All three candidates persist with a fundamentally dishonest prospectus for breaking up the UK that has been the nationalist leitmotif ever since the 2014 referendum. In particular, they offer a supposedly painless prescription for the economy, taxpayers and business that each of them must know is misleading. After all, the hard data is there – on finance, trade, and the currency – collected for them every year by the civil servants who work for the Scottish Government on their behalf.
Until now, however, what has never been attempted is a whole-economy analysis of the impact of independence, aggregating all the abundant evidence to see what would happen to jobs, public spending and output. To fill this gap, Scottish Business UK (SBUK) commissioned a study to measure exactly that. Independence Uncovered was published last month and its findings make an essential contribution to the debate.
First of all, some parameters. We wanted the study to leave as little open to argument as possible. With that in mind, it uses just data and methodology that is widely accepted by the nationalist movement. The Gers fiscal dataset is collected by Scottish Government economists using accepted statistical methods. Even Nicola Sturgeon admits it gives an authoritative picture of Scotland’s finances. The trade impacts were measured using the same methods deployed by the Scottish Government in their assessment of Brexit trade costs. The study errs on the side of caution on all of this and more, giving the nationalists the benefit of the doubt on issues such as defence and energy.
Where there is uncertainty about political outcomes (for example, on Scotland joining the EU, launching its own currency, and reducing defence spending) the study assumes the best outcomes from the SNP’s point of view. As a result, the findings are probably an underestimate, as they do not consider issues like the knock-on effects on businesses and consumers from such big cuts and cost increases, or market reactions to the break-up of the UK, and delays in new trading arrangements, or the likely behavioural change of taxpayers on independence. Further, we commissioned an economist, Richard Marsh, who has an unimpeachable record of work in this field not just with the Scottish Government but even the SNP itself.
The results make sober reading for anyone concerned with Scotland’s future. Leaving the Union would cost at least 250,000 jobs and shrink Scotland’s GDP by more than ten per cent. There would be painful tax rises and higher costs to businesses and households. The impacts of public spending cuts would be felt most harshly in the most deprived parts of Scotland. Meanwhile, some of our most successful industries and regions, from Aberdeenshire to Edinburgh and Glasgow, would suffer heavily, with finance, engineering and export-related businesses particularly affected.
Anyone familiar with the facts and arguments around independence should know intuitively that these results are broadly in line with the data that has been widely available for years now. That includes the SNP leadership. It behoves whoever becomes Scotland’s First Minister to come clean with the country about the heavy economic cost that our nation would face on day one of their ambitions being achieved.
Struan Stevenson is chief executive of Scottish Business UK