The Independent Parliamentary Standards Authority, set up to, among other things, make the expenses system of MPs more transparent, costs £7million per year to run compared to the old fees office which cost a mere £2million a year. One of the things it demands of MPs, though, is timeous delivery of details of their expenses claims. A friend of mine submitted a freedom of information request asking for details of the expenses scheme for IPSA staff, the actual expenses paid to IPSA staff, and a reason why senior staff business costs have not been published on the IPSA website as promised.
You would imagine that IPSA would want to reply promptly, wouldn't you? The answer was due on the 15th of October - my friend is still waiting. Getting a little irate, he's lodged a complaint with the ICO (good luck with that, I've been waiting two years for a judgement from them). Neither organisation, apparently, practices what it preaches, and neither lives up to the standards they expect of others.
For the avoidance of doubt, my friend who made the request and the complaint is not a politician, is not employed by a politician, isn't employed by any political party and, in fact, is not employed in politics at all, he's just a chap who gets cheesed off at waste in the public sector. More power to him and others like him, I say.
Saturday, 30 October 2010
Sunday, 24 October 2010
It's piqued my curiosity
I was having a wee look at the opinion poll done by Yougov for the Scotsman and noticed something that made me look again. Remember the constituency polling figures were SNP 34%, Lab 40% Con 14%, LD 8%, but the unweighted figures were SNP 506, Lab 403, Con 138, LD 78 (no unweighted figures given for the Greens) - that would give the SNP 45% of the distribution among the four largest parties, Labour just under 36%, Conservatives just over 12% and the LibDems 7%.
I appreciate why the weighting is done and how it should increase the accuracy of the poll but I question whether Yougov might have gone a little far. The change made by the weighting saw the SNP have 113 votes removed while the three other parties all saw increases (the LibDem vote wasn't increased by enough to make a difference to the percentage they got but it was increased). If memory serves, Yougov has been a little off in its Scottish weighting before. It's just a wee question I've got hanging about there, but maybe Scotland's Party is actually ahead just now. Of course, even if the poll with its strange weighting is accurate, we're still ahead of where we were in November of 2006 when the SNP was at 32% in the constituency vote and 28% in the regional vote compared to the current 34% and 31%.
Och, what an interesting wee time we have ahead of us!
I appreciate why the weighting is done and how it should increase the accuracy of the poll but I question whether Yougov might have gone a little far. The change made by the weighting saw the SNP have 113 votes removed while the three other parties all saw increases (the LibDem vote wasn't increased by enough to make a difference to the percentage they got but it was increased). If memory serves, Yougov has been a little off in its Scottish weighting before. It's just a wee question I've got hanging about there, but maybe Scotland's Party is actually ahead just now. Of course, even if the poll with its strange weighting is accurate, we're still ahead of where we were in November of 2006 when the SNP was at 32% in the constituency vote and 28% in the regional vote compared to the current 34% and 31%.
Och, what an interesting wee time we have ahead of us!
Thursday, 14 October 2010
The Madness of Money
Politics became lost at the end of 1976. That’s when the Labour Government of the day finally realised that it had lost control of public spending, messed up the economy and sent the UK into chaos (something they’d been arguing about for a year by that time); it’s when Denis Healey, as Chancellor of the Exchequer, went to the IMF to ask for a loan to keep the state afloat until the revenues from the North Sea started rolling in. It’s also when the UK found out that the IMF doesn’t give loans without collateral and that the mortgage terms were not exactly easy. Enter Dr Johannes Witteveen, born in Zeist, former Finance Minister of the Netherlands and economics professor in Rotterdam turned Managing Director of the IMF, who made himself comfy at the Cabinet table, got a wee cup of tea and a couple of chocolate digestives and set about curing Labour’s mess.
The IMF administered a medicine that tasted bitter – sour enough to poison the well from which the Labour Government and the trade unions had been drinking, vicious enough to last into the Winter of Discontent, the fall of the Labour Government and the rise of Margaret Thatcher. Healey had promised the Labour party conference of 76 that there would be no new spending cuts just as his Prime Minister had been telling the BBC that only Labour could dig the UK out of the financial mess that Labour had got it into and Labour conference was voting to nationalise the major banks and a big skelp of the insurance industry. It seems that some things, indeed, never change. The measures brought by Dr Witteveen changed the course of the UK monetary policy abruptly and, it might be said, viciously but they did more – they also changed the nature of political debate in the UK; no longer were the big debates about different ideologies and different policies, the debates became about the money needed to fund policies rather than about the policies themselves – a phenomenon nicely described a while back by Ian Bell of the Herald as “budgets driving policies instead of policies driving budgets”.
The refrain of ‘how much does it cost?’ often drowns out any intelligent policy debate which may be going on and it’s been constant for all of my active political life, sometimes focussed, acute and at the forefront, often obtuse, monotonous and draining – the muzak of politics in the UK, and just as enervating.
It’s why the debate on Scottish independence has descended into a fiscal rammy. It’s why the debate over nuclear weapons often finds itself in the grey cul-de-sac of arguments over what the money could be better spent on rather than why we have the things in the first place. It’s why George Osborne can cut Child Benefit and not get roasted. It’s why we find even the sensible and dedicated politicians in the SNP getting caught up in it, promising that any Barnett consequentials resulting from the UK’s spending review will be spent on health but not why. It’s why the future of Higher Education has been reduced, in political discourse, to arguments about funding. It’s why the to and fro over private prisons is about money more than effectiveness. It’s why so much has been privatised, tendered out, outsourced, and driven away from the public realm. The debates are no longer about what should be done, they’re all about where to spend money.
Now we have the monster of all fiscal panics for politicians frightened of policy debates to hide behind, cowering from the responsibility of engaging in an exchange of ideas, shirking the duty of examining the options presented and, instead, arguing about which pot to put the pennies in – and which pot to empty. That robs us of the political discourse that should inform our decisions and it squeezes the civic discourse which should guide us forward; it’s the equivalent of putting your hands over your eyes and thinking that if you don’t look then the scary thing won’t be there. The truth is, though, that the curtains are still moving and when our eyes are finally opened we might be staring at a landscape that we don’t recognise, didn’t choose and don’t want – and there’s always the danger, remote as it may be, that while our attention is diverted someone with their hands on the controls of government pulls us away and away and away from where we would rather go, celebrating each little victory with the joy of la petite mort and leaving us moving ever so slowly towards une grande mort.
It was Curran who said; "It is the common fate of the indolent to see their rights become a prey to the active. The condition upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime and the punishment of his guilt", so let’s take his advice and remain vigilant, let’s start taking back some of that discourse, let’s reclaim our right to politics and political debate never free from economic and fiscal considerations but not dominated by them either. Let’s have a look first at a couple of areas which have been blanketed and smothered by the fiscal argument in recent times and see if there is a political debate beneath them.
Why is it that university students and graduates, uniquely (I think) among users of our public services were required, and the argument appears to be getting made now that they should in future be required, to spend years repaying the cost of the public service they receive – over and above the taxation on their incomes? We don’t face a bill for calling the police, we don’t get slapped with a cost when using social services, we don’t face tuition fees in schools and we don’t have to pay to see a doctor, why are university graduates singled out? The usual argument floated is that they gain lifelong benefits from the education and they earn more over their working lives (the government estimate of additional earnings has shrunk somewhat and now stands at around £100,000 – you’d probably get a better return over your working life from putting your tuition fee in the bank). The usual riposte to that claim is that society benefits as well and income tax from those additional earnings goes to help fund state operations. It’s a ping-pong, so let’s try a different approach.
If you gain lifelong benefits and additional earnings from a university education, don’t you gain the same from life-saving medical treatment? In this instance life itself is a benefit and any money earned is, of course, more than would have been earned without the life-saving treatment – why is the patient not presented with a bill? What about the lifelong benefits and additional earnings of going to school – why are they not charged separately? What about the benefits and additional earnings that come from maintaining good health by having clean streets and a decent rubbish collection service? Of course, there was an attempt made at one point to introduce an individualised charge which would recognise the benefits of life under Scotland’s local authority system, it didn’t go down too well as I remember.
More pointedly, perhaps, why is there no talk of a graduate tax for college students who also get lifelong benefits and additional earnings, or an apprentice tax for apprentices, or one for those trained on the job at public expense? Why are university graduates singled out? They shouldn’t be.
Universities are autonomous bodies, not strictly part of the public sector but largely funded through the state. If we agree that government should fund universities to teach our people then we are agreeing that universities should be regarded as part of the public sector and there is no reason why one of our people being taught in one area of the public sector should have different terms and conditions to another. If we believe that all of us should be treated equally by the state then the arguments for tuition fees, graduate taxes, graduate payments and the like all fall away. Unless, of course, we decide that others who receive public services should pay for them individually.
There is the growing “woe is me” with universities arguing that they can’t keep up with the funding that English universities get through central funding and fees and that this will worsen when the expected changes are made south of the border in response to the Browne report. Anton Muscatelli has even suggested that Glasgow University might go pop on his watch because it runs out of money unless it can charge large tuition fees (I wonder how it managed to survive all of the 559 years it has been around) and Andrew Cubie of the infamous Graduate Endowment has suggested a Graduate Tax is the only way to match England’s march to wealth. You would think, if you listen to well-paid professional academics, that Scotland’s universities have been ill-served by everyone who has come near – the truth is slightly different.
Vince Cable and David Willets cut £449 million of funding from the English universities in June – to add to the cuts that Mandelson had already made, and that’s not all. In 1998/99, the year that tuition fees were introduced in England, the teaching grant for England’s universities was £4.68 billion. For this academic year teaching grant and government-funded fees amount to £5.1 billion - that’s a real-terms cut of £1.1 billion – 17% of what the English teaching grant would have been if it had just kept pace with inflation. Universities UK in evidence to the Browne Report estimated that fees will bring in £1.5 billion this year to universities and colleges. Tuition fees haven’t added to the income of English universities, they’ve reduced government funding and instead dipped into the pockets of the students.
In Scotland the teaching grant for 1998/99 was £435 million and research and strategic change grants took the total up to £574 million. Grants for infrastructure were embedded into these grants at that time and they have continued to be done that way. This year’s General Fund allocation included £666 million for teaching and £241 million for research as part of the overall £988 million grant – a real terms increase of £243 million, representing a 42% real terms increase in government funding. We should also remember that some Higher Education is delivered in Further Education institutions which have a separate funding stream so the actual spend on Higher Education in Scotland is higher than this.
There are 131 Higher Education Institutions in England and 19 in Scotland (20 if you count the Open University); English universities receive just under £39 million each on average from central government while Scottish universities receive £52 million each on average. Scottish universities get better central government funding than English universities and even adding tuition fees on to the income of the English universities they still lag behind their Scottish counterparts by a couple of million pounds each. I suspect that the poverty pleas from our universities do not quite match the reality and they give no indication of the contribution to our society made by our universities. Universities who still worry do, of course, always have the option of following the example set by the University of Buckingham. Founded about 30 years ago, it is completely independent of government, takes no government money and is not directed in any way by government. If you want to go there you pay the fees – approaching £18,000 for the degree done over two years, four terms a year. It isn’t clear whether any Scottish university might be keen to work this way.
What is clear, though, is that Scotland doesn’t have a university funding gap and doesn’t need tuition fees, graduate taxes or any of the rest of the vaguely daft ideas that are floating around. What we do need is a debate about the value added by universities and by study – the economic value to the individual is bandied around endlessly (and the figures change endlessly), we hear no shortage of that because it suits the purposes of those who want to change the way in which their studies are funded – but we do not hear much about the value added to society by the doctors and engineers and teachers and physicists and geologists who are trained, little about whether an educated society is a happier society, and almost nothing about the benefits to the host city or town of having a university.
There is no proper debate, either about whether we should have more than half of our young people going to university, about where that target came from and what its purpose is, it was a target that seemed to appear without much discussion and with little explanation of its purpose or intent. Reference was made to the Scandinavian countries who have higher HE participation rates than us but no case was made about why it was desirable for us to aspire to higher rates. We have seen a proliferation of degree courses, some of which have been roundly mocked and some of which you could argue should not be degree courses; and we have seen increases in the number of universities. I find myself wondering whether the post 92 universities actually offer more than they did in their previous incarnations; they hand out degrees now but are those degrees more valuable than the qualifications they handed out before? Are their students better educated or better trained than they were before? These debates simply aren’t being had – no long-term view about how we improve Higher Education can be knocked back and forth without the Scrooges muttering dire warnings, lisping portents of doom and ignoring Marley’s warning.
We can’t accept that as being good enough, we can’t simply allow policy to be driven by budgets, we must get back to discussing what should be done, what needs to be done, and how we need things to change for the better then we can discuss how we find the resources to do those things. Not only is the cart before the horse just now, the horse is still behind a bolted stable door.
While we’re talking about universities and colleges, let’s take a minute to think about the students. They end up paying dearly for their education with a student loan debt that is, to all intents and purposes, a small mortgage secured on their future. The arguments rehearsed earlier about tuition fees and graduate contributions apply here as much as they do there – why is this group of people being singled out to have to pay for the public service they receive? There are additional points to consider as well, though, points which perhaps indicate how much of a disservice student loans do our country.
Their repayments limit the disposable income that graduates have, thereby creating a drag on the economy – if that disposable income was spent by those young professionals (by and large graduates fit that description) while they have a bit of space in their lives it would help to drive our economy forward. Instead it is simply recycled as an additional tax.
The burden of the repayments also means that graduates are less able to move on with their lives, it’s harder to get into the housing market, it’s more of a decision to have children, and so on – slowing down many of the drivers of national growth that we need.
Debt has been shown to be a disincentive to study for those from a non-traditional university background and student loans represent the biggest debt that a student will accumulate in Scotland during their study – student loans reduce social mobility.
Finally, though, the one dichotomy which might be found to be the hardest to reconcile is the strangeness of the contrast with those who are unemployed. When one of our citizens is unemployed and seeking work we, quite rightly, support them with benefits to a degree. It simply isn’t the life of ease that some suggest over and over again but it is a contribution from the state to the wellbeing of that person and their family which is, usually, a grant of money. Why is there not a readiness to offer that same contribution to students? Why is it that we have a state prepared to give money in a grant form to those who are workless but that same state refuses to offer similar assistance to other, similar people who happen to be studying in order to improve themselves and, in the process, are making themselves more work-ready? If we can fund a jobseeker for a while why should we not fund a student for a while? We don’t ask the jobseeker to repay their benefits when they get into work, relying instead on the taxes they pay to fill that gap – why should the same principles not apply to students? Why should these two groups of people be differentiated in the eyes of the state?
In the maelstrom of speculation about cuts that we’re experiencing just now there are stories and rumours aplenty but little hard evidence of anything at all. In the midst of it, though, we’ve continued to avert our eyes from that most important of things – political and policy debate, discussion about how we move our country forward. We’re captured by those who want a fiscal fight and imprisoned by those who ask the price rather than the value. We should retake our politics, retake our public discourse, reclaim our right to test our opinions against those of others. We do ourselves down by always counting pennies and never dreaming dreams, we’ll do better when we dare to dream again and dare to test ourselves against our fellow human beings. Scotland will do better when we dare to reach out and grasp the thistle of ideas instead of always checking for the pocketbook.
As MacDiarmid would have it:
The IMF administered a medicine that tasted bitter – sour enough to poison the well from which the Labour Government and the trade unions had been drinking, vicious enough to last into the Winter of Discontent, the fall of the Labour Government and the rise of Margaret Thatcher. Healey had promised the Labour party conference of 76 that there would be no new spending cuts just as his Prime Minister had been telling the BBC that only Labour could dig the UK out of the financial mess that Labour had got it into and Labour conference was voting to nationalise the major banks and a big skelp of the insurance industry. It seems that some things, indeed, never change. The measures brought by Dr Witteveen changed the course of the UK monetary policy abruptly and, it might be said, viciously but they did more – they also changed the nature of political debate in the UK; no longer were the big debates about different ideologies and different policies, the debates became about the money needed to fund policies rather than about the policies themselves – a phenomenon nicely described a while back by Ian Bell of the Herald as “budgets driving policies instead of policies driving budgets”.
The refrain of ‘how much does it cost?’ often drowns out any intelligent policy debate which may be going on and it’s been constant for all of my active political life, sometimes focussed, acute and at the forefront, often obtuse, monotonous and draining – the muzak of politics in the UK, and just as enervating.
It’s why the debate on Scottish independence has descended into a fiscal rammy. It’s why the debate over nuclear weapons often finds itself in the grey cul-de-sac of arguments over what the money could be better spent on rather than why we have the things in the first place. It’s why George Osborne can cut Child Benefit and not get roasted. It’s why we find even the sensible and dedicated politicians in the SNP getting caught up in it, promising that any Barnett consequentials resulting from the UK’s spending review will be spent on health but not why. It’s why the future of Higher Education has been reduced, in political discourse, to arguments about funding. It’s why the to and fro over private prisons is about money more than effectiveness. It’s why so much has been privatised, tendered out, outsourced, and driven away from the public realm. The debates are no longer about what should be done, they’re all about where to spend money.
Now we have the monster of all fiscal panics for politicians frightened of policy debates to hide behind, cowering from the responsibility of engaging in an exchange of ideas, shirking the duty of examining the options presented and, instead, arguing about which pot to put the pennies in – and which pot to empty. That robs us of the political discourse that should inform our decisions and it squeezes the civic discourse which should guide us forward; it’s the equivalent of putting your hands over your eyes and thinking that if you don’t look then the scary thing won’t be there. The truth is, though, that the curtains are still moving and when our eyes are finally opened we might be staring at a landscape that we don’t recognise, didn’t choose and don’t want – and there’s always the danger, remote as it may be, that while our attention is diverted someone with their hands on the controls of government pulls us away and away and away from where we would rather go, celebrating each little victory with the joy of la petite mort and leaving us moving ever so slowly towards une grande mort.
It was Curran who said; "It is the common fate of the indolent to see their rights become a prey to the active. The condition upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime and the punishment of his guilt", so let’s take his advice and remain vigilant, let’s start taking back some of that discourse, let’s reclaim our right to politics and political debate never free from economic and fiscal considerations but not dominated by them either. Let’s have a look first at a couple of areas which have been blanketed and smothered by the fiscal argument in recent times and see if there is a political debate beneath them.
Why is it that university students and graduates, uniquely (I think) among users of our public services were required, and the argument appears to be getting made now that they should in future be required, to spend years repaying the cost of the public service they receive – over and above the taxation on their incomes? We don’t face a bill for calling the police, we don’t get slapped with a cost when using social services, we don’t face tuition fees in schools and we don’t have to pay to see a doctor, why are university graduates singled out? The usual argument floated is that they gain lifelong benefits from the education and they earn more over their working lives (the government estimate of additional earnings has shrunk somewhat and now stands at around £100,000 – you’d probably get a better return over your working life from putting your tuition fee in the bank). The usual riposte to that claim is that society benefits as well and income tax from those additional earnings goes to help fund state operations. It’s a ping-pong, so let’s try a different approach.
If you gain lifelong benefits and additional earnings from a university education, don’t you gain the same from life-saving medical treatment? In this instance life itself is a benefit and any money earned is, of course, more than would have been earned without the life-saving treatment – why is the patient not presented with a bill? What about the lifelong benefits and additional earnings of going to school – why are they not charged separately? What about the benefits and additional earnings that come from maintaining good health by having clean streets and a decent rubbish collection service? Of course, there was an attempt made at one point to introduce an individualised charge which would recognise the benefits of life under Scotland’s local authority system, it didn’t go down too well as I remember.
More pointedly, perhaps, why is there no talk of a graduate tax for college students who also get lifelong benefits and additional earnings, or an apprentice tax for apprentices, or one for those trained on the job at public expense? Why are university graduates singled out? They shouldn’t be.
Universities are autonomous bodies, not strictly part of the public sector but largely funded through the state. If we agree that government should fund universities to teach our people then we are agreeing that universities should be regarded as part of the public sector and there is no reason why one of our people being taught in one area of the public sector should have different terms and conditions to another. If we believe that all of us should be treated equally by the state then the arguments for tuition fees, graduate taxes, graduate payments and the like all fall away. Unless, of course, we decide that others who receive public services should pay for them individually.
There is the growing “woe is me” with universities arguing that they can’t keep up with the funding that English universities get through central funding and fees and that this will worsen when the expected changes are made south of the border in response to the Browne report. Anton Muscatelli has even suggested that Glasgow University might go pop on his watch because it runs out of money unless it can charge large tuition fees (I wonder how it managed to survive all of the 559 years it has been around) and Andrew Cubie of the infamous Graduate Endowment has suggested a Graduate Tax is the only way to match England’s march to wealth. You would think, if you listen to well-paid professional academics, that Scotland’s universities have been ill-served by everyone who has come near – the truth is slightly different.
Vince Cable and David Willets cut £449 million of funding from the English universities in June – to add to the cuts that Mandelson had already made, and that’s not all. In 1998/99, the year that tuition fees were introduced in England, the teaching grant for England’s universities was £4.68 billion. For this academic year teaching grant and government-funded fees amount to £5.1 billion - that’s a real-terms cut of £1.1 billion – 17% of what the English teaching grant would have been if it had just kept pace with inflation. Universities UK in evidence to the Browne Report estimated that fees will bring in £1.5 billion this year to universities and colleges. Tuition fees haven’t added to the income of English universities, they’ve reduced government funding and instead dipped into the pockets of the students.
In Scotland the teaching grant for 1998/99 was £435 million and research and strategic change grants took the total up to £574 million. Grants for infrastructure were embedded into these grants at that time and they have continued to be done that way. This year’s General Fund allocation included £666 million for teaching and £241 million for research as part of the overall £988 million grant – a real terms increase of £243 million, representing a 42% real terms increase in government funding. We should also remember that some Higher Education is delivered in Further Education institutions which have a separate funding stream so the actual spend on Higher Education in Scotland is higher than this.
There are 131 Higher Education Institutions in England and 19 in Scotland (20 if you count the Open University); English universities receive just under £39 million each on average from central government while Scottish universities receive £52 million each on average. Scottish universities get better central government funding than English universities and even adding tuition fees on to the income of the English universities they still lag behind their Scottish counterparts by a couple of million pounds each. I suspect that the poverty pleas from our universities do not quite match the reality and they give no indication of the contribution to our society made by our universities. Universities who still worry do, of course, always have the option of following the example set by the University of Buckingham. Founded about 30 years ago, it is completely independent of government, takes no government money and is not directed in any way by government. If you want to go there you pay the fees – approaching £18,000 for the degree done over two years, four terms a year. It isn’t clear whether any Scottish university might be keen to work this way.
What is clear, though, is that Scotland doesn’t have a university funding gap and doesn’t need tuition fees, graduate taxes or any of the rest of the vaguely daft ideas that are floating around. What we do need is a debate about the value added by universities and by study – the economic value to the individual is bandied around endlessly (and the figures change endlessly), we hear no shortage of that because it suits the purposes of those who want to change the way in which their studies are funded – but we do not hear much about the value added to society by the doctors and engineers and teachers and physicists and geologists who are trained, little about whether an educated society is a happier society, and almost nothing about the benefits to the host city or town of having a university.
There is no proper debate, either about whether we should have more than half of our young people going to university, about where that target came from and what its purpose is, it was a target that seemed to appear without much discussion and with little explanation of its purpose or intent. Reference was made to the Scandinavian countries who have higher HE participation rates than us but no case was made about why it was desirable for us to aspire to higher rates. We have seen a proliferation of degree courses, some of which have been roundly mocked and some of which you could argue should not be degree courses; and we have seen increases in the number of universities. I find myself wondering whether the post 92 universities actually offer more than they did in their previous incarnations; they hand out degrees now but are those degrees more valuable than the qualifications they handed out before? Are their students better educated or better trained than they were before? These debates simply aren’t being had – no long-term view about how we improve Higher Education can be knocked back and forth without the Scrooges muttering dire warnings, lisping portents of doom and ignoring Marley’s warning.
We can’t accept that as being good enough, we can’t simply allow policy to be driven by budgets, we must get back to discussing what should be done, what needs to be done, and how we need things to change for the better then we can discuss how we find the resources to do those things. Not only is the cart before the horse just now, the horse is still behind a bolted stable door.
While we’re talking about universities and colleges, let’s take a minute to think about the students. They end up paying dearly for their education with a student loan debt that is, to all intents and purposes, a small mortgage secured on their future. The arguments rehearsed earlier about tuition fees and graduate contributions apply here as much as they do there – why is this group of people being singled out to have to pay for the public service they receive? There are additional points to consider as well, though, points which perhaps indicate how much of a disservice student loans do our country.
Their repayments limit the disposable income that graduates have, thereby creating a drag on the economy – if that disposable income was spent by those young professionals (by and large graduates fit that description) while they have a bit of space in their lives it would help to drive our economy forward. Instead it is simply recycled as an additional tax.
The burden of the repayments also means that graduates are less able to move on with their lives, it’s harder to get into the housing market, it’s more of a decision to have children, and so on – slowing down many of the drivers of national growth that we need.
Debt has been shown to be a disincentive to study for those from a non-traditional university background and student loans represent the biggest debt that a student will accumulate in Scotland during their study – student loans reduce social mobility.
Finally, though, the one dichotomy which might be found to be the hardest to reconcile is the strangeness of the contrast with those who are unemployed. When one of our citizens is unemployed and seeking work we, quite rightly, support them with benefits to a degree. It simply isn’t the life of ease that some suggest over and over again but it is a contribution from the state to the wellbeing of that person and their family which is, usually, a grant of money. Why is there not a readiness to offer that same contribution to students? Why is it that we have a state prepared to give money in a grant form to those who are workless but that same state refuses to offer similar assistance to other, similar people who happen to be studying in order to improve themselves and, in the process, are making themselves more work-ready? If we can fund a jobseeker for a while why should we not fund a student for a while? We don’t ask the jobseeker to repay their benefits when they get into work, relying instead on the taxes they pay to fill that gap – why should the same principles not apply to students? Why should these two groups of people be differentiated in the eyes of the state?
In the maelstrom of speculation about cuts that we’re experiencing just now there are stories and rumours aplenty but little hard evidence of anything at all. In the midst of it, though, we’ve continued to avert our eyes from that most important of things – political and policy debate, discussion about how we move our country forward. We’re captured by those who want a fiscal fight and imprisoned by those who ask the price rather than the value. We should retake our politics, retake our public discourse, reclaim our right to test our opinions against those of others. We do ourselves down by always counting pennies and never dreaming dreams, we’ll do better when we dare to dream again and dare to test ourselves against our fellow human beings. Scotland will do better when we dare to reach out and grasp the thistle of ideas instead of always checking for the pocketbook.
As MacDiarmid would have it:
O Scotland is
THE barren fig
Up, carles, up,
And round it jig!
A miracle’s
Oor only chance.
Up. Carles, up
And let us dance!
Monday, 4 October 2010
An economic future
So, the GERS ping-pong and similar spats are fiscal arguments rather than economic debates, and GERS, in particular, is a sterile fiscal argument that ignores much of how nations operate, ignores, indeed, how the UK operates. If you want a different look at deficits and what they mean I can think of no better recommendation than watching my old friend from school, Professor Mark Blyth – he’s an economist but he’s not bad really. So what would constitute a fair economic future for Scotland? How would we measure economic optimism and pessimism, how do we judge the actual economic debate? How do we lay down the parameters of economic viability for an independent Scotland?
Well, we’re talking not about whether we’d be fabulously wealthy or miserably poor, not about the current performance or the recent performance, nor even about whether we have the right or the wrong politicians. An economy ready to face the world as a tool of an independent country must have a wide base, a good variety of inputs and outputs; it must range across the whole country – it is likely to have different strengths in different parts of the country, and different aspects will be at different strengths in different parts of the country; it should have flexibility – the ability to change as needed; and there should be strength in depth in the major fields of the economy. To some extent, the space to grow in each of these categories can replace the need to have the capacity but throughout all of them there must be an element of resilience, without which the economy would be too fragile to be useful. The rate of business creation and attrition must play some part in the decisions on growth and resilience, and there will be other measures which can be added in as we come to them.
There are other ways of measuring innate economic strength, one of which, Natural Capital Accounting, was used by Slesser, King and Crane in the mid 1990s on a study of the possible future economy of an independent Scotland where the conclusion was that independence would be good for Scotland’s economy and would help the sustainability of Scotland in the longer term. Malcolm Slesser was an SNP member and stood for the party in parliamentary elections and he was also a respected academic. That isn’t the only alternative way of measuring an economy there are others, but let’s stick with the few measures mentioned earlier. The debate about measuring the economy will, no doubt, carry on for some time yet and I’ll content myself in the meantime with fashioning my own argument which will, no doubt, evolve over time.
The first point of inquiry, then, is does the Scottish economy engage its population? Labour market statistics in the process of being published (covering May to July 2010) as I write this show an economic activity rate of 77.5% for those of working age (slightly higher in men, slightly lower in women). The 22.5% inactive will include students, homemakers (a word I detest but can think of no other at present), those in ill-health and those who act as a carer for a relative or otherwise unable to work, but it represents 764,000 who are economically inactive. There are about 200,000 Scottish domiciled students in our universities and about 80,000 full time students in our colleges (roughly one tenth of Scotland’s working age population is enrolled in our colleges in one way or another) and there’s about 77,000 pupils still at school after reaching 16. I can’t, at the moment, find figures for the number of carers, people incapacitated through ill-health, or homemakers so can’t quantify them so they stay in the figures for now, leaving about 400,000 working-age Scots economically inactive although only 239,000 are declared as unemployed.
That seems a bit of flab in the economy and cause for a little concern. It’s not a new phenomenon, either, data going back to 2002 show that 74% was the norm for a while and a range between there and 77% held sway until the end of 2006. Economic activity rates went over 78% for a while but fell back and are actually recovering now and even excluding students and stay-on pupils, we still have around 12% of our working-age population economically inactive. That is always going to be an unused resource, if not an actual drain on our economy, and should be addressed, and that’s before you add in the citizens of this nation who are over 65. It’s interesting that it has been almost static for so long – the difference between the 74% and the current 77.5% representing around 119,000 people – quite a chunk but only just over a fifth of what it was and a quarter of the gap that still exists. It’s interesting, also, in that it suggests that the recession has not had a massively deleterious effect on our economic activity; that the Scottish economy has actually held up – in these terms – relatively strongly. There is the question of whether the economic activity is high value, and whether the overall value of economic activity in Scotland has been affected but, in terms of whether people are actually engaged in the economy, it is quite a good news story.
Additionally, it suggests that there is a workforce available for growth in the economy (disregarding, for the moment, whether that workforce has the skills that the growing sectors of the economy will need or whether it is distributed well in the geographical areas in which growth is likely to happen) and that employment growth is not just possible but desirable.
The next question would seem to be where those people are employed, both in sector terms and geographically – how wide a base does our economy have?
Excluding central and local government, there are 291,380 enterprises in Scotland (up by 12,000 since 2007 and up by 55,000 since 2000 - 2009 figures, 2010 figures are due soon) of which two thirds are sole traders and nearly 92,000 are small businesses employing fewer than 50 people each. There are 2,315 businesses in Scotland which employ more than 250 people each and 3,640 which employ between 50 and 249 people each. That’s a good spread and suggests a degree of resilience with the spread of employment allowing a few bumps and bruises to be managed. I’m impressed with the number of Scots who have their own businesses, too – giving a lie, I think, to the oft-repeated comment that we’ve lost our entrepreneurial spirit. 193,550 sole traders and 91,875 small businesses suggest a couple of hundred thousand self-employed people in Scotland - actual figures might be skewed by individuals owning more than one business, for example, or by partnership owning. These are all, however, businesses which reported turnover so no shelf companies are in those numbers.
The sector spread is quite wide based, no over-reliance on any one sector, the smallest sector in terms of numbers being “financial intermediation” with about 3,250 companies, followed by “mining and quarrying, utilities” with around 3,350.
Likewise, the numbers employed in these enterprises are well spread, the smallest sector being the motor trade with 45,350 employees, manufacturing having 224,170 employees, agriculture 60,570, and so on – a wide, comfortable and accommodating spread. There’s not enough information in the Corporate Sector statistics to get to in-depth information about oversupply or gaps in provision so I’ll leave that aside just now and perhaps return to it later.
The number of private sector businesses increased by 3.3% between March 2008 and March 2009 and it was small firms that accounted for almost all of that rise while those private sector enterprises created more employment over that year – a 2.2% increase. It suggests a strong economy that can keep growing in the face of the economic difficulties which were becoming more than apparent over that year – and a self-confidence in Scots that allowed people to stride out on their own.
Most of our business sector is home grown too – only 3.1% of businesses operating in Scotland are owned outwith the country (and that doesn’t take account of those shareholders who own shares in these companies and live in Scotland. The difficulty I find is that these external companies (including those owned elsewhere in the UK) account for more than a third of Scotland’s private sector employment – 35.3% - and 52.4% of turnover of private sector enterprises in Scotland (23.7% for businesses owned in the rest of the UK, 28.7% for businesses owned elsewhere in the world). Granted, they tend to be the bigger businesses (supermarkets spring to mind, for example) and that some of them might have started as Scottish businesses (Kwik-Fit, for example, now owned by a French company), but it appears a bit of a weakness that so much of the business transacted here is in companies owned elsewhere. Cross-border ownership is fine (Scots companies do it too) and their very presence here indicates a strength in our economy but the profits made from the business transacted go elsewhere and I cannot escape the feeling that we should be looking to grow indigenous companies to balance it a little more in Scotland’s favour.
That, of course, once more ignores the shareholders who live in Scotland but have shares in companies furth of Scotland. It also excludes financial intermediation enterprises (banks, credit institutions, leasing, insurance, pensions, securities, fund management, stuff related to these sectors and so on) because the turnover data of these institutions is not presented in a way which can be absorbed into the figures, so that may nudge things a little more in Scotland’s direction.
RBS announced £1.6bn in operating profits earlier this year (while it considers legal action against Goldman Sachs, apparently), Scotland’s other banks should follow – including the wee Airdrie Savings Bank – but Scotland’s other financial operators are also to be counted. We have hedge funds and investment managers including a new one launched in Glasgow (Crinan Capital) last month but also some longer established ones like Aberdeen Asset Management, Martin Currie, and Dundee’s own Alliance Trust – there’s about £650 billion investment under Scotland’s managers, £726 billion in pension funds management, and £685 billion in asset servicing.
We also have fairly serious players in the financial sector and it amounts to getting on for a couple of thousand companies (including the new ones coming recently) employing about 100,000 people. Scottish Financial Enterprise estimated that the GVA of Scotland’s financial sector amounted to some £7billion in 2008. The Investment Management Association reckons that 13% of all of the UK’s funds are managed in Scotland.
I haven’t used GVA figures much here – there are arguments both ways on their use and some of the figures would help bolster my case; ONS figures, for example, suggest that Scotland has 8.4% of the UK population but 8.5% of the economically active population and 8.2% of GVA. GVA should be taken with a touch of caution at this level, though, as pointed out by ONS. Because of the methods of gathering information the confidence interval increases and ONS uses a rolling mean to smooth the effects. An interesting point about GVA made by ONS, though, is that it is measured where the wages are paid rather than where you live – as would be the ideal – meaning that London is overblown as a result of commuting, giving the wonderful irony that, according to the Office of National Statistics’ measurement of Gross Value Added, Scotland’s MPs contribute to the economic well-being of London and not of Scotland.
So how big is Scotland’s economy? Well, ONS gives our GVA per head (excluding oil) as being 97.9% of the UK’s (GVA, as noted, is skewed by much being reported in London when the work is done elsewhere) and has the North East of Scotland as the third wealthiest region in the UK (statistics due for update in December). Turnover of private Scottish enterprises (excluding the financial sector and North Sea Oil – so a fairly large chunk) was £249.5 billion in 2009 – up from £216.7bn in 2007 and £164.6bn in 2000.
The public sector is, to an extent, carried on the back of the private sector. There are arguments about whether Government spending crowds out private investment and therefore restricts economic performance and it is doubtful whether any theory will ever play out enough to balance itself up. It’s clear, however, that public sector employment in Scotland is nowhere near the levels sometimes claimed. The public sector employed 590,850 people in March 2009 and there were 24,980 employed in public corporations or nationalised bodies out of 2,586,370 – a little under 24%. Surprisingly, NHS and Social Work staff amount to 244,070; just under 40% of the total public sector employees, 9.4% of all working people in Scotland, or one in every 20 of our population. That’s a figure that I hope to have a look at in closer detail when I get some time.
I posited that an economy that was healthy enough to support an independent Scotland would have to have a wide base, flexibility, strength in depth, the space to grow, and resilience. I’ve sketched the beginning of the debate here – not completed the case by any manner of means – and I think we’re heading in the right direction, more can be found on Scotland Performs. Scotland’s economy isn’t homogenous, it has enough variety to allow it to absorb some impacts and recover, and it has resilience as we’ve seen. It has ingenuity and invention as well and it has intelligent operators who will protect their businesses (like the fishing fleet which has developed better fishing techniques to allow stocks to recover). Scotland’s people are engaged with the economy but there is still room to grow, there are opportunities and Scots are taking them. Scotland’s economy, it seems to me, isn’t a land-mass of industry so much as an archipelago of endeavour and the spaces between the islands might be as important as the islands themselves – there’s room for manoeuvre and there’s room for growth. There are weaknesses, certainly, as I’m sure there are in every economy, but there are great strengths as well. We may have far fewer of the employers of yesteryear who each employed thousands of workers but we have many, many more that are small enterprises, the dreams of individual people and the drive to make a living by their own hand. The size of the turnover of the Scottish economy is more than I expected it to be when I first started looking, and the fact that our GVA per head is approaching the UK average in spite of the skewing of London gives me great confidence in our ability to perform and to perform well economically. We punch above our weight in financial services and we punch above our weight in education, we have a robust and resilient economy.
Taken as a whole, I think it demonstrates that Scotland has an economy which can see us into independence and serve us well there. It won’t stay the same, it will change, but it should stay strong unless government makes a mess of it. It won’t improve markedly on day one of independence but a Scottish Government dedicated to improving Scotland (and the previous Executives, to some extent) has shown that it can be improved, even under the restricted circumstances of devolution and a government of whatever hue that gets its hands on the levers of economic management with Scotland’s best interests at heart will be a government that can set Scotland on a course for sustained economic improvement. It won’t be fast but it can be done.
We may carry deficits some years – as the UK does, and most other nations do – but we can carry surpluses some years, too. We may institute an oil and renewables fund to take long-term advantage of our natural resources. We may do a lot of things, but I think it’s clear that we actually do have the scope, the economic strength, the resilience, and the wit to be able to do these things for our own benefits. It’s not a fiscal argument, it’s about the economy, sensible, and we should have the courage to acknowledge that we’re as good as anyone else.
Alex Porter argued that the proper answer to the question “will an independent Scotland have a viable economy?” was “Who cares? What choice do we have?” I have a great temptation to agree with him, to agree that the UK is bust and broken and beyond repair, but I’ve also got a wee message of hope.
Not only will an independent Scotland have a viable economy, we’ve got it already, it’s functioning not too badly, it may be misfiring here and there from time to time but a wee tune-up and a decent driver and it can quite easily be purring its way along the highways and byways of the global economy, steering to catch Scotland’s best interests as it sees them. Spread good cheer, we’ve got a good economy.
Well, we’re talking not about whether we’d be fabulously wealthy or miserably poor, not about the current performance or the recent performance, nor even about whether we have the right or the wrong politicians. An economy ready to face the world as a tool of an independent country must have a wide base, a good variety of inputs and outputs; it must range across the whole country – it is likely to have different strengths in different parts of the country, and different aspects will be at different strengths in different parts of the country; it should have flexibility – the ability to change as needed; and there should be strength in depth in the major fields of the economy. To some extent, the space to grow in each of these categories can replace the need to have the capacity but throughout all of them there must be an element of resilience, without which the economy would be too fragile to be useful. The rate of business creation and attrition must play some part in the decisions on growth and resilience, and there will be other measures which can be added in as we come to them.
There are other ways of measuring innate economic strength, one of which, Natural Capital Accounting, was used by Slesser, King and Crane in the mid 1990s on a study of the possible future economy of an independent Scotland where the conclusion was that independence would be good for Scotland’s economy and would help the sustainability of Scotland in the longer term. Malcolm Slesser was an SNP member and stood for the party in parliamentary elections and he was also a respected academic. That isn’t the only alternative way of measuring an economy there are others, but let’s stick with the few measures mentioned earlier. The debate about measuring the economy will, no doubt, carry on for some time yet and I’ll content myself in the meantime with fashioning my own argument which will, no doubt, evolve over time.
The first point of inquiry, then, is does the Scottish economy engage its population? Labour market statistics in the process of being published (covering May to July 2010) as I write this show an economic activity rate of 77.5% for those of working age (slightly higher in men, slightly lower in women). The 22.5% inactive will include students, homemakers (a word I detest but can think of no other at present), those in ill-health and those who act as a carer for a relative or otherwise unable to work, but it represents 764,000 who are economically inactive. There are about 200,000 Scottish domiciled students in our universities and about 80,000 full time students in our colleges (roughly one tenth of Scotland’s working age population is enrolled in our colleges in one way or another) and there’s about 77,000 pupils still at school after reaching 16. I can’t, at the moment, find figures for the number of carers, people incapacitated through ill-health, or homemakers so can’t quantify them so they stay in the figures for now, leaving about 400,000 working-age Scots economically inactive although only 239,000 are declared as unemployed.
That seems a bit of flab in the economy and cause for a little concern. It’s not a new phenomenon, either, data going back to 2002 show that 74% was the norm for a while and a range between there and 77% held sway until the end of 2006. Economic activity rates went over 78% for a while but fell back and are actually recovering now and even excluding students and stay-on pupils, we still have around 12% of our working-age population economically inactive. That is always going to be an unused resource, if not an actual drain on our economy, and should be addressed, and that’s before you add in the citizens of this nation who are over 65. It’s interesting that it has been almost static for so long – the difference between the 74% and the current 77.5% representing around 119,000 people – quite a chunk but only just over a fifth of what it was and a quarter of the gap that still exists. It’s interesting, also, in that it suggests that the recession has not had a massively deleterious effect on our economic activity; that the Scottish economy has actually held up – in these terms – relatively strongly. There is the question of whether the economic activity is high value, and whether the overall value of economic activity in Scotland has been affected but, in terms of whether people are actually engaged in the economy, it is quite a good news story.
Additionally, it suggests that there is a workforce available for growth in the economy (disregarding, for the moment, whether that workforce has the skills that the growing sectors of the economy will need or whether it is distributed well in the geographical areas in which growth is likely to happen) and that employment growth is not just possible but desirable.
The next question would seem to be where those people are employed, both in sector terms and geographically – how wide a base does our economy have?
Excluding central and local government, there are 291,380 enterprises in Scotland (up by 12,000 since 2007 and up by 55,000 since 2000 - 2009 figures, 2010 figures are due soon) of which two thirds are sole traders and nearly 92,000 are small businesses employing fewer than 50 people each. There are 2,315 businesses in Scotland which employ more than 250 people each and 3,640 which employ between 50 and 249 people each. That’s a good spread and suggests a degree of resilience with the spread of employment allowing a few bumps and bruises to be managed. I’m impressed with the number of Scots who have their own businesses, too – giving a lie, I think, to the oft-repeated comment that we’ve lost our entrepreneurial spirit. 193,550 sole traders and 91,875 small businesses suggest a couple of hundred thousand self-employed people in Scotland - actual figures might be skewed by individuals owning more than one business, for example, or by partnership owning. These are all, however, businesses which reported turnover so no shelf companies are in those numbers.
The sector spread is quite wide based, no over-reliance on any one sector, the smallest sector in terms of numbers being “financial intermediation” with about 3,250 companies, followed by “mining and quarrying, utilities” with around 3,350.
Likewise, the numbers employed in these enterprises are well spread, the smallest sector being the motor trade with 45,350 employees, manufacturing having 224,170 employees, agriculture 60,570, and so on – a wide, comfortable and accommodating spread. There’s not enough information in the Corporate Sector statistics to get to in-depth information about oversupply or gaps in provision so I’ll leave that aside just now and perhaps return to it later.
The number of private sector businesses increased by 3.3% between March 2008 and March 2009 and it was small firms that accounted for almost all of that rise while those private sector enterprises created more employment over that year – a 2.2% increase. It suggests a strong economy that can keep growing in the face of the economic difficulties which were becoming more than apparent over that year – and a self-confidence in Scots that allowed people to stride out on their own.
Most of our business sector is home grown too – only 3.1% of businesses operating in Scotland are owned outwith the country (and that doesn’t take account of those shareholders who own shares in these companies and live in Scotland. The difficulty I find is that these external companies (including those owned elsewhere in the UK) account for more than a third of Scotland’s private sector employment – 35.3% - and 52.4% of turnover of private sector enterprises in Scotland (23.7% for businesses owned in the rest of the UK, 28.7% for businesses owned elsewhere in the world). Granted, they tend to be the bigger businesses (supermarkets spring to mind, for example) and that some of them might have started as Scottish businesses (Kwik-Fit, for example, now owned by a French company), but it appears a bit of a weakness that so much of the business transacted here is in companies owned elsewhere. Cross-border ownership is fine (Scots companies do it too) and their very presence here indicates a strength in our economy but the profits made from the business transacted go elsewhere and I cannot escape the feeling that we should be looking to grow indigenous companies to balance it a little more in Scotland’s favour.
That, of course, once more ignores the shareholders who live in Scotland but have shares in companies furth of Scotland. It also excludes financial intermediation enterprises (banks, credit institutions, leasing, insurance, pensions, securities, fund management, stuff related to these sectors and so on) because the turnover data of these institutions is not presented in a way which can be absorbed into the figures, so that may nudge things a little more in Scotland’s direction.
RBS announced £1.6bn in operating profits earlier this year (while it considers legal action against Goldman Sachs, apparently), Scotland’s other banks should follow – including the wee Airdrie Savings Bank – but Scotland’s other financial operators are also to be counted. We have hedge funds and investment managers including a new one launched in Glasgow (Crinan Capital) last month but also some longer established ones like Aberdeen Asset Management, Martin Currie, and Dundee’s own Alliance Trust – there’s about £650 billion investment under Scotland’s managers, £726 billion in pension funds management, and £685 billion in asset servicing.
We also have fairly serious players in the financial sector and it amounts to getting on for a couple of thousand companies (including the new ones coming recently) employing about 100,000 people. Scottish Financial Enterprise estimated that the GVA of Scotland’s financial sector amounted to some £7billion in 2008. The Investment Management Association reckons that 13% of all of the UK’s funds are managed in Scotland.
I haven’t used GVA figures much here – there are arguments both ways on their use and some of the figures would help bolster my case; ONS figures, for example, suggest that Scotland has 8.4% of the UK population but 8.5% of the economically active population and 8.2% of GVA. GVA should be taken with a touch of caution at this level, though, as pointed out by ONS. Because of the methods of gathering information the confidence interval increases and ONS uses a rolling mean to smooth the effects. An interesting point about GVA made by ONS, though, is that it is measured where the wages are paid rather than where you live – as would be the ideal – meaning that London is overblown as a result of commuting, giving the wonderful irony that, according to the Office of National Statistics’ measurement of Gross Value Added, Scotland’s MPs contribute to the economic well-being of London and not of Scotland.
So how big is Scotland’s economy? Well, ONS gives our GVA per head (excluding oil) as being 97.9% of the UK’s (GVA, as noted, is skewed by much being reported in London when the work is done elsewhere) and has the North East of Scotland as the third wealthiest region in the UK (statistics due for update in December). Turnover of private Scottish enterprises (excluding the financial sector and North Sea Oil – so a fairly large chunk) was £249.5 billion in 2009 – up from £216.7bn in 2007 and £164.6bn in 2000.
The public sector is, to an extent, carried on the back of the private sector. There are arguments about whether Government spending crowds out private investment and therefore restricts economic performance and it is doubtful whether any theory will ever play out enough to balance itself up. It’s clear, however, that public sector employment in Scotland is nowhere near the levels sometimes claimed. The public sector employed 590,850 people in March 2009 and there were 24,980 employed in public corporations or nationalised bodies out of 2,586,370 – a little under 24%. Surprisingly, NHS and Social Work staff amount to 244,070; just under 40% of the total public sector employees, 9.4% of all working people in Scotland, or one in every 20 of our population. That’s a figure that I hope to have a look at in closer detail when I get some time.
I posited that an economy that was healthy enough to support an independent Scotland would have to have a wide base, flexibility, strength in depth, the space to grow, and resilience. I’ve sketched the beginning of the debate here – not completed the case by any manner of means – and I think we’re heading in the right direction, more can be found on Scotland Performs. Scotland’s economy isn’t homogenous, it has enough variety to allow it to absorb some impacts and recover, and it has resilience as we’ve seen. It has ingenuity and invention as well and it has intelligent operators who will protect their businesses (like the fishing fleet which has developed better fishing techniques to allow stocks to recover). Scotland’s people are engaged with the economy but there is still room to grow, there are opportunities and Scots are taking them. Scotland’s economy, it seems to me, isn’t a land-mass of industry so much as an archipelago of endeavour and the spaces between the islands might be as important as the islands themselves – there’s room for manoeuvre and there’s room for growth. There are weaknesses, certainly, as I’m sure there are in every economy, but there are great strengths as well. We may have far fewer of the employers of yesteryear who each employed thousands of workers but we have many, many more that are small enterprises, the dreams of individual people and the drive to make a living by their own hand. The size of the turnover of the Scottish economy is more than I expected it to be when I first started looking, and the fact that our GVA per head is approaching the UK average in spite of the skewing of London gives me great confidence in our ability to perform and to perform well economically. We punch above our weight in financial services and we punch above our weight in education, we have a robust and resilient economy.
Taken as a whole, I think it demonstrates that Scotland has an economy which can see us into independence and serve us well there. It won’t stay the same, it will change, but it should stay strong unless government makes a mess of it. It won’t improve markedly on day one of independence but a Scottish Government dedicated to improving Scotland (and the previous Executives, to some extent) has shown that it can be improved, even under the restricted circumstances of devolution and a government of whatever hue that gets its hands on the levers of economic management with Scotland’s best interests at heart will be a government that can set Scotland on a course for sustained economic improvement. It won’t be fast but it can be done.
We may carry deficits some years – as the UK does, and most other nations do – but we can carry surpluses some years, too. We may institute an oil and renewables fund to take long-term advantage of our natural resources. We may do a lot of things, but I think it’s clear that we actually do have the scope, the economic strength, the resilience, and the wit to be able to do these things for our own benefits. It’s not a fiscal argument, it’s about the economy, sensible, and we should have the courage to acknowledge that we’re as good as anyone else.
Alex Porter argued that the proper answer to the question “will an independent Scotland have a viable economy?” was “Who cares? What choice do we have?” I have a great temptation to agree with him, to agree that the UK is bust and broken and beyond repair, but I’ve also got a wee message of hope.
Not only will an independent Scotland have a viable economy, we’ve got it already, it’s functioning not too badly, it may be misfiring here and there from time to time but a wee tune-up and a decent driver and it can quite easily be purring its way along the highways and byways of the global economy, steering to catch Scotland’s best interests as it sees them. Spread good cheer, we’ve got a good economy.