Proposal to devolve all powers over broadcasting to the Scottish Parliament, and to establish a Scottish Broadcasting Service (submission to the Smith Commission)

1. The principles underpinning this proposal
This proposal is informed by three main considerations. First, it is consistent with the goal of reinforcing democratic accountability for the governance of Scotland. A national, publicly-funded broadcasting service needs to be genuinely accountable to the people of Scotland, and work in the interest of creating a better society. Second, a Scottish television and internet broadcasting will function as a stimulus to artistic and economic growth in Scotland, by supporting creative industries and by enabling the population as a whole, and sections of that population, to engage in dialogue around critical aspects of social life, in ways that will contribute to a sustainable and just future. It is only through full and inclusive national dialogue that meaningful long-term planning can take place. Third, the existence of a locally-accountable broadcasting service is necessary in order to maintain cultural traditions in the face of trends toward the globalization of cultural life. This is particularly important in an English-speaking country. In other small countries (Norway, Denmark, Slovakia) it is possible to maintain cultural identity on the basis of shared language.
2. Assessment of the current situation
At the present time, the BBC is a UK-wide body, with a regional branch office in Scotland. There is broad agreement in Scotland that BBC Scotland does not adequately serve the interests of the Scottish people. Given the history and structure of the BBC, its alignment with the UK establishment, and the basic fact that over 90% of its output needs to meet the needs of people who live in other parts of the UK, it would not be possible to reform the BBC in a manner that would satisfy the requirements of the people of Scotland.
3. The potential advantages to Scotland and the UK as a whole (and/or its constituent nations) of devolving these powers to the Scottish Parliament
Scotland would gain a vital institution that would take a lead role in the renewal of Scottish society. The UK as a whole would have access to Scottish programmes that offered a different perspective on matters of shared interest. Creative industries in the UK as a whole would gain by the establishment of a new creative hub. One of the major advantages to Scotland would be that a new national broadcasting service could be designed in a way that was responsive to current technological and social developments. For example, during the referendum it became apparent that it was possible for a wide range of individuals and groups to make broadcast-quality documentaries that played a significant role in the national debate. It would be possible for a new national broadcaster to devote at least one channel to hosting such programmes, including payment of fees to programme-makers. Another area in which an innovative approach would pay dividends would be in the area of more effective and accessible archiving of programmes. At the present time, public dialogue is inhibited by the fact that many excellent informational programmes are hidden from view within a short time following transmission. There is a need for a internet-based TV ‘library’ that is open to all, along similar lines to book libraries. A Scottish broadcasting service could also form creative and productive links with similar services in other small countries with similar social values and traditions – for instance Nordic countries, Canada, New Zealand, and island communities. Such initiatives would unlikely to be given priority within the current structure of the BBC.
4. The potential disadvantages to Scotland and the UK as a whole (and/or its constituent nations) of devolving these powers to the Scottish Parliament
There would be a risk that the reduced funding received by the BBC would compromise its capacity to make high quality programmes. However, the cut in overall funding of 9% (equivalent to the Scottish proportion of the overall UK population) is not dissimilar to recent cuts in BBC departmental funding arising from other factors, and should be manageable.
5. The extent to which the advantages outweigh the disadvantages
The short-term transition costs of this proposal would be outweighed by longer-term gains, as each part of the UK developed broadcasting services that were appropriate to their particular goals and values.
6. The interdependencies between this proposal and other key issues
Minimal.
7. Practical or legal barriers or difficulties to implementing the proposal
None.
8. The financial advantages or costs involved in implementing the proposal
There would be transition costs, but these would not be substantial.

Proposal to devolve all tax-raising and spending authority to the Scottish Parliament (submission to the Smith Commission)

1. The principles underpinning this proposal
This proposal is informed by two main considerations. First, it is consistent with the goal of reinforcing democratic accountability for the governance of Scotland. It is only when decisions around taxation and economic policy are made close to the people of Scotland, and in consultation with groups and organisations in Scotland, that the creative and productive potential of the Scottish population will be fully released, in ways that reflect national values and collective choices. Second, this proposal is intended as a means of ensuring the coherence of decision-making in Scotland. At the present time, some powers within this category are devolved, while others are retained to the London parliament.
2. Assessment of the current situation
At the present time, some of these decisions are made in London, while other decisions are made in Edinburgh. The Scottish government, over the past few years, has shown itself to be able to make budgetary decisions in a mature and considered manner, that has received broad support from across the population. The clear preferences of the majority of the Scottish people, in relation to taxation and spending, are different from those expressed in other parts of the UK. The current situation is therefore unstable and likely to inhibit the kind of consensual long-term planning that is necessary for the achievement of equality and prosperity.
3. The potential advantages to Scotland and the UK as a whole (and/or its constituent nations) of devolving these powers to the Scottish Parliament
There are many constructive ideas circulating within Scottish society at the present time, regarding tangible ways in which the tax system, and spending patterns, could be altered in order to achieve equality and prosperity. Devolving these powers would therefore have considerable benefits to Scotland. The proposal would also enhance collaboration and harmony and other parts of the UK, because it would become clear to citizens in other parts of the UK that Scotland was not receiving hidden subsidies. The proposal would enable other parts of the UK to pursue micro-economic policies that were suitable to their local conditions.
4. The potential disadvantages to Scotland and the UK as a whole (and/or its constituent nations) of devolving these powers to the Scottish Parliament
There main risk would be if Scotland and the rest of the UK were to develop divergent policies that resulted in destructive competition or possibilities for fraud. Effective means of cross-legislature co-ordination would need to be in place (see paragraph 7 below).
5. The extent to which the advantages outweigh the disadvantages
The short-term transition costs of these changes would be outweighed by longer-term gains, as each part of the UK developed policies that were appropriate to their particular goals and values, and enabled their specific areas of growth potential to be fulfilled.
6. The interdependencies between this proposal and other key issues
This proposal refers to the widest possible range of powers – only foreign and defence policy, and macro-economic policy would be excluded. The Scottish Parliament would have control of welfare and social services provision, oil and other energy revenues, and broadcasting.
7. Practical or legal barriers or difficulties to implementing the proposal
There would not be any legal barriers, since these powers are all currently under the control of the UK parliament, who can pass new laws as necessary. There would need to be a sufficient level of alignment between the taxation and spending policies of Scotland and the rest of the UK. This would require the establishment of a formal mechanism, perhaps similar in some respects to the inter-governmental mechanisms within the Eurozone, which involve regular meetings at Finance Minister and senior civil service level, and peer review of budgets. There would also need to be some Scottish representation on the Bank of England monetary policy committee. Each of these measures would have the advantage of increasing transparency and public engagement in relation to policy-making in the UK as a whole.
8. The financial advantages or costs involved in implementing the proposal
There would be transition costs. At the present time it is not possible to determine what these costs would be. However, the question of the level of transition costs did not emerge during the 2014 referendum as a major issue.

Asking Smith

My apologies to those who have been following this blog. I have not written anything for at least three weeks. Mainly this has been to do with demands of the day job. But also, like many people I suppose, I have had a difficult time coming to terms with the loss. I keep coming back to the idea that we could be living in different times, and have a different type of energy, if the vote had gone the other way.

I have found a focus for myself in composing submissions to the Smith Commission. The first of these is in the following blog post. Writing it was an odd experience. I tried to keep to the guidelines that were laid out by the Commission. Whatever I send in will be ignored anyway, but at least I won’t give them the excuse that it can be dismissed because it does not confirm to the guidelines. As you can see, I kept it quite short, and restricted myself to getting the main points across. Partly this was because any attempt to fulfil their guidelines in detail would have required an immense amount of documentation and detail. I am assuming that they don’t want that, because there is no indication that they are intending to employ expert assessors to evaluate the credibility of technical arguments and evidence.

Actually, writing that Smith Commission proposal made me feel sick. I had this underlying sense of being a little boy asking for something from elders and betters. Its not really a dialogue. There was a sense of buying a lottery ticket. I never buy lottery tickets.

I need to keep going with this project and see how I feel after I have got into my stride. Its not much, but at least if the Smith Commission receives thousands of serious submissions from ordinary citizens, that in itself is saying something.

Learning from the psychology of voter decision-making

As a psychologist and counsellor/psychotherapist, I realise that I have a tendency to make sense of political issues, such as the Scottish independence debate, in psychological terms. I am not sure that this is always a helpful thing to do. But its part of me, so I need to make the best of it.

Following the referendum outcome, I have been thinking about two theories of political psychology that come from the USA.

The first is Bill Clinton’s famous slogan: “it’s the economy, stupid”. Clinton was one of the political geniuses of the modern era, a hugely intelligent and widely-read man. The story goes that “it’s the economy, stupid” signs were erected on the walls of all of his campaign offices, to remind staff that what mattered most to voters was their sense of economic security. The result of the Scottish referendum confirm Clinton’s theory. It would appear that, in the end, the decision hinged on the belief of many voters, particularly older people on pensions, that independence would make them worse off.

“It’s the economy, stupid” is essentially a psychological theory, because it predicts motivation and decision-making. If you ask people, they might say that their referendum vote was based on many factors – identity, equality, nuclear weapons, belief in politicians, and so on. The Clinton theory suggests that, while all of these factors play some part, the key underlying driver of voter behaviour is economic self-interest.

The other political-psychological theory from the USA is described in The Political Brain The Role Of Emotion In Deciding The Fate Of The Nation by Drew Westen (link to further information about this book is given below). Westen is a clinical psychologist, who has made major contributions to research and practice in counselling and psychotherapy. He is also an active supporter of the Democrat party, who was frustrated about the electoral success and popularity of Republicans such as Reagan and the Bushes.

In his book, Westen presents evidence from two main sources – experimental studies that he has carried out in his lab, on the decision-making processes of voters, and detailed analyses of effective and ineffective media campaigns run by presidential candidates in the USA. The findings of these studies are interpreted in relation to models of brain functioning.

The gist of Westen’s theory is that the decisions that people make on how to vote are primarily based on their emotional response to candidates and the media communications (e.g., TV performances and ads) of candidates. Westen argues that, in relation to big political choices, there is too much competing and conflicting information around to make it possible to arrive at a decision on rational, cognitive grounds. Instead, individuals rely on their emotional gut-feeling, using brain mechanisms that cut through cognitive complexity and simplify the choice.

I read Westen’s book toward the start of the referendum period, and did not believe that it would apply to Scotland. I thought that what he was writing about was only relevant to the kind of polarized, media-dominated, consumerist political system that exists in the USA. How wrong I was. It is easy to see, in hindsight, that referendum choices were all about emotion. Many of those who voted no would appear to have done so because of fear. (Westen’s book includes many powerful examples of how fear – of black people, of terrorists – has been used effectively in American elections). On the other side, recent pro-independence blogs have been full of stories about how emotionally involved yes voters have been in the referendum, and how emotionally devastated we were when the result was announced.

It is clear that the campaign to achieve an independent Scotland will continue. I think that is important for the campaign to give serious consideration to the psychology of voters’ decision-making. It seems clear that the Better Together campaign made use of these ideas. However, they did so in a cynical, manipulative and disrespectful way. That approach to using psychological insights would not be consistent with the values and aspirations of those of us who want to see a different kind of society, and different kind of political system, in a new Scotland. We need to learn how to take account of the emotional psychology of self-interest, so we can harness that energy in a positive way. We also need to learn how to counter the psychological tactics adopted by the mainstream political parties.

http://www.amazon.co.uk/Political-Brain-Emotion-Deciding-Nation/dp/1586485733/ref=sr_1_1?s=books&ie=UTF8&qid=1411281564&sr=1-1&keywords=drew+westen

The paradox of the Labour attitude to Scottish independence

There is a fundamental paradox or contradiction at the heart of the stance toward independence taken by the Scottish branch of the UK Labour Party. This is a party that espouses equality. An independent Scotland would provide it with a population with a permanent left-of-centre majority. A place where all of Labour’s policy aspirations and ideas could come to fruition. A place where there would not be a constant battle to justify social democratic policies in the face of a right-leaning press. A place with sufficient financial, natural and human resources to turn their vision into reality.

Yet, from the outset, they turned their face against this opportunity. That is the paradox.

Why did they make this choice? The massive anger toward the Scottish regional branch of the Labour Party, that has emerged since the referendum result, seems to be based on two explanations. There is a view that the party in Scotland has lost sight of, and lost touch with Scotland – it is dominated by their leaders at Westminster, and by the need to position itself to be electable in England. This is the ‘taken for granted’ explanation. A second perspective is that those who run Labour have gone over to the dark side, and have been seduced by money, power and the hope of a seat in the House of Lords. This is the ‘noses in the trough’ explanation.

No doubt these explanations have some validity. However, impugning the motives of opponents is never entirely satisfactory, as political analysis.

I would like to try to go deeper.

I have been interested what things were like in British society in the 1950s (the world I was born into). What is clear from historical accounts of that era, is just how closely involved the Labour party was in running things – transport, mining, manufacturing, energy, media… Huge parts of the British economy were nationalised, and government ministers had direct responsibility for practical decision-making. Even a decade later, I can recall my first direct memories and interest in politics being stimulated by reading about the frequent need for ministers in the Wilson government to intervene in union-management disputes.

All this changed, and was swept away. The nationalised industries were sold off. Labour politicians ceased to be people with any experience or interest in practical decision-making. By the time of the Blair government, central government politics had been reduced to two things: (a) broad-brush policies that would be implemented through budgets and legislation, and (b) management of the media (spinning). This is the political world in which the leaders of the Scottish Regional Branch of the UK Labour Party have learned to operate. It is a world in which politicians function within a bubble, separate from the population as a whole.

But this approach is not what is needed in Scotland. Making things happen by sitting in a government office pulling the levers of power won’t cut it in a small country with a political system designed to make sure that parties work together for the common good. It won’t cut it, in fact, in any modern democracy with an educated population that has access to the internet. The deep metaphor for politics now is not Fat Controller. Instead, it is Borgen, it is ecology, it is flexible, creative problem-solving, it is politicians that you can bump into in the supermarket because they are part of your community.

I believe that this is why Labour Scotlandshire turned their faces against the golden opportunity of a leadership role in a freshly-minted social democratic political playground. They wouldn’t know what to do with it. They don’t understand how to make things happen any more. They would be found out.

Look at them – Lamont, Brown, Alexander – none of them seem capable of listening to other people, of working with people who they don’t control, of engaging in dialogue, of sorting things out in creative ways.

A call for a national dialogue to build a consensus before a referendum

What we have just been through, the 2014 Scottish independence referendum, was similar to a general election campaign. Each side laid out its position (as with an election manifesto) and argued their case before the electorate.

The ‘campaign’ model works – sort of – in terms of electing representatives to a parliament, within a party system. This is a form of democracy in which a set of people (a party) is elected to do the job of governing for a fixed period of time. After that period of time, the people have their chance to give their verdict.

This model is not ideal in terms of deciding on whether a country should become independent. For any individual voter (or orgamisation with a stake in the decision) there are a large number of inter-connected issues that may be relevant to them. In the 2014 referendum, these issues could only be debated within the context of the specific proposals (in effect a manifesto) laid out in the Scottish Government White Paper. In the end, the choice was to take it or leave it. The quality of the discussion that took place was also hugely constrained by the way that the British media operates – reducing complex issues to soundbites.

My suggestion is that it would be better to have a dialogue that leads to a consensus, which is then formally verified in a referendum. A national dialogue would need to continue until a point at which a set of agreed positions is arrived at, that are supported by a clear majority of the people. The referendum then becomes the legal confirmation of this consensus, which legitimises the government to declare independence and join the EU, UN, etc as a nation.

What would this process look like? It would be necessary to identify a set of questions that would need to be resolved, and initiate consultations and meetings on each of them. One of these questions would undoubtedly be ‘What currency will we use?’ Prior to the 2014 referendum, the Scottish government fiscal commission had clearly done a lot of work on this. But what then became clear that their arguments were not inclusive enough, and that further considerations needed to be taken into account. For example, during the referendum, various banks and businesses came out against the yes campaign position. But there was never any opportunity for them to explain their needs and preferences in detail, and for some kind of compromise or new position to be hammered out.

Another question that would be part of a national dialogue would be ‘How will health care be organised and funded?’ My guess would be that a consensus on this question would not be hard to achieve, but that the process of holding an open discussion on this topic would be interesting and worthwhile.

There are many other questions that would need to be explored within a genuine and inclusive national dialogue. The work of Amartya Sen, Martha Nussbaum and others, around basic human ‘capabilities’ (the pre-requisites for a satisfying and productive life) offer a starting point for thinking about the areas that would need to be addressed.

Some further thoughts:
1. It would be a mistake to define a national dialogue as merely a precursor to a further independence referendum. If done properly, a national dialogue should connect up with existing policy and citizen forums, and should generate ideas that feed into the on-going, routine political and administrative process.
2. It would be best to wait until sufficient consensus has emerged, before holding a referendum. In our society, the act of voting seems to bring dialogue to a halt, and inhibits people’s capacity to listen to each other.
3. Voters would have a chance to learn about issues over a period of time. The opportunity to be involved in dialogue will help to deepen everyone’s understanding of issues.
4. The dialogue would be largely taken out of the arena of the BBC and mainstream press, which at the present time are corrupt and not fit for purpose. Obviously, a national dialogue would have a strong presence on the internet. However, it would be wonderful if there could be a freeview TV channel that just broadcast discussions between people, and video blogs, relating to the national dialogue. This would be a new kind of reality TV. Raw, immediate and unpredictable – but meaningful.
5. When the time comes to vote, the act of deciding takes on a different significance. If the national dialogue has been effective, then each person should be able to identify maybe three or four key questions that are particularly important to them, and then be able to work out their own balance sheet.
6. Who will make this happen? I suggest that the universities of Scotland should be charged with collective responsibility for organising and facilitating a national dialogue. Universities have good meeting facilities, which are accessible to the population as a whole. They have outstanding skills in relation to on-line broadcasting and hosting, and publishing. Universities also comprise a repository of scientific and cultural knowledge that we need in order to make good decisions. In the 2014 referendum, the universities were largely silenced, because of the fear of being seen to take sides. A national dialogue would allow this major national asset to play a lead role in the renewal of our society.

Friday 19th September 2014. The betrayal

There have always been good reasons for voting yes in the independence referendum, and for voting no. Personally, I wanted it to be a yes, but at the same time I was not at all confident that a majority of people in Scotland would make that choice. There are plenty of people who just want to be British, or who believed that would have had too much to lose, financially, in an independent Scotland. There are lots of angles on all of that, which will no doubt be dissected and discussed at length over the next few weeks.

But what I woke up with this morning, was the concept of betrayal.

I am not using betrayal in a loose sense, or as a casual emotive metaphor. I am talking about a literal, precise definition of the meaning of betrayal. An act of betrayal occurs when a person has the trust of others, knows that this trust has been invested in them, and then lies to these other people for the purpose of furthering their own narrow self-interest.

In the fullness of time, it will become apparent that some contributors to the referendum debate will turn out have been ill-informed, deluded, or quite simply wrong in their analysis and arguments. These politicians and commentators cannot be accused of betrayal, because their statements were made in good faith. Betrayal is different from this. Betrayal is a conscious act of bad faith.

I believe that the Scottish people have been betrayed by the leaders of the Labour Party. I am sure that there were many occasions in the referendum when the leaders of the Labour Party made statements that were ill-informed or exaggerated. That is regrettable, but it is not betrayal. There exists clear evidence of betrayal, in the form of the ‘vow’ that was published on the front page of the Daily Record (the newspaper with the widest Labour readership in Scotland) on 16th September. This document stated that ‘extensive new powers would be delivered to Scotland’, following a no vote, in accordance with a tight timetable.

The ‘vow’ is signed by Ed Milliband, David Cameron and Nick Clegg. It seems reasonable to assume that other leading members of the Labour Party in Scotland were closely involved in formulating this statement: Gordon Brown, Alistair Darling, Douglas Alexander and Johann Lamont.

We can disregard David Cameron and Nick Clegg. Few people in Scotland would invest much trust in anything they said or wrote. But in Scotland there remains a powerful reservoir of trust in the Labour Party. Historically, the Labour Party has stood up for the working people of Scotland for 100 years. Gordon Brown was a leading figure in radical socialist politics in the 1960s, and in the renewal of Labour as a party of power (and hope) in the 1990s. Even among people who do not vote Labour, there is an underlying sense that the party is on the side of social justice, fairness, solidarity and equality – key values within Scottish culture.

So, these people, under the signature of Ed Milliband, solemnly and formally stated that substantial new powers would accrue to Scotland following a no vote.

This was a betrayal.

It was a betrayal because (a) they knew that what they were saying was not true; (b) they understood the trust that people had invested in them, and (c) they acted in their own self-interest (to save or serve their careers).

They knew that the promises in the vow could not be delivered. These are people who have spent a lifetime in Westminster politics. They knew what would need to be done to pass such legislation. They knew that there was not enough parliamentary time to get this through before the 2015 general election. They knew that there was not a parliamentary majority that would support and enact their proposals. They knew that, within the timescale, there was no possible mechanism for ensuring what was being proposed was supported by the Scottish electorate, or that the people of Scotland would have any meaningful input to the process of working out the details of the package.

All of these things, they knew. But the most important of all was that they knew that what they were saying would never be approved by the Westminster Parliament. It was a deliberate, calculated, non-trivial, act of deception.

The ‘vow’ could never have been published without the explicit support of the leaders of the Labour Party. Eventually, we will find out who else in the Labour party, outside the inner circle, was consulted, or objected to what was being done.

I call on these individuals to speak up.

I call on the rest of us not to forget this act of betrayal, and the many other betrayals that lie behind it and are associated with it. When these people appear at local meetings, on TV debates, in newspapers, asking for our support in the next general election and Scottish parliament election, let us remind them of their solemn vow. Let us ask them how they could say such things, in the full knowledge that they were not true. Let us ask them what it is like, as a person, to operate from such a depth of utter cynicism and disrespect for others.

I wondered why I felt so bad this morning. It was more than disappointment. Disappointment is when you take part in a fair contest and don’t win. It was more than powerless and frustration at the power of the mainstream media and the state. It was more than the wish and regret that I had not done more and worked harder to promote my beliefs. It was more than deep sadness – all the great things we could have done in the making of a new country.

As well as all these things, it was anger. Betrayal, trust lost, is never forgotten. Betrayal divides people in ways that take a very long time to heal, and may never heal. Betrayal makes it harder to trust again. The one who betrays is left with an awareness, inside, of being false and empty.

But this is the world that we live in. We are spoiling the world of nature. We casually poison that world with our waste. So much of the referendum was about creating and nurturing – learning how to talk to each other about the society we want to build for ourselves and for future generations. That kind of conversation sustains the many points of connection between us, no matter which political positions we espouse. Acts of betrayal spoil our cultural world, poison our relationships.

Back to basics

As we enter the last weekend before the referendum vote, it is a good time to remember what this choice is all about. The media are increasingly filled with ‘point-scoring’ arguments from both sides. The issues that are being brought up (such as the currency, the future of the NHS, and so on) are vitally important. But the way that they are being discussed is in the form of brief soundbites and avoidance of real dialogue. For example, leading political figures such as David Cameron and Gordon Brown tell us their version of things, but are unwilling to respond to questions or to publish their ideas in a form that can allow critical scrutiny.

In all this last-minute frenzy, it is perhaps useful to get back to basics. A powerful, coherent and detailed case for an independent Scotland has been made. Listed below are the key documents. These are not last minute, hurriedly assembled proposals. Instead, they are carefully argued, and provide references to sources of evidence.

The White Paper (Scotland’s Future). This was produced by the Scottish government several months ago. It is a long document – but then, it is discussing all aspects of Scottish society.

http://www.scotland.gov.uk/Publications/2013/11/9348/0

The Wee Blue Book. Produced by the Wings over Scotland team – an easy to read, shorter account of topics covered in the White Paper, along with responses to subsequent criticisms of the case for independence that have been made in the mainstream media.

http://wingsoverscotland.com/weebluebook/

Draft constitution. This is a remarkable document, which has received rather little attention. It proposes a set of rights and responsibilities of people and government in an independent Scotland, and invites everyone to be involved in a consultation process that will take place following a yes vote.

Click to access 00452762.pdf

Fiscal Commission. An authoritative and detailed discussion of the options for Scotland, in relation to currency and other aspects of economic policy.

http://www.scotland.gov.uk/Topics/Economy/Council-Economic-Advisers/FCWG

Wings over Scotland document archive. A repository of documents on various aspects of the independence debate. Includes some items that were published on Wings, along with key reports and documents from a wide range of organisations.

http://wingsoverscotland.com/reference/

Some awkward questions for London on currency union

The question of the currency that would be used by an independent Scotland has received a great deal of attention in the referendum debate. There are some questions about this issue that seem to me to be quite important, but do not seem to have been discussed.

1. If Scotland votes for independence, and negotiations begin, what currency arrangement would the Westminster parties suggest would be best? They are saying, at the moment, that this would definitely not be the pound. Do they want Scotland to have its own new currency, which would mean transaction costs for rUK companies trading with Scotland? If Scotland had its own currency, what do they suggest should happen around the division of the assets and liabilities of Bank of England?

2. What would currency union look like, and how would it work? It is interesting to consider the currency union arrangements in the Eurozone. The differing economic needs of the various countries are handled in three ways: (a) meetings between all the heads of national banks; (b) meetings of the finance ministers; (c) the budget plans of each country is subjected to peer review from other countries, in advance of being submitted to its own parliament. All of this seems fairly sensible. It has obviously been a struggle to make it work, because there are a lot of countries, and some of them (e.g., Germany and Greece) have very different economic needs and conditions. But it has held together for several years, has weathered a major economic storm, and appears to be leading to improved performance in some countries (e.g., recent recoveries in Ireland and Portugal). What is fascinating, is to reflect on why a similar arrangement does not exist at the moment in the UK, with regional (English regions, NI, Wales and Scotland) representation on the Bank of England monetary policy committee. The members of this committee are listed on the BofE website. They have no regional allegiances or experience, as far as I can see. This means that the stewardship of the UK currency, the pound sterling, does not operate in a fashion that allows for transparent consideration of regional differences.

3. Why wouldn’t a sterling zone currency union work? I cannot see that this has been explained. It has been loudly asserted by George Osborne, Ed Balls and many others that it would not work. On the other hand, the governor of the Bank of England, Mark Carney, has always said that he could make it work, if the politicians wanted it to work. The Eurozone currency union works, in a much more challenging situation where there are huge differences between national economies. In contrast the differences between the Scottish and rUK economies are minor. So what would make it impossible, or so undesirable that it is worth the costs associated with other arrangements? Having thought about this, I wonder if resistance to a currency is fundamentally about rUK sovereignty, and not wanting anyone else to have a ‘say’ in how the economy is run. In Scotland, I believe that all (or certainly most) of the budgets presented by John Swinney have been negotiated with other parties and agreed by the whole parliament. We have shown that we can live with that kind of open process. But maybe it is something that is not yet imaginable for the Westminster establishment.

The economic future of an independent Scotland

The possibilities for the economy of Scottish, following independence, have been widely debated. At the start of the referendum debate, Scotland was characterised as a ‘subsidy junky’ that required rUK funding in order to pay for its health, education and social services. This has been shown to be not the case, for example in the Wee Blue Book published by Wings over Scotland.

It seems clear that there are different currency options, each of which has pros and cons. There continues to be a lot of argument over whether there will be a currency union between Scotland and the rUK. It seems clear that we will not know, until the day comes when a proper grown-up negotiation occurs between the two governments, whether a deal can be reached around a currency union between Scotland and rUK. What is also clear is that there are dozens of small countries that have managed to arrive at currency arrangements that are appropriate to their circumstances and needs – why should Scotland be any different?

If we accept that a currency solution will be achieved, and that the tax take of Scotland is broadly sufficient to cover current outgoings, then where does that leave us? What might the future look like?

I am not an economist. I am not sure that economists are the best people to ask, when it comes to thinking about the economic future of Scotland, because that future will be shaped by choices that are not economic, but reflect values and a capacity for innovation and creativity.

I believe, and hope, that in a future Scotland, money and economic decision making will be harnessed to the task of building a better society. In other words, the key indicator of the ‘wealth of the nation’ should not be Gross Domestic Product (GDP – the amount of money churning around the system), but instead is the extent to which people are able to live productive, meaningful and enjoyable lives.

From that starting point, here is what I anticipate will happen:

1. It will take a couple of years post-independence for things to settle down. Some businesses will leave Scotland and others will come in. It will take time before the different economic policy direction of an independent Scottish government starts to have a positive effect.
2. In terms of things that people want, that have international marketable value, Scotland is in an extremely strong position. We have food, land, water, energy, knowledge, manufacturing and tourism. We have a cohesive set of cultural values, which means that we are capable of long-term planning, and are unlikely to do anything that is ideologically-driven and self-destructive. What all this means is that we have the basis for a strong and prosperous economic future. Of, it is up to us to make the most of these resources.
3. If you look at that list (food, land….) then the benefit of independence is that we are able to figure out, year on year, how to do a little bit better in each of these areas. This seems a realistic aim, if there is a government in Edinburgh that is able to focus solely on this task and has a wide enough range of powers to make a difference. In one of the televised debates, a member of the audience famously asked ‘why are we not better together already?’ Anyone who is closely involved in any key area of the Scottish economy knows full well that we are not operating at capacity – we can do better.
4. There is consensus across all the main political parties in Scotland that we should create a society that is fairer and more equal. Within the referendum, the concept of equality has been discussed as though it means ‘spending more money on benefits’. This is a major misunderstanding. Equality is an economic powerhouse. Equality means that the gap between richer and poorer is less. Essentially, poorer people spend their income in the everyday economy, because there is no surplus that they can save. By contrast, rich people have big surpluses, which are siphoned out of the everyday economy into offshore accounts and the like. Also, a society that is committed to equality does not allow tax avoidance on the part of rich individuals, families and companies – everyone pays their share. This is an economic driver because it allows tax rates to be kept competitive, and creates money that the government can invest in infrastructure. Equality saves money, by preventing people from developing mental health problems caused by despair and invidious comparison, and long-term illnesses caused by unhealthy lifestyles associated with poor living environments. Equality contributes to a population of people who are confident enough to engage successfully in wealth-creating enterprises.
5. An independent Scotland will stop wasting money. We will stop wasting money on military hardware and adventures. All is needed is to be willing to take our place as a middle-of-the-road EU/NATO country, with no pretentions to being a major world power. We will stop wasting money on privatised schemes for running schools, hospitals and welfare services – all the channels through which public money gets diverted into profit for multinational companies. This is not about losing defence industry jobs at Faslane and elsewhere. These jobs come from tax receipts. The same money could make many more jobs, that create better futures, if spent in a different way.
6. More talented people living and working in Scotland means new ideas, new enterprises, healthy competition. Why will this happen? Young people still leave Scotland, to get jobs elsewhere. Young people from around the world, who attend Scottish universities, currently find it very hard to stay on after they have completed their degrees. If even a small proportion of these people choose to, or are allowed to, remain in an independent Scotland, there are potential economic benefits. These are the kind of people who build new industries. The scare story that there would be a ‘brain drain’ of talent out of Scottish universities, following independence, needs to be seen in context. The highest level of academic talent operates somewhat like the international market in footballers and football managers. The major universities in Europe, North America and Asia are willing to invest large sums in attracting star researchers. So, there will always be stories about professors who left Scotland because they were promised better lab facilities in Oxford, or MIT, and so on. It is important to realise that there are also plenty of examples of academic talent moving into Scotland. What is important is the university infrastructure that supports good work, and is attractive to those who can do good work. The leading Scottish universities are serious players in the international premier league. The current Scottish government seems well aware of the significance of the university sector to the Scottish economy and society. It is very hard to imagine any future Scottish government that would do anything to undermine this asset.
7. It has been argued that the ‘volatility’ of oil revenues would be a significant problem for the economy of an independent Scotland, because tax receipts from this source could go up and down from one year to the next. I suggest that a few moments of reflection will show that this issue has been hugely exaggerated. Fluctuations in oil revenues are dealt with by planning and by creating an oil fund. You add to the oil fund in good times, and draw it down when revenue is low. This seems like a fairly straightforward thing to do. It is not that long ago that Gordon Brown, as Chancellor, was introducing ‘windfall taxes’ on banks, insurance companies and oil companies. In effect, that was the equivalent of an oil fund, but not implemented in a rational, agreed manner. Another thing about ‘volatility’ is that every revenue stream ever invented is both cyclical (ups and downs over long periods) as well as being prone to unpredictable short-term variations. For example, ice cream manufacturers need to plan for the weather because if it rains all summer they are at risk of going broke. In recent history, the most volatile revenue stream has consisted of tax receipts from the banking industry. I can remember the time, before the crash, when the Royal Bank of Scotland was making unimaginable levels of profit (by the way – what happened to that money…?) and building a corporate campus and palace at Gogarburn, just outside Edinburgh. Just a short time later, massive public funds needed to be poured into the bank, to keep it viable. That’s what I call volatility.

That’s enough for one blog post. There is a lot more that could be said about the everyday life economy of an independent Scotland. Maybe another day.