Analysis on the government independence prospectus
The Scottish Independence Prospectus Assessment provides expert analysis on the Scottish Government’s “Building a New Scotland” series of papers – its revised prospectus for Scottish independence. New analysis will be added for each paper after its publication. Offering a strategic perspective, the Assessment reviews major arguments advanced in the papers and evaluates their relationship to the principal points of the independence debate. The Assessment is undertaken by Anthony Salamone FRSA, Managing Director of European Merchants.
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Note on this Assessment
As part of its independence referendum strategy,1 the Scottish Government has launched a series of papers which it has said will set out its revised case for Scottish independence. Its series, called “Building a New Scotland”,2 is to be published incrementally over the months ahead. For better or worse, the issue of independence permeates nearly every aspect of Scotland’s political life. We know that the circumstances at home and abroad now are markedly different to those during the campaign for the 2014 independence referendum – not least the realities that Brexit has been realised and the UK has not been an EU Member State for over two and a half years. Despite the change, many of the central questions of the debate, and many of the talking points of both sides, have remained constant over recent years. In that time, the Scottish Government and the SNP regularly deferred offering much detail in response. Their series may provide their answers to those questions of independence.
At this stage, we are aware of the major points of debate: the economy, public finances, currency, EU membership, the Scotland-UK border, pensions, defence and security, among others. Independence would be the proposition of change, so it is incumbent on its proponents to set out their case for how Scotland could transition to statehood and what kind of state Scotland should be. In that regard, the “Building a New Scotland” series is a prospectus for Scottish independence. That prospectus may include proposals to address the major points of debate. It will surely feature the professed positive attributes of independence. It will likely present the purported negative consequences of remaining part of the UK – a logic that I would call “the cost of non-independence”, analogous in some respects to “the cost of non-Europe” (employed to justify greater European integration in various domains).3
Given Scotland’s deep political divisions, the default response to the “Building a New Scotland” series will be uncritical welcome by many supporters of independence and presumptive dismissal by many supporters of the UK union. Their synthesis significantly diminishes the quality of political dialogue. At the same time, the independence debate will persist over the months and years ahead. In that light, the Scottish Government’s prospectus should be assessed and discussed based on its contents, not embraced or rejected for its existence. Moreover, it is possible (though not certain) that, if a bona fide independence referendum takes place in the future and produces a majority for independence, its prospectus could be the basis on which Scotland builds a new state. It should be reviewed closely.
The purpose of this Assessment is to provide such a review, drawing on the expertise of European Merchants. It will analyse each paper in the Scottish Government’s “Building a New Scotland” series. In doing so, its aim is not to give a line-by-line annotation, but to offer a strategic assessment. It will interrogate major arguments and assumptions, and highlight challenges and opportunities at play. It will add context and present a different perspective. As the independence debate evolves, proposals and counterproposals from different quarters will take on greater importance, as will the imperative for rigorous analysis. In that regard, this Assessment reflects the mission of European Merchants – to provide clarity and insight to politics, especially amidst division and confusion. Alongside our wider work, it will support informed and substantive conversation on Scotland’s constitutional future.
Anthony Salamone FRSA
18 October 2022
Note on the Prospectus
When considering, or analysing, the Scottish Government’s “Building a New Scotland” series, it is important to take full account of its context. The present Scottish Government supports independence and desires to hold a new referendum to achieve that goal. At its core, its prospectus is designed to increase public support in Scotland for independence and to contribute to its realisation. The Scottish Government is entitled to make its case on any policy matter which it believes should be addressed. Nevertheless, the Scottish Government is not a think tank, university or other research organisation – it is a government with a political orientation and political objectives. Accordingly, its prospectus is not a neutral analysis. Any evidence, arguments or conclusions offered should be viewed in light of the Scottish Government’s political aims – principally, that Scotland should become an independent state.
The contents of the “Building a New Scotland” series reflect the perspective of the contemporary Scottish Government. They do not represent guarantees of what would happen in the event of independence, but proposals for what might happen. If the same government were in office during a post-referendum transition to statehood or after independence, it would be in a position to seek to implement its proposals. However, it is possible that the government at the time could be formed of different political parties, under which alternatives could be pursued instead. In part because of the possibility of such political change, some question the merits of government (including civil servants) producing these proposals instead of political parties advocating independence. Notably, the former carries the imprimatur of the Scottish Government, while the latter does not. Should it take place, independence would be a transformation – taking Scotland from its present position and making it into a state. That transformation would involve wide-ranging change and it would require citizens, businesses, organisations and government to adapt to new realities. Ultimately, in the event of a new referendum taking place, each voter would make their own choice about independence. The Scottish Government’s independence prospectus is but one part of the debate on Scotland’s future.
1 – Independence in the Modern World. Wealthier, Happier, Fairer: Why Not Scotland?
Analysis Author: Anthony Salamone
Analysis Date: 18 October 2022
This paper presents information designed to compare the economic and social performance of the United Kingdom, recently and over a number of years, with 10 European small and medium states which the Scottish Government contends are comparable to Scotland. It argues that, since these comparator states score better than the UK in a variety of league tables and other measurements, Scotland does not currently achieve its full potential as part of the UK and should instead become independent to emulate the performance of the comparator states. The Scottish Government described this paper as a “scene-setter” at its launch.4 The paper does not contain any substantive proposals on the transition to statehood or the policies of a Scottish state. It indicates that proposals will be included in future papers in the series. The following assessment addresses five aspects of the paper: (1) its approach of comparing small and medium states with the UK instead of Scotland; (2) the absence of a rationale for selecting the 10 states for comparison; (3) the lack of data on Scotland and the context required for trust in government data; (4) Scotland’s relationship with “the UK’s economic model” and the Scottish Government’s role on economic policy; and (5) the limitations of arguing that Scotland could have hypothetically achieved the same results as European small and medium states, or that Scotland can match their performance in the future by emulating their strategies and policies.
Comparison Approach – On a variety of indicators, the paper compares the performance of the UK with 10 European states: Austria, Belgium, Denmark, Finland, Iceland, Ireland, the Netherlands, Norway, Sweden and Switzerland. However, this comparison approach is inherently flawed. An exercise of this kind should be formulated in one of two ways: (1) to compare the UK with European states of similar size (by economy and population) – that is: large states or (2) to compare Scotland with European states of similar size – that is: small (and potentially medium) states. In this context, suitable comparator states for the UK would be France, Germany, Italy and Spain. Instead, the paper intermixes the two options – it measures the UK against Scotland’s comparator states. Given that states of significantly different sizes have contrasting circumstances and challenges, the numerous comparisons in this paper based on the UK, and not Scotland, do not hold as much weight as they otherwise might. In simple terms, the paper compares apples and oranges – in evidence with its contention that the UK (population: 67.4 million, GDP: $3.3 trillion) and Iceland (population: 373,000, GDP: $21.6 billion) are suitable for wide-ranging comparison.5 Using the same datasets cited in the paper, the table below presents figures for performance indicators referenced – for the 10 small and medium states, the four large states and the UK.6 The figures demonstrate that, on these measures, the UK’s performance is in fact broadly similar to the average of its fellow European large states.
Comparator States – Beyond its mismatched comparisons with the UK, the paper does not offer a detailed rationale for the 10 European states selected for comparison. It declares only that those states have “economic and social models” which are “relevant to Scotland’s circumstances” and “consistent with the current Scottish Government’s aims and objectives.” Given the centrality of these comparisons to the paper’s entire premise and its resulting arguments, a more substantial case for these choices would have been expected. Since comparisons of this nature often entail degrees of subjectivity and imprecision, a sufficiently robust rationale could have explained and supported the choice of comparators. Of the 10 states, Denmark, Finland, Ireland and Norway are particularly relevant for Scotland, given their economy and population sizes and other factors. Even relative to Scotland, Iceland is markedly small; the Netherlands, one of the largest economies in the EU, is too large. Austria, Belgium, Sweden and Switzerland, absent a suitable argument, are also sufficiently larger than Scotland to question their inclusion. Conversely, the paper does not include the Baltic states of Estonia, Latvia, and Lithuania which, while smaller than Scotland, could have merits for comparison. Croatia and Slovakia have a similar headline population size to Scotland.7 All five states transitioned to statehood or regained statehood within the last four decades, in contrast to the 10 selected states. Their societal evolution after independence could be relevant for the Scottish Government’s purposes. Of course, the 10 chosen comparator states are wealthier and from the Western side of Europe; these 5 proposed states are less wealthy and from the Eastern side of Europe. In the absence of greater explanation, the reasoning for the paper’s chosen states is ambiguous.
Scotland Data – Despite being dedicated to promoting the case for Scottish independence, the paper offers few figures or measurable points of comparison about Scotland. An exception is a reference to trust in government in Scotland. The paper notes consistent survey findings that people in Scotland report having more confidence in the Scottish Government than the UK Government to act in Scotland’s best interests.8 It also offers trust in government figures for the 10 comparator states and the UK. As indicated, however, the logical comparison should be between the comparator states and Scotland. Alternatively, since Scotland is a sub-state, the paper could have included corresponding data on trust levels in sub-states of the comparators for their sub-state and state governments. Moreover, context on Scotland’s government trust figures is warranted, such as: Scotland has an active independence debate and, consequently, a sizeable portion of the population is predisposed to favouring the Scottish Government over the UK Government; the Scottish Government is a sub-state government and receives credit or blame for policies (whether or not it is actually responsible for them) depending on how individuals understand and assess the multi-level governance of Scotland; the Scottish and UK Governments have had an adversarial relationship for a number of years, supporting an impression of the former defending Scotland from the central state. In any event, the paper’s scarcity of data on Scotland is surely unusual for a document about Scotland’s future.
Economic Model – The paper is critical of what is describes as “the UK economic model”. In doing so, it attempts to suggest that Scotland is not an integral part of the UK and that economic model. It states that Scotland has “remained too reliant on the relatively poorly performing UK economy” and that it could “suffer from excessive reliance on such an economy.” Plainly, Scotland is fully integrated into that same economy. Over centuries, Scotland has contributed to shaping the institutions of the UK, including its economic structure. Where the paper contends that “the UK is not well placed to meet the great challenges of the 21st century” which it outlines, it does not seem to recognise that, if that claim is accurate, Scotland shares partial responsibility. The argument that Scotland has only ever been passive to the evolution of the UK and its economy is unconvincing. Moreover, the paper implies that the Scottish economy, after independence, would be managed fundamentally differently than the UK economy. In reality, however, it is unclear to what extent Scotland would be in a position to depart from its well-established economic model – or how much Scottish business and wider society would support such a shift. Given the paper’s emphasis on economic governance, it should have scrutinised not only the economic policy of the UK Government, but that of the Scottish Government as well, while taking into account their distinct, yet complementary, responsibilities. The paper includes examples, like the Danish Disruption Council, Swedish Job Security Councils and co-operative ownership, which could all be pursued in some form within the present constitution. Nevertheless, the paper does not explain why, if the Scottish Government is convinced of their merits, it does not advance them now.
Comparison Limitations – Throughout its review of economic and social performance, the paper fuses two distinct claims: (1) Scotland could have achieved similar results in these areas as the comparator states, if it had been independent (presumably for at least the last 50-100 years); (2) Scotland could build its state to match the performance of the comparator states through emulation, if it became independent in the future, on an unspecified timescale. Both claims demonstrate the limitations of the paper’s comparisons. First, it would be extremely challenging to determine to a reasonable degree how Scotland might have hypothetically evolved if had not been part of the UK, say for the last century, and had instead been an independent state. That inherent difficulty perhaps explains why the paper does not attempt to do so – and prefers to measure the comparator states against the UK. If Scotland had been independent, it may or may not have matched the performance of the comparator states. Nevertheless, the paper takes their examples as proof that the “full powers of independence” are essential for Scotland to achieve its potential. Implicit in that argument is the contention that the comparator states performed better than if they had not been independent. Yet, that counterfactual is convoluted: their existence has not been balanced against the prospect of non-independence. The evolution of the comparator states is not based on reference to an alternative. Second, it not evident that the strategies and policies pursued by the comparator states would be relevant for Scotland, as an independent state, at some date in the future. For instance, Ireland’s trade diversification over the last half century has taken place under markedly different circumstances than those which Scotland would face if it became independent in the years ahead. In any eventuality, a Scottish state could well require some years of effort to match the performance of these states.
Some voters may well be interested in how Scotland compares in political, economic and social terms to European states of similar size. However, this paper does not offer such comparison. Instead, it measures European small and medium states against the UK, a European large state and one of the largest state economies in the world. Many of the league tables and metrics mentioned in the paper are designed for states. In response, the Scottish Government could have taken various steps, such as: estimating Scotland’s performance for these metrics, drawing on its extensive data on Scotland and extrapolating from data on the UK; referencing alternative metrics for which figures for Scotland are regularly available; or undertaking a different exercise altogether, given an inability or reluctance to produce data on Scotland. In the absence of such measures, the mismatched comparisons made in the paper between Scotland’s ostensible counterparts and the UK diminish its resulting arguments and conclusions. If Scotland became independent, it could indeed seek to learn from the experiences of similarly-sized states, or endeavour to create a different economic model. Nevertheless, it is equally possible that Scotland could retain many aspects of its current economic model or, in the face of European and international realities, the pace or scope of such change could be modest at best.