I watched Channel 4 news on Tuesday evening, and for the third or fourth time since Nicola Sturgeon made her announcement the previous morning, a reporter made the bald statement that the economic case for independence is now poorer than it was, and that it’s the Unionists who hold the economic cards. This is catagorically untrue, and needs to be nailed. We cannot, as independence supporters, allow this myth to go unchallenged. The truth is that Brexit means the economic case for independence has never been stronger.
There is no status quo this time. The greatest single argument that the Unionists had last time was why risk the uncertainties of independence when you can stick with the security, stability and safety of the known quantity of the UK. That argument has been destroyed by Westminster itself, by Theresa May’s arrogant pursuit of the hardest Brexit imaginable and her willingness to countenance the UK falling out of the EU without any trade deal at all. That means there can be no safety and guarantee of economic success in the United Kingdom. There is no stability of the pound sterling. There is no security of job prospects in a Tory Brexit Britain. This is not an appealing economic argument to put in favour of remaining a part of the UK.
The claimed benefits of Brexit were described as “a lie” and we were assured that a large number of jobs would be lost if Britain were to leave the EU. We were told that experts believed that Brexit would make the UK a less safe and certain place, a poorer place. In an article in the Financial Times it was stated, “There is no doubt in my mind that there will be a large economic cost of Brexit. It is agreed near unanimously by economists and businesses large and small.” Those statements were made by no less a person than Ruth Davidson herself, the same Ruth who said that we should trust in the experts “every day of the week and twice on a Sunday”. That’s the very same Ruth who’s now telling us we need to make the best of Brexit and who is desperately trying to avoid the subject of the economic damage that it’s going to do to Scotland. Although to be fair, she doesn’t have to avoid it too strenuously as the Unionist media aren’t really pursuing her vigorously on the topic. But the independence movement will.
So let’s look at what some experts say. Some experts warn that Brexit puts some 80,000 Scottish jobs at risk. In other assements, according to economic forecasts by those experts in whom we should trust every day of the week and twice on a Sunday, real earnings in the UK could fall by 10% by the year 2030 as a result of Brexit. That last is a forecast made by Simon Wren-Lewis, a professor of economic policy at Oxford University, a real economist and not a Unionist blogger with a penchant for graphs. In an article in the New Statesman explaining why Brexit makes Scottish independence more economically attractive than the alternative of remaining a part of the UK, Professor Wren-Lewis argues that both an independent Scotland and a post-Brexit Britain are facing a difficult economic future. But, he argues, the prospects for an independent Scotland are far brighter.
The crucial difference is that an independent Scotland with full access to the EU single market will find it considerably easier to get out of economic difficulties than a Brexit Britain which is economically isolated from the rest of the world. That’s the key. An independent Scotland will prioritise the development of the Scottish economy, it will put Scottish jobs first and foremost, and it will have the tools to grow the Scottish economy successfully and profitably and access to the markets that can make that happen. In a Brexit Britain we will be an afterthought which exists purely to be stripped of assets and resources, with public services underfunded and under provided, and with little or restricted access to markets other than the contracting and stressed so-called UK single market.
Given the severe financial stresses that a Brexit Britain is going to face, the Barnett Formula is unlikely to survive more than a few months beyond a No vote in the forthcoming Scottish referendum. As a part of the UK we are facing an uncertain and difficult financial future, and that’s likely to be for the long term. As an independent country, it’s true that we face a difficult period of readjustment in the short term, but it will be far easier for Scotland to escape those difficulties.
It needs to be repeatedly stated that Scotland’s economy does not depend on the price of oil. Despite the collapse in oil prices over the past few years, the Scottish economy was scarcely affected. It’s interesting to note that in the same period during which UK revenues from oil were devastated, Norway continued to draw healthy, albeit reduced, profits from its oil fields. The difference is due to the different tax regimes in each country. An independent Scotland needn’t give the same massive tax breaks to oil companies as the UK does, and therefore we’d benefit more from our oil and gas resources, even though the price of oil is lower than it was during the last independence referendum.
If Scotland remains a part of the European single market by becoming an independent country, we’d be in a position to attract jobs and inward investment that currently go to the rest of the UK. Independence could bring about a jobs bonanza for Scotland. The alternative we face are the potential 80,000 jobs lost due to Brexit. That doesn’t sound to me like the Unionists have all the economic arguments in their favour, quite the reverse.
Then there’s the argument constantly cited by Unionists that Scotland does far more trade with the rest of the UK than it does with the EU, an argument which conveniently overlooks all the trade Scotland does with the rest of the world which is enabled by trade deals we have as a part of the EU. I’ll give Professor Wren-Lewis’s response to that in full.
… Scotland currently does a lot more trade with rUK than with the EU. If Scotland became part of the single market, and that resulted in trade barriers being created between Scotland and rUK, the immediate impact on Scotland’s trade would be negative. That would be another short-term cost. But in the longer term, Scotland would be better off with this arrangement. To see why, imagine two parts of this island, one which has easy access to the huge market which is the EU and one which did not. It is obvious which part would be expected to grow more rapidly.
The choice facing Scotland in this referendum is between two economic uncertainties and difficulties. There’s the short term uncertainty and difficulty of independence which brings with it the prospect of growth, prosperity and stability in the medium to long term. Or there’s the uncertainty and difficulty of Brexit, in which we face penury and impoverishment in the short term, and in the medium term, and in the long term, and we will be utterly at the mercy of a vindictive Tory government in Westminster which will suck us dry and cast away the dried up husks of broken Scottish communities. I know which I prefer. I know where the economic arguments lie, and they don’t lie with the Union, they are with independence every day of the week and twice on a Sunday.
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