Scottish independence: SNP needs to see beyond public sector

There is certainly a positive case to be made about the future, long-term prosperity of an independent Scotland but the First Minister appears to be reluctant, or incapable, of doing so.

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To talk about putting money in people’s pockets just a few weeks after a budget in which his finance secretary announced a range of new tax rises and budget cuts to plug a £1.5billion black whole in Scottish Government finances would seem quixotic to say the least.

Public spending north of the border is already 20% higher than the UK average, according to the Institute of Fiscal Studies.

It doesn’t take a Nobel laureate in economics to see why Scotland’s economy is structurally incapable of recording a budget surplus, and what requires to be done to turn things around.

The engine of the UK economy is centred 400 miles away, leaving Scotland – and much of England, Wales, and Northern Ireland to feed off the scraps – while a disproportionate level of employment here remains reliant on the public sector.

The fiscal levers, which would assist in turning things around, as well as powers over game-changing infrastructure and logistical decision-making, remain domiciled at Westminster.

Yousaf argues that an independent Scotland could become one of the world’s wealthiest countries, similar to other small European nations such as Norway, Denmark, and Ireland.

While there is no good reason why that could not be the case in due course, what he avoids mentioning is the strong and unpleasant medicine needed to get there.

As well as implementing swingeing budget cuts, a newly independent Scotland would require to significantly rebalance the economy – and employment – in favour of a more active and streamlined, wealth-creating private sector that would make the decade of Thatcherism seem like a picnic.

A newly independent Scotland 'would require to significantly rebalance the economy towards the private sector' (Image: free)

There is also the thorny issue of what currency it would use and where interest rates would be set, and we would have to navigate the choppy waters of global economic forces as a small nation for the first time.

Since the late 1960s, Norway has relied on oil as its economic driver, becoming Western Europe's leading petroleum producer. Its economy faced a significant setback in 2020 when oil prices plummeted at the onset of the global pandemic, causing the Norwegian krone to plunge and the country’s GDP to shrink by 6.3% —its biggest fall in half a century.

While its economy rebounded, with an overall growth of 3.9% in 2021 and 3.3% the following year, its recovery was bolstered by a reliance on its $1.3trillion sovereign wealth fund, the world's largest.

Scotland’s oil reserves are largely depleted and, while we can argue about who is to blame, the country would be required to generate a whole new raft of industries to generate wealth.

A more appropriate comparison might be Ireland, recently named by the Global Finance website as the world’s richest economy, based on GDP per head.

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Ireland has positioned itself as one of the world's major corporate tax havens, so the main beneficiaries of its wealth are multinational corporations rather than the average Irish citizen.

In the mid-2010s, prominent US companies including Apple, Google, Microsoft, Meta, and Pfizer relocated their fiscal headquarters to Dublin, to take advantage of its appealing corporate tax rate of 12.5%, which is among the lowest in the developed world.

By 2022, multinationals contributed around 56% of the total value added to the Irish economy, up from 53% in 2021, according to the Central Statistics Office.

While Irish families have undoubtedly experienced improvements, the national household per-capita disposable income slightly lags behind the overall EU average, according to OECD data. Notably, there exists a significant wealth disparity in Ireland, with the top 20% of the population earning nearly five times more than the bottom 20%.

Humza Yousaf 'appears to be oblivious even to the existence of a private sector' (Image: free)

Even if Mr Yousaf was able to convince a majority of Scots that the initial pain of separatism was worth the long-term benefits, there is no indication he would have the first clue about how to get there.

Judging by the composition of his government, and of his party grouping in the Scottish Parliament, he appears to be oblivious even to the existence of a private sector.

Of the 64 nationalist MSPs in the current parliament, only four have what could loosely be described as a business background, and none of those are in the Scottish Government.

Michelle Thomson and Ivan McKee, who regularly writes for The Herald, both ran private consultancies before entering politics, while Jim Fairlie was a farmer and Tom Arthur is described as having been a “company director and freelance piano teacher.”

Ms Thomson appears to have had the most extensive business experience and the party made use of this by appointing her a spokesperson for business innovation and skills for a grand total of six months in 2015.

Mr McKee – an international business consultant who has managed businesses in Scotland, England, Poland, Finland, Croatia, and Bosnia – was ditched as minister for business, trade, tourism, and enterprise by Mr Yousaf when he took office last March.

By far the majority of MSPs appear to have worked in the public sector, as teachers, lecturers, social workers, health workers and in local government. While their skills are no doubt useful, the general impression is of an homogenous, single-minded institution which believes its sole purpose is to spend other people’s money.

It is also telling that, when the First Minister needed to drum-up businesspeople to attend a dinner he turned to Brian Souter, the SNP’s erstwhile benefactor and funder of the poisonous Keep the Clause campaign. It was Scotland's first and, thankfully, its only, experiment in the privatisation of politics.

Camley's take on Yousaf's indy claims (Image: free)

As a political journalist working on one of the tabloids that slavishly supported the campaign to retain Section 28, which banned the promotion of homosexuality in schools, I witnessed at first-hand how easy it was for a man with a big cheque book to subvert democracy.

In the post-Trump, digital age, the possibilities for a figure like Souter to exercise even greater powers should make everyone pause for thought.

The party does need to cultivate a closer relationship with the business community and a more mature attitude to wealth creation if it is to convince middle class, professional voters of the merits of independence.

But Poundshop agitators like Souter, whose views would look beyond the pale at a Bible Belt revivalist meeting, should be avoided like the plague.