The flow of revenue is the issue that will determine social justice in Scotland, not independence, writes Peter Jones
Discussing the Scottish independence referendum with a mixed crew of German and Scottish academics in Germany is bound to throw up unexpected insights. But in Germersheim, south-west of Frankfurt, last week, what came up, to bowdlerize the language of Donald Rumsfeld, was both the expected unexpected, such as shining new light on the union, and the unexpected unexpected, like putting the independence debate in a completely different context.
It is both pleasing and discomfiting to discover that at the Scottish Studies school there, a faculty of the Johannes Gutenberg University, Mainz, academics are scrutinising every word written in Scottish newspapers (and a few websites) for the open and hidden meanings that they have for the course and conduct of the independence debate.
Pleasing, because it is good to meet an audience you never knew existed; discomfiting, because you discover your writing is being rigorously picked apart. But that’s good too, because in the new age of transparency and openness, journalists should be open to challenge just as they call others to account.
The expected unexpected thought that grew with me as the conference progressed was that the referendum is shining a light on the union such as has never been shone on it before.
Sure, this is to be expected. The unexpected bit is that it is illuminating aspects of the union which have been ignored, forgotten, or just taken for granted. When examined in that new light, it may be discovered that they are more valuable than once thought.
Take for example, the debate about welfare under independence. A couple of the papers at the conference discussed how the welfare system, under independence, could be re-shaped to better fit Scottish needs and values. Universal provision, for example, more treasured north of the Border than south of it, could be preserved and maybe extended.
Perfectly true, provided, of course, that there is the money to do it. I decided to play devil’s advocate, and asked why did Scotland need independence in order to deal with social problems such as drink and drug addiction, when we already have control over all the mechanisms – education, police, social work, health – that need to be mobilised to tackle these issues.
The answer was interesting – that the independence debate, far from being a severe distraction from the job of dealing with these social problems, is actually creating the space within which to discuss how to deal with them. Interesting, but not very convincing. Why on earth can’t we have this discussion without having to be provoked by a constitutional argument?
The discussion moved on to questions of equality and social justice. It highlighted for me how much of Scotland’s problems in this area are not simply about income inequality, but stem from the failings of Scotland’s education system. Again, the question occurs: why do we need independence to fix this when we already have the tools?
A nationalist answer might be that independence would provide greater resources. That, however, has yet to be demonstrated with any clarity and brings into the debate the whole question of North Sea oil tax revenues and the flows of public spending within the union at the moment.
At this point, the thought occurred to me that you could examine the flows of public money between the constituent nations of the UK and ask how well these flows help achieve social justice.
During the conference, a non-academic speaker from Glasgow who had come to explain why she was voting Yes repeated the nationalist trope that Scotland is the only country in the world to have discovered oil and got poorer. To be fair, she wasn’t stating this as a truth, rather she was using it to illustrate the feelings of many Scots about the union.
But it is untrue. In another session, Murray Pittock, the distinguished Glasgow historian, noted that in 1960, Scottish GDP per capita was 87 per cent of the UK average. Now, even excluding North Sea output, Scotland’s onshore GDP per capita is 98.6 per cent of the UK average.
So, while nationalists are entitled to argue that with oil, Scottish per capita GDP would be higher than the UK average (though that doesn’t mean Scots as individuals would be richer because of another set of economic calculations that come into play) it is nevertheless also the case that Scots did get richer relative to the rest of the UK after oil was discovered.
This also leads on to an entirely unexpected unexpected thought – that it could be argued the union has been a means of achieving social justice between the constituent nations. I haven’t had time to crunch the relevant numbers to test this, but in broad terms, the 1980s were a boom time for oil revenues in which Scotland, if you allocate it a geographic share of revenues, had a surplus in taxes.
Nationalist rhetoric says that this boom was swallowed up by the “London Treasury” which wasted it on paying unemployment benefit in the searing de-industrialisation of the Thatcher years. In the 1990s, when oil revenues were low because of low oil prices, Scotland had a deficit in tax revenues, so the spending flow reversed. In unionist rhetoric, Scotland became a subsidy junkie.
These days, the flows are much more balanced with Scotland, in perhaps the majority of years since 2000, being a net contributor. At this point, let’s remember, the union does not just comprise Scotland and England. It includes Wales and Northern Ireland, both of which countries have been consistently poorer than either Scotland or England. This puts the whole indyref business in a completely different light.
It could be argued that over the last three decades Scottish North Sea revenues have helped alleviate poverty in England in the 1980s, and consistently done so in Wales and Northern Ireland since 1980. Equally, English tax revenues performed that task in Scotland in the 1990s.
Returning to the micro-question of whether independence could help the achievement of a more socially just Scotland, a complete answer depends on answering the macro-question of whether it is easier or more difficult to do that without the changing and balancing flows of public money between the nations of the union.
Plus, there is the added question of whether Scots want to abandon Wales and Northern Ireland to England’s tender mercies and possibly to increase social injustice in those parts of the union. Now that was an unexpected unexpected thought.