The economic case for Scottish independence has collapsed completely
The Tories should more aggressively point out the growing flaws in the SNP’s arguments
The fantasies on which the idea of Scottish independence are based were highlighted last week when David Lockwood, chief executive of the engineering firm Babcock, suggested his company would move its fabrication yard facilities from Rosyth to England if made to feel unwelcome in an independent Scotland. His observation brought obloquy from Nationalists. They argued that a Scottish government would never make Babcock unwelcome; and that because of the money it makes in Scotland, it would disoblige its shareholders by leaving.
Yet Babcock, which bought Rosyth from the Ministry of Defence in 1996, has said that its single biggest customer is the UK Government. Its main Scottish business consists of building five Type 31 frigates for the Royal Navy, which Mr Lockwood said could be moved to England within three years, and decommissioning the Dounreay nuclear plant. Babcock has created 500 Scottish jobs on the Type 31 project. The latest figures show the MoD spent £1.99 billion of taxpayers’ money in Scotland in 2020-21: equivalent to £360 per person, compared with a spend of £310 per person in England. There is no reason why such largesse should continue after independence.
And a Scotland that suffered economically after independence would need to raise taxes, driving businesses out of the country. It would drive out economically productive individuals, too, leaving a tax base comprised of those used to being net recipients of state funds rather than contributors to them. In 2021-22, Scotland received £38 billion under the Barnett formula: or around £129 per head of spending in Scotland for every £100 per head spent in England. In 2020-21 (the last year for which figures are available), the Scots paid 7.9 per cent of UK tax but received 9.1 per cent of UK spending.
Many Nationalists don’t like to admit these facts. Instead, they concoct stories about Scottish economic strength. One doing the rounds a few months ago was that Scotland raises £25 billion per year in taxation: in fact, in 2020/21 it contributed £13 billion to the UK Treasury. Another was the claim that £20 billion is raised annually from the Scotch whisky industry: yet the Scotch Whisky Association claims the whole industry contributes at most £5.5 billion in gross value added.
For the SNP, the 2014 referendum campaign was embarrassing enough. It did not know what currency Scotland would use if it left the UK. Its assumption Scotland would be admitted to the EU took no account of Spain’s hostility on the question, because of sensitivities over Catalonia. Above all, it could not say where the revenues would come from to replace the subsidies from London that the SNP pretends Scotland doesn’t receive.
But now, that already dire economic case has collapsed completely. An SNP administration, in bed with Greens even further Left than it is, has saddled Scotland with an unaffordable net zero policy. Oil is not only running out but, in the medium term, is likely to experience reduced demand. The SNP continues to pretend that Brexit hasn’t happened and therefore fails to encourage the new commercial opportunities arising from it. And managing future liabilities outside the Union, such as the pensions bill or a public health service and possible furlough scheme during a further pandemic, seems something beyond the SNP’s imagination.
As the party of the Union, the Tories must start making these arguments, rather than allow businesses such as Babcock to make the case instead. So far, the SNP’s assertions have gone by default, the Government seeming reluctant to demolish the propaganda of Nicola Sturgeon and her supporters in case the consequent embarrassment for the Nationalists provokes their outrage and anger. But that is precisely, and aggressively, what the party of the Union should do. If it waits for another referendum to mount this charge it will be far too late.