The author is the first minister of Scotland
During the 2014 Scottish referendum, Scots were told that if we voted against independence, we could count on the stability of Westminster’s economic management.
This stable message, built on Britain’s alleged economic strength, of which EU membership is a key part, dominates the message of anti-independence politicians. However, even then, Britain had already displayed its defining economic characteristics – low growth, low productivity and high inequality.
Thanks to the disastrous decision to leave the EU – against the wishes of the vast majority of Scotland – this inherently fragile and precarious economic model now appears to be tied to the UK’s future.
The Bank of England has warned that Britain is on the verge of entering its longest recession since the 1930s, and its analysis has made it clear that certain “British factors” are making things worse. One of them is undoubtedly Brexit. However, despite mounting evidence it is causing harm, none of the UK’s major parties has called for a reversal. In fact, Labour leader Kirsten Starmer is now aligned with the UK government on the issue. Labour has become a pro-Brexit party and has a pro-Brexit leader.
This just confirms what has been obvious for some time: the only way for Scotland to regain EU membership and the economic benefits it brings is as an independent country. Scotland’s support for EU membership has continued to climb since 2016. In fact, it seems to be on the rise in the UK now. As a result, Labour’s plot to remain silent on Brexit will not only wreak havoc on the economy, but by the time the next general election arrives, it could prove to be a profound strategic mistake.
Chancellor of the Exchequer Jeremy Hunt will deliver his autumn statement this week, just under these dark clouds of Brexit. Given that he has already warned about the “eye-popping” decision, we can be sure that big cuts in public spending, as well as big tax increases, are on the horizon. Much has been talked about the need to fill a so-called ‘black hole’ in UK public finances, possibly £40bn to £55bn – figures made worse by bad political decisions and based on uncertainty about the future predict. How to reduce debt as a percentage of GDP.
It is also important to remember that any further cuts will come as public services are still recovering from the last period of austerity and Covid-19, and they are grappling with the impact of inflation. For example, the Scottish government’s budget is £1.7bn less than it was set in December due to inflation, but we have yet to receive a cent from the UK government.
Fiscal sustainability is of course essential, but hitting public services with a new wave of austerity could prolong the recession and make long-term sustainability harder to achieve. When Brexit and the Home Secretary’s zeal to reduce immigration add up, any growth prospects look even bleaker.
It is against this backdrop that the Scottish government is updating its economic case for independence. We’ve laid out how an independent Scotland can thrive under a new economic model, based on our rich renewable energy resources, a new approach to social partnership, greater workplace rights, immigration tailored to our needs policy and membership of the European Union. In its own right, within a huge single market that is seven times the size of the UK by population.
We have set up a £20bn investment fund plan to start growth in a newly independent country using the remaining borrowing capacity and oil revenues during our transition from fossil fuels.
There is no guarantee of success. But it is instructive that independent European countries comparable to Scotland, such as Northern Europe, Ireland, Austria and Switzerland, have higher per capita national income and lower inequality than the UK.
Of course, we will face and address major transition issues, and we have made proposals that will move the UK from a low-growth, highly unequal economic model to a better independent future.
We don’t know the details of Thursday’s Prime Minister’s statement, but one thing has become clear – Scottish independence is not only desirable, it is now necessary to build a more prosperous and equitable future.