Rushing from the Europe session to this one with no time allowed in the schedule was another gripe I had for the organisers but, as with the earlier session, it was worth it. Chaired ably by Sir Jeremy Peat of the David Hume Institute where he has a long record of competence staying on top of debate, his panel appeared equally qualified and competent:

• Dr Angus Anderson, National Institute of Economic & Social Research
• Professor David Bell, University of Stirling
• Bill Jamieson, Executive Editor of the Scotsman
• Dr Brian Quinn Honorary Professor of Economics at Glasgow
• Jo Armstrong, Centre for Public Policy for Regions

Economics Session: (l-r): Angus Anderson; David Bell; Jo Armstrong (Jeremy Peat behind); Bill Jamieson; Brian Quinn

Angus Anderson made most of the running, kicking the debate off by arguing that any independence process be regarded as a divorce and that the focus should be on the economic viability of the two units that would be created. He argued that, since Scots started in the Union at 75% of English per capita GDP and now had parity, the Union had been no bad thing. This was underscored by the fact that, if Scotland took its population share of the UK debt of £1tn, that would mean a debt of around £100bn. At some 80% of GDP, this is well outside the EU requirement of 40% and, as a small country, it would be impossible to sell T-bonds to finance it the way the UK currently can.

David Bell, Brian Quinn and Jo Armstrong all weighed in along similar lines until Bill Jamieson and Jeremy Peat became the saving graces of what would otherwise have turned into a textbook Dismal Science Fest among economists—disagreeing only on the source and scale of disaster, but not on its certainty. They did also agree that there were four options to use as a currency:

• a currency union involving the present pound
• an informal currency union, such as some countries use the $US
• adoption of the Euro—generally seen as inevitable if Scotland stayed in the EU
• a revival of the pound Scots (or its equivalent)
• (nobody mentioned using the $US and becoming their investment hub in Europe)

However, there was less clarity as which was the preferable option, mainly because the debate seemed to keep circling around to the ill-advised nature of any Yes vote in 2014. It was not that their joint argument was that the UK was doing particularly well and that, if it ain’t broke, we shouldn’t fix it. But the leitmotif from all—despite manful attempts from Jeremy Peat to keep things balanced was that, since the UK is in a tight fiscal spot, then Scotland, with 9% of its resources would ipse facto be worse off.

Of the panel, Brian Quinn seemed the least able to deal with even the concept of an Scotland outside of the UK. Perhaps his decades at the Bank of England instilled a kind of mechanistic thinking but he clearly was unable to foresee any country being run on principles differing from the B of E. In this, he reminded me of Andrew Neil, a bright Scot whose undoubted intellect and keenness on current affairs is ill-informed when it comes to opinions that need understanding of the zeitgeist now abroad in Scotland and from which their decades of residence in London seems to have disconnected them. He agreed with Jo Armstrong that Scotland was ‘overbanked’, as if—properly run—two of the world’s major banks were a burden.

When pressed by the audience, even Angus Anderson accepted that there was no definitive international law that said the remainder of the UK would necessarily become the successor state, nor that England would therefore retain full control of assets and parcel them out (or not) as they saw fit. None of the panel managed to posit any economic future scenario for Scotland that did not involve an austerity that would worsen, the looser our purse strings to London became. Questions they posed—but made little attempt to answer—included:

• Where is it that Scotland wishes to go?
• Who would be the winners & losers if we get there?
• Would we continue to receive a Barnet Settlement?
• Which currency would it be best to use?

Delving a little into the panel’s background went a long way toward explaining the consistently glum but inconsistently confusing attitudes. In his Report on the Draft Scottish Budget, David Bell sets the tone here with:

“The 2012-13 Scottish Budget is set against a world of increasing economic uncertainty. There are significant risks of further financial collapse along the lines of 2008. This would inevitably impact significantly on the Scottish economy, increasing the likelihood of a further recession. The performance of the Scottish economy since 2008 has been weak.”

But the most suspect of all must be Jo Anderson who peppered her contributions with what seemed like attempts to out-gloom even her colleagues. But then, she has ‘form’ which was exposed in detail in a nifty blog from Joan MacAlpine of two years ago in which her objectivity (if not that of the whole CPPR) was called into question:

“Ms Armstrong was an adviser to another Labour First Minister, Jack McConnell. She is also a controversial figure with what many believe are strong ideological views in favour of liberalising public services. She has advocated the privatisation of Scottish Water. She has associations with those who have most to gain from a return to PFI/PPP – the cost of which has multiplied and delivered huge profits to banks and business consultants. She was involved in the establishment of the Glasgow Housing Association, an  organisation backed by the banks, who were given the city’s entire housing stock but had the debt for that stock completely written off.”

In the 90 minutes, only the audience made any positive contribution. No speculative or positive option appeared. The glib presumption was that Scotland would appear on the world’s stage, naked and friendless, saddled with 80% debt and unable to raise capital. Nobody pointed out that ‘overbanked’ Switzerland or Liechtenstein are economic marvels. Nobody suggested that Scotland could trade the ~£50bn in future oil tax revenues to come against its debt to drop below the 40% debt level required (UK will remain above 90% indefinitely with or without us). Nobody suggested the £1.5bn released from defence and the £5bn-and-rising from energy exports to rUK could themselves pay the interest on even £80bn. The future was seen entirely in terms of a fragment of the UK behaving as a mini-UK—which is pretty much why the Scots are fed up and want to leave in the first place.

This is not to accuse the organisers of the Festival of Politics of bias—and certainly not to demean Jeremy Peat’s efforts to keep things balanced. But imagine Jeremy Clarkson chairing the film personae of Vin Diesel, Craig Statham and Gerard Butler, gathered in all seriousness to discuss gender balance, and you get some sense of the way this session went.