This month marked eight years since the Scottish Independence Referendum and it’s fair to say that they have not been a quiet eight years. Brexit, pandemic, economic turmoil and the grinding poverty caused by over a decade of Austerity are taking their toll on the wellbeing of the country. It’s certainly not the promised “sunlit uplands” or even the pre-2014 “status quo” that many thought they were voting for. As we move into a fresh independence campaign, it’s worth looking back at some of the things we were promised in 2014 by the pro-Union campaign and how those promises have panned out since.
Probably the thing that’s on the forefront of everyone’s mind at the moment as we go into what could be a very harsh winter. In 2014 many promises were made about how cheap UK energy would be if we voted No and even in the 2016 Brexit referendum, the promise of a 5% cut in energy bills was one of the very few, actually tangible policy promises made by the Leave campaign (along with extra money for the NHS). It’s said that the science of economics is less about predicting future prices as it is about trying to create a model that would have predicted yesterday’s prices if only you had invented it last week. In that sense, be wary of anyone who tries to give you an amount you’ll “save”, “gain” or “lose” as a result of any unpredictable or complex event. It’s worth saying though that while we didn’t try to predict the price of energy in 2022, we did predict the vulnerabilities in the UK energy market and how to fix them. Part of that is in nationalising our energy and launching a public energy company – something that the Scottish Government said they’d do but failed and something that UK Labour is now claiming as policy too. However another major part of the problem is the shape of the energy market, energy infrastructure and the future of energy resources. Launching a public energy company is part of that but doing so without fixing everything else will see it doomed to failure. In that respect, Keir Starmer’s new plan is a welcome step in the right direction but far from a complete journey. Scotland’s energy ambitions could be much, much larger than they are but unless we get a UK Government willing to grant power to Scotland to achieve those ambitions then they won’t happen. Given that Liz Truss is actively pushing against that idea by taking a punt on nuclear and fracking – neither of which will involve Scotland at all unless she’s willing to override Holyrood and devolution – then we might be waiting a while.
The 2014 campaign did not envisage anything other than the status quo with regards to the UK’s EU membership. The main argument at the time was that the UK would certainly stay in the EU but it could be very difficult for an independent Scotland to re-enter the EU. The Yes side of the campaign was fairly sure that Scotland could achieve some kind of “continuity membership” whereby the UK’s “seat” would be split in two and Scotland would take its place – possibly only with some adjustments to some aspects such as opt-outs and vetoes held by the UK.
That view was perhaps naively optimistic but it’s certainly a future that we’ll now never see. The 2016 Brexit Referendum made sure that Scotland’s membership of the EU was removed from it, regardless of our vote in favour of Remain, and once that happened, the prospect of a continuity arrangement went with it. As discussed on the Policy Podcast a few weeks ago, Scotland is now essentially in the position of being between two close, large but essentially mutually exclusive trading and political blocs. The Scottish independence campaign is no longer about how Scotland can maintain close relations with the EU despite independence but how close Scotland wishes to grow towards the EU (up to and including full membership) knowing that every step we take in that direction takes us a step further away from the rUK trading and political bloc. This is just one in a series of EU-related questions that we’ll need to answer as quickly as possible. The longer Scotland spends within the UK, every one of those steps is being actively made more difficult by the UK Government’s attempts to diverge from the EU as much and as quickly as possible. Each step away from EU convergence criteria that is allowed to bed in is one that will need to be unpicked to allow re-entry into the EU or possibly even into the Single Market.
We know that many people voted No in 2014 specifically because their overriding concern was to maintain EU membership that underpinned their right to live and work in Scotland. Those folk were betrayed by everything that followed that vote up to and including the discrimination, harassment and uncertainty they have faced as a result of Brexit, Settled Status and the UK’s Hostile Environment towards migrants. It’s no wonder that so many are now looking at independence as a lifeboat from that, to the point where migrants to Scotland may now be one of the most pro-indy demographics we see in polling.
Strong and Stable Currency
I’m sure we’re all watching with a sense of morbid horror at just how much the UK Government can mess with the economy despite barely turning up to work since being appointed due to first the Queen’s death and now due to political party conference season. However, the decline of the UK’s “strong and stable” economic foundation has long predated current events.
In August 2014, Better Together tweeted out support for the UK’s currency as being “one of the strongest and most successful currencies in the world”. On that day, the GBP traded at $1.683, meaning that if you wanted to spend £100 to buy US dollars, you would have got $168 or if you wanted to buy $100 or import $100 worth of goods, it would have cost you £59.
As I write this on September 29th 2022, the GBP is trading at $1.080. This means that £100 will now buy you just $108 or if you need to import $100 worth of goods from the USA, it’ll cost you £92.50 – Around 56% more than it would have in 2014.
Now, only part of this is due to the economic woes of the UK. The US dollar has been steadily strengthening over recent years and many major currencies have fallen with respect to the dollar but we can cross-compare the pound against those currencies to account for this. The UK Pound is only worth 64% of what it was worth in US dollars now compared to August 2014. The Euro has also fallen against the dollar (and, indeed, has fallen below the psychologically powerful “parity” point so that €1 is now worth less than $1) but this means that the Euro is worth 74% of what it was worth in dollars in 2014. All other things being equal, we should therefore expect the pound to have fallen against the Euro so that a pound is now worth about 85% of what it was worth in Euros in 2014. And, indeed, this is precisely what we see.
If anything, this does highlight the need for an independent Scotland to have its own currency and to not Sterlingise as per current Scottish Government plans. No-one will claim that the Scottish currency and economy won’t face its own trials but as I pointed out several years ago now, an economic crisis such as the one we’re currently facing will only be made worse if Scotland is trying to do one thing with its economy and the Bank of England determines that the remaining UK should move in the opposite direction.
Faster, Better Democratic Change
The week of the independence referendum infamously saw “The Vow” and Gordon Brown’s promise of “something near to Federalism” after a No vote. It’d be unfair to say that there has been no change in Scotland’s democratic powers since then but we’re certainly far from that promise. Most of income tax was devolved but missing are key tools such as the Personal Allowance and the fact that it’s quite easy for high earners to transfer “income” into “capital gains” and benefit from lower rates controlled by Westminster. Add in the political pressure from Unionist parties that says – simultaneously – that Scotland must “use the powers of devolution” but must never actually use those powers to do anything other than copy UK rates exactly.
Other promised devolution powers have not materialised. Partial devolution of VAT was cancelled because it proved too complex to split the tax within a devolved context. The devolution of Air Passenger Duty was cancelled because it turned out that the way the UK had implemented the tax may have been illegal and the UK Government wanted to transfer that legal liability, in full and including historic breaches, to Scotland and the Aggregates Levy might finally be devolved this year….maybe. In other respects, devolution has gone backwards. Powers that were devolved but held at EU level were grabbed by the UK Government, protections against the UK overriding devolved decisions were found to be so weak as to be useless, and the UK has recently been embarking on a deliberate strategy of undermining devolution by playing Scottish Local Authorities off against Holyrood and against each other to show sufficient fealty to qualify for funding and other resources.
Scotland has many issues due to its lack of local democracy and as we pointed out in our recent consultation response on the National Care Service, Scottish Ministers are not exactly averse to trying to grab powers from Local Authorities in ways that they would be the first to complain about if Westminster did it to them.
But what we don’t have is the “Home Rule” or the Federal State that we were promised, we have no clear roadmap to getting to either of those goals and, eight years after promising it to us, Gordon Brown is now offering much, much less and is just as likely to actually deliver it.
The UK is one of the most regionally unequal countries in Europe. When we first said that, several Unionist voices spent a lot of time and effort trying to discredit the claim. When the Economist and the Financial Times started saying it, most of them stopped or tried to paint it as a positive aspect of the UK’s “Pooling and Sharing”. When Boris Johnson started saying it, I think that put paid to the argument altogether.
Johnson pinned his election on the idea that he could win the “Red Wall” of the North of England – somewhere even more devastated by Thatcher and later Austerity than Scotland was without even the meagre benefits of devolution to shield itself. His idea ran contrary to that of “Pooling and Sharing” which says that it doesn’t matter to where the wealth flows in the UK, only that it does and only that it is redistributed according to need. “Pooling and Sharing” says that it’s absolutely fine to dismantle the UK’s manufacturing sector and concentrate all economic activity in financial services in London because we can tax the bankers and spread the money around. It also says that if you, outwith London, dare to try rise up above your station then you shall be denigrated as selfish and uncaring about the plight of other workers elsewhere.
Johnson’s “Levelling Up Agenda” was stated to try to rebuild economies outwith London – only in places that voted for him or might in the future mind you and only if local politicians were sufficiently loyal – and came only with one very small, almost insignificant really, problem.
It didn’t work. At all. In fact, things got worse.
At least he tried or pretended to try though?
Successor PM Liz Truss has made it quite clear that she’s not going to even go that far. “Redistribution” is only to be said in reference to how much of our money is given over to the already super-rich. Wealth tax on energy companies? Nah, how about a tax cut and a multi-billion subsidy package instead? It’s like an inverted version of Robin Hood. She’s actively trying to cut our economy out with a spoon.
Neither of these options – Johnson’s “Pooling and Sharing” or Truss’s “Sheriff of Nottingham” economic model benefits Scotland. In fact, at best, it leaves Scotland on benefits. If this is the kind of country that the next pro-Union campaign wants to front then fair enough but I think most voters will want to hear something a bit more ambitious.
Independence offers Scotland the chance to do things differently from the UK. I know that Common Weal has been intensely critical of some of what even other pro-independence voices have offered as (not so) different but that’s the point. We should be using our independence as an opportunity to do the radical thing rather than just becoming a mini-UK where we look to Holyrood to “Pool and Share” instead of Westminster. When the campaign to stay in the UK comes offering promises next time, do remember what they have already promised Scotland for our vote in 2014 and how little they actually delivered on that when they were given the chance.