax Bank of Scotland (HBOS), had to be bailed out by the UK state.250 The collapse of these two banks produced daunting figures for those wishing to be independent as those against independence, argued that if Scotland had been an independent state, there was absolutely no way that they could have bailed RBS and HBOS
246 Government Expenditure and Revenue in Scotland, (2004-09), Scottish Government, Edinburgh
247 “Row Grows Over Royal Mail Plans,” BBC News, February 24th 2009,
http://news.bbc.co.uk/2/hi/uk_news/politics/7907179.stm [Last Accessed: November 30th 2015]
248 Devlin, K., “Senior Tories Back US Plan for Trident if Scots Vote Yes,” Herald Scotland, April 19th 2014, http://www.heraldscotland.com/news/13156327.Senior_Tories_back_US_plan_for_Trident_if_Scots_vote_Yes/
[Last Accessed: November 30th 2015]
249 White Paper, Scotland’s Future: Your Guide to an Independent Scotland, p. xii
250 “What a Disaster,” The Economist, October 16th 2013, http://www.economist.com/news/books-and-arts/21588345-lessons-collapse-what-disaster [Last Accessed: November 30th 2015]
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
out by itself. Estimates showed that the liabilities of both RBS and HBOS were 20 to 30 times greater than Scotland’s GDP. The UK’s total financial provision, including all loans and asset protection for UK banks, was valued at 751 billion pounds of which 470 billion pounds were liabilities from RBS and HBOS.251 If another banking crisis were to happen again, like the one in 2007-08, opponents of nationalism argue, would an independent Scotland be able to handle it?
Furthermore, figures produced by the SNP in its argumentations are based on the fact that the North Sea oil revenue will be able to increase tax revenue per head; however, unionists claim that the oil is close to running out, which results in the SNP’s argument of its largest income
being unlikely.
Figure 5: North Sea Oil and Gas Production
Figures demonstrate that production fell around 6% on average every year between 1999 and 2010 and has dipped nearly 40% since 2010 (exemplified in first chart). The second chart elucidates that while oil prices are increasing by the barrel, however, the cost of extracting a
251 Scottish Parliament Economy (2009), Tourism and Culture Committee
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
barrel of North Sea oil is nearly five times more expensive than it was in 2002.252 If the oil runs out in the next few years, then the economy of Scotland could really be in trouble if another banking crisis hits as there will not be that insulation provided by the wealth produced through the oil.253
The figures produced for the argumentations by the SNP need to be measured for preciseness and accuracy because, if the figures are not exact enough, it will be difficult to sustain the Scottish economy in the future. However, if the North Sea oil does persist then the SNP would have an unparalleled argument on their hands.