Wings Over Scotland

The core claim of the No campaign, or “Better Together” as it prefers to be called, is that Scotland is economically, politically and socially stronger as a partner within the United Kingdom. This status is defined, according to the campaign’s website, by three key factors: Prosperity, Security and Interdependence.

Each deserves scrutiny, but for now let’s focus on the first one, with reference to Alistair Darling’s recent speech at the John P. Mackintosh lecture. This was the claim that Darling made on trade and business:

“Scotland is far better represented abroad as part of the UK than we could ever hope to be as a separate state. The nationalists tell you that the UK embassies and consulates do not represent Scots. Try telling that to Scots who find themselves in trouble in a far-flung part of the world and can rely on the UK embassy to help them out. To the businesses seeking trade. They open doors for our people and businesses across the globe.

Farmers, fishermen and women, businesses big and small all reap the benefits of the UK’s global reach and global influence. Losing this influence would be a massive loss. It would be impossible to replicate it on a smaller scale.”

I’ve worked in 27 countries around the world in all six inhabited continents, so I think it’s fair to call myself a global businessman. I’m operating in a medium-sized company, but in 11 years of travel I cannot bring to mind a single case where association with Britain has differentiated our business.

Darling’s claim is dubious on at least two counts:

1. There are actual measures for countries for the amount of global business that the countries perform in the modern world.  Interestingly, a major development in the modern globalised world is that businesses from small countries have equivalent access to the global market that was previously dominated by global superpowers (a net effect of this being reduced influence for the UK, as demonstrated by the deconstruction of the Empire).

In the modern world, the list of countries with the most global trade per capita is dominated by relatively small nations with Germany being the only country in the top 20 with a population of over 15 million. The UK actually appears at 36th on this list, one place behind Gabon – an African country with a population of 1.5 million, making a mockery of the claim that the UK is somehow uniquely placed to enable global business. This seems conclusive evidence that it is possible for smaller countries to have as much influence as far bigger ones, and there are no barriers that would prevent Scotland from very quickly joining this list.

2. Outside of Europe the genuine perception is that Great Britain, or the UK in political terms, is England (a point I believe is exacerbated by the fact that the language ‘English’ is globally denoted by the Union Flag). The general perception is that Scotland is another European country the rest of the world hears little about, like other small European nations such as Belgium, Denmark, Sweden and Norway.

Scotland truly lives in the shadows in this sense and therefore I think any claims that we significantly benefit from association to UK embassies are spurious. In reality we’re disadvantaged against other small nations, without our own distinct representation around the world.

The No camp’s point on trade is not made exclusively in global terms – it’s often claimed that the large volume of trade we have with England negates the case for Scottish independence. Here’s Darling again:

“We trade more with England than we do with all other countries in the world combined.  We export £45 billion worth of goods and services – 40% of our total output – to the rest of the UK.

The UK is the world’s oldest and most successful single market.  Europe has worked for over 50 years to create a market without borders for goods and services. Why on Earth would we want to turn our biggest market into our biggest competitor?”

At a glance this sounds potentially significant but looking for comparable examples elswhere suggest it to be a red herring, with the most obvious being Canada. Canada competes with Norway on an annual basis to be crowned with the highest standard of living in the world. And much like Scotland it has a population roughly 10% the size of its neighbouring country, with which it ostensibly competes.

In fact 73.7% of Canada’s total export is to the USA, but with Canada this accounts for around 25% of their total output (an indication that the Canadians are a bit better at keeping the wealth in their own nation). Yet despite this there is no movement or appetite for Canadians to send all of their taxes and high-level policy decisions to the American government. Instead both countries worked to establish the North American Free Trade Agreement (NAFTA), to their mutual benefit.

Darling undermines his own point with his reference to the EU. It is indeed significant that Europe has been working for over 50 years to remove borders for trade. To this end the EU has in many ways superseded the political purpose of the UK, which in turn makes the UK redundant.  But in the modern world trade agreements can be set up in a variety of forms – an example of the EU’s flexibility is shown by member states Sweden, Iceland, Denmark having a trade agreement with their neighbour Norway, which is not in the EU.

(Norway, incidentally, is a country with an almost identical population to Scotland’s but with a much larger and more challenging landmass, yet their trade balance with the UK shows that it hasn’t exactly hampered them.)

So why would we want to turn our biggest market into our biggest competitor? The fact is that ticking along in the shadows of our biggest competitor is impairing our economic growth, and our social development is suffering. Despite Scotland’s great wealth we are find ourselves in a position where our businesses are struggling and our public sector lives under the threat of indefinite austerity measures as Westminster attempts to ‘balance the books’.

In the modern world a society has to be quick to react to the opportunities for economic growth – the taxes that are collected by the government have to be focused on areas that can create jobs, but also social justice for its people. The dependency on having our problems identified and fixed by a remote government is handicapping our growth and limiting our potential.

Small countries, meanwhile, are showing that they can lead the way in the modern world – I believe that reducing the scope of the UK government and bringing government closer to the people will prove beneficial for all people on the British Isles.

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The original version of this post appeared on Darling Blogs. No relation.