Brian Monteith: Public services after independence

The working-age population of the EU is falling. Picture: Yves Herman

It IS a strange fact that as Scotland faces the most momentous democratic decision of its history, our mainstream politicians fail to consider the nature of the modern world by the end of this century and what would be the optimal geopolitical position for our nation.

What way should Scotland face in 2050 and beyond? Will the interests of our children and the generations that follow be best served by institutions that bind us into an ever-closer union with the rest of Europe or would it be better to have greater flexibility – dare I say it, more freedom – to adapt to the prevailing economic circumstances of the times ahead?

The vote on 18 September is clearly more important than the devolution referendums of 1979 or 1997 – and yet it has thus far been defined by retail politics: the two opposing camps offering consumption, now and in the near future, that others – our children and grandchildren, rather than us – will pay for. Claims abound of being £5,000 better off in the future (Yes) or £1,400 better off now (No) when in fact we are being bribed with money not yet earned or produced by the efforts of individuals toiling or creating. Scotland, like the United Kingdom, lives on the never never.

And yet despite the salutary lessons of Gordon Brown’s debt bombshell that the SNP consistently argued was never enough, the politicians believe we crave yet more free public services. Maybe we do, maybe we have not yet learned that we cannot have what we do not work for, and that in this world of financial mobility we cannot simply confiscate more and more personal or corporate earnings to finance the “free” availability of prescription drugs, bridge tolls, old age personal care, university tuition – and, now, ever-greater childcare.

The mirage of “free” public services financed by hardworking taxpayers or postponing the bill through yet more public debt is replete in the SNP’s white paper.

That the childcare offer, callously designed to win political support from women, cannot be funded unless Scotland magics-up an additional 40,000 mothers that do not and are not expected to exist – so that they can “return to work” and provide the taxes that could fund the “free” benefit – remains one of the most outrageous bribes ever offered to an electorate. And yet the First Minister and his team are never pressed on this issue.

The fantasy of “free” tuition fees that make politicians feel good but transfers wealth from the working poor to the middle classes – and delivers a poorer social outcome in terms of social mobility than charging a going rate and recouping the cost through taxes on improved earnings – is also left unquestioned, to undermine old-fashioned Scottish values of prudence and self-help.

Nobody, not even the few eurosceptic voices, ever ask audibly what will the trading pattern of the world be once we decide to remain in the UK or become independent. Who will Scotland trade with in the future to give us the best chance of earning all these “free” services – or at least servicing the debt that we have run up to consume the benefits now?

It is assumed by the Yes camp, be it the SNP, the Greens or the revolutionary left – and the No camp, in the form of the Labour, Conservative or Liberal Democrat parties – that we should want to be in the European Union as that’s where our future lies. It is a given: the argument is not about whether Scotland should be in the EU as an independent nation, but at what price, under what terms and conditions and if we shall suffer a hiatus between leaving the UK and joining the EU. The British debate about the future shape of the EU and if it would suit the UK or Scotland to remain a member is not even discussed – it is simply accepted as a good thing. And yet the changing nature of the world suggest otherwise.

Research carried out by the think tank Global Britain, based upon the most comprehensive and robust data available from the United Nations’ population division of its Economic and Social Affairs Department, suggests that the European Union will become a straitjacket restricting rather than aiding economic prosperity.

Between now and the end of this century, the EU as a whole will decline economically, militarily, politically and culturally – primarily because it will be a shrinking market, relatively unattractive to investors – while the US and Asia will become more powerful than today in all of those fields.

Global Britain reports that between 2013 and 2025, the population of the EU excluding the UK will increase from 446 million to 450m; but by 2050 – only 37 years away – will shrink to 439m. By 2100, it will be under 400m. Between 2025 and 2100, the EU-27 will lose 53m people – more than the entire combined present-day population of Spain and Portugal. By 2050, the EU’s working-age population (including Germany, Italy and France) will decline by 54m while the UK’s will increase by three million.

The shrinking and ageing population of continental EU will mean more demand for state-provided healthcare and pensions, with fewer active people to provide them, resulting in a shrinking tax base and leading to higher public sector debt and tax rates. Meanwhile, sharply diverging demographics within the EU will make its “one-size-fits-all” policies on public finance, taxes, the labour market, agriculture, immigration, environment and energy etc ever more ineffective and divisive.

For the British people, the economic rationale of integration into the EU’s contracting market will become ever more questionable – as it will for Scotland if we decide to become independent. The answer then is to have a debate and decide what is the best orientation for the United Kingdom, or Scotland. Instead, we are apparently fixated with the need for Holyrood politicians to have greater powers to play the game of political bribery with our own money, or that of future taxpayers.

We are sleepwalking into an economic catastrophe by considering the wrong issue and ignoring the real threat to our standard of living. Scotland first needs to ensure it remains in the one part of the EU with positive prospects – the UK – and then plays a full part in asking where Britain’s future lies – smothered by the declining EU or trading freely with the rest of the world.