Kate Forbes believes Scotland needs independence as an ‘economic necessity’, but she underestimates its reliance on the UK, writes TERRY MURDEN
When Kate Forbes announced she would be leaving Scottish frontline politics there was a broadly held view that she would be a loss to the SNP and to the country as she stood above the more fanciful policies of her party, and adopted a more realistic appreciation of how business and the economy works.
Sadly, in her latest pro-independence comments, she has stepped into line and erred towards the party’s tendency to blame others for its own shortcomings.
The Deputy First Minister proclaims Scotland is “being held back by Westminster’s cycle of decline and managed stagnation, falling living standards, and chronic underinvestment”. As such she sound less like a DFM and Economy Secretary with the ability to make things happen and more like Reg from Monty Python’s Life of Brian, who asked: ‘What have the Romans ever done for us?’
Ms Forbes may have a case for claiming the Labour government is a long way short of a plan to grow the economy. But to claim chronic underinvestment just days after Scotland benefited from a £10 billion export order for BAE Systems from the Norwegian navy is an ill-timed oversight. There could be more of the same yet to come, with Babcock at Rosyth poised to secure a £1 billion order from Denmark.
And what about the £750m supercomputer for Edinburgh university, announced in the Spending Review?
“All right, I’ll grant you the warship orders and the supercomputer are two things that Westminster has done….”
And the £200m Carbon Capture and Storage (CCS) scheme in Aberdeenshire, also announced in the Spending Review?
“Oh yeah, the CCS scheme… but apart from the warship orders, the supercomputer and the CCS scheme…
Pulpex.
“What?”
Cambridge-based Pulpex is building its first commercial-scale manufacturing facility near Glasgow thanks to a £43.5m investment by Labour’s National Wealth Fund, its first in Scotland which dwarfed the contribution from the Scottish National Investment Bank.
There has also been £1.7 billion for local growth projects and £3 million for Brand Scotland. And don’t forget that Scots benefit by £2,669 more per head in public spending than the UK average and that Holyrood has received the biggest settlement since the parliament was set up.
“All right, but apart from the warship orders, the supercomputer, the CCS scheme, Pulpex, local growth projects, Brand Scotland, higher per capita funding and a record Holyrood settlement what has Westminster ever done for Scotland?”
Well, there are also talks about investment in Grangemouth from Singapore, enabled by the UK Foreign Office.
Devolution has never been enough for the SNP even though it has been handed more powers than a city like Manchester which has not been held back by operating under the Westminster regime. Nor has Cambridge, nor Leeds, nor Newcastle. The best that any of them can boast beyond Westminster support is the office of mayor, while Holyrood is handed billions of pounds which, apparently, is nowhere near enough.
Like her fellow travellers on the yellow brick road, Ms Forbes asserts that Scotland could do much more as an independent nation based on its “world-leading energy resources, skilled and educated workforce and the opportunity to rejoin the EU single market and customs union”.
Few would question Scotland’s capacity for growing the energy sector and the talent that exists in academia, but the DFM overlooks key cogs that keep these wheels turning.
Investors back wind projects in Scotland partly because there is a single market of scale across Britain, as well as tax and currency stability underpinned by a favourable credit rating and pricing structure. Introduce a new tax and pricing regime, lending criteria and other trading barriers between Scotland and England and that dynamic changes.
There are those who call for zonal electricity pricing, believing an independent Scotland would use its resources to provide cheaper energy. However, that argument was lost because most experts stated that lower retail prices would simply make investment in projects unviable.
A current SNP mantra is that Scotland is an “afterthought”, and this certainly looked the case when Chancellor Rachel Reeves made commitments early in the Labour government to the south east and north of England. However, this notion that Labour is favouring England over Scotland is another myth perpetuated by the SNP’s own MSPs.
It is not the case, as they have claimed, that the Lincolnshire oil refinery was “bailed out” by Labour while Grangemouth was allowed to close. Production at the Lindsey plant has ended. In recent years the Chatham Docks in Kent closed, as did the rail works in Swindon. This is not evidence of English favouritism.
Ms Forbes and the SNP talk up an independent Scotland’s re-entry to the EU as if it were a given. There is no such guarantee, especially as Scotland’s standing with credit agencies is likely to take a hit because of its deficit, and this would likely impact entry to the euro, which the EU would probably insist upon.
The agencies would also demand higher taxes and public spending cuts in order to reduce the deficit which it currently gets away with because the markets pay little attention to an economy that has no monetary policy-making powers. All those freebie services Holyrood boasts about would likely evaporate if Scotland had to justify them to the investment community.
For many goods, trade with the EU would necessarily mean continued transportation through England, because volumes would not be sufficient to justify sea-borne transit. The SNP complains about Brexit barriers, yet wants to introduce new barriers between Scotland and England, its biggest market.
So, apart from providing security and scale for major energy projects, a stable tax and credit regime and a single market, what has the UK ever done for Scotland?
And if Scotland did choose to go solo, how would England react? It would have the power and the scale to undercut any benefits the Scots might offer. It would also inherit a number of big companies which would switch their registered offices from the uncertainty of Scotland to the greater stability south of the border.
Labour has been rubbish, dishonest, inconsistent and is wildly unpredictable, but a poor government at Westminster is still not a good enough reason to tear up the constitution and destroy the positives that hold the four nations of the UK together. The SNP mocks the Better Together campaign, but there is no evidence that Scotland would be better off going solo.
Terry Murden held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business
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