Britain Is Broke

Making that statement does not fill me with great joy. There may be an entirely different social debate about wealth distribution that could equally have headlined “Britain is Broken” but this blog is about fiscal facts—that Brown’s smug ineptitude and Osborne’s bitter medicine have combined to bring one of the world’s great economies effectively to a level of stagnation that few (no?) analysts predicted seven years ago.

The statement is made with reluctance because this author is British, shares the islands’ culture with the other three nations and is downright proud of how much this medium archipelago influenced the development of civilisation. All great stuff. But all in the past and, rather than wear our stiff upper lips, hoping they’ll provide more than further demonstrations of fortitude, we all need things to change.

We Scots need our chance to find our own fortune. This deal with our English friends has been a good one for both sides. But, ever since the Masters of the Universe took over the asylum (sorry—Canary Wharf), England especially has lost the plot and there is little sign of it re-finding it, even after the most serious fiscal train wreck in living memory.

So the Scots are offski—and here’s why. Whereas, once, big countries were the answer to endless petty wars that plagued civilisation, now we’ve learned to coexist and desist from nuking each other, a similar extinction-level event to that which once wiped out the dinosaurs is underway: it’s the smaller, nimbler, more flexible creatures that will survive. Britainosaurus has gone the way of Monty Python’s parrot—it’s just too ponderous  a beast for news that it’s dead to have reached its tiny brain yet.

And, lest some flag-waver think I’m being flippant and/or biased and/or too lazy to put a substantive case, allow me to post as exhibit ‘A’ the table below, which draws together some salient figures, comparing the economy of Scotland with that of the UK.

Key Trade Balance Statistics for UK and Scotland

Key Trade Balance Statistics for UK and Scotland

The first thing to notice is how the situation has deteriorated for the UK as a whole. In the seven years to 2012, the trade imbalance worsened with that between UK and EU doubling. Also notice that the UK became a net oil importer, losing a once positive balance to spend 10% on importing what we once sold. The result is that the worrying £60bn trade deficit of 2005 has ballooned to almost double and new represents each person in the UK living £1,710 above their means each year.

Contrast all this with Scottish statistics, which Whitehall has doggedly obfuscated in their eagerness to undermine the idea that Scotland is economically viable without the steadying hand of its bigger brother down south. Note that in all three main categories, the Scottish account is positive, culminating in an estimated £21bn trade surplus, once the largest chunk—trade with England—is taken into account. Small wonder that anyone in Whitehall in the know is desperate for Scotland not to leave.

Even allowing for inaccuracy and the extensive negotiations that would precede any such step, these figures don’t just make a formidable basis for an independent Scotland; they flag a little caution to both our English cousins and to anglophiles in Scotland too (among whom I count myself). Because we all live in an interwoven world. If the fortunes of distant trade partners affect prosperity, how much more true for our close neighbours?

Even if the future were blindingly rosy for the Scots themselves, little would be achieved thereby if England were to continue on its present socially disruptive and fiscally dogmatic path. Look at the numbers above: trade with the rest of the UK (94% of which is England) dwarfs Scottish trade with elsewhere. Though Scots will make their own choices, ignoring what would be good for England (even if England seems oblivious to what that might be) will damage the Scots ability to achieve new aspirations. If the English economy sneezes, we will still risk catching flu.

So what might that entail? Keeping the pound for one. It’s in both our interests because: a) it will cause least disruption to Scots business and keep an economic flywheel working for us and; b) the English will benefit from it remaining an oil currency and Scots exports propping up its exchange rate and bank interest grade.

A second is steadying the English wobble on Europe being fomented by UKIP and benighted Tory backwoodsmen. Clearly the EU needs some straightening out but, in LBJ’s pithy phrase, it’s much better to have ’em in the tent pissing out than to have ’em outside the tent pissing in. Look at the trade both England and Scotland have with Europe; we both need to be at the table (with Eire?) making our case against Spanish fishermen, French farmers and all the other initiative-stifling lobbies.

We could even spare England a wheen of pain on defence. Without the Scots, their £40bn defence budget would be doubly unsustainable. This will force the MoD to take either the decision to axe England’s long-expired global role or to cancel Trident’s replacement for which there is no sane use—or both. Forming a team with Scotland and Eire, English defence could focus on heavy ground forces, long-range naval ASW/strike ability and a beefy air force to combine with Scots and Irish doughty infantry and specialist long-range maritime security into an interlocking North Atlantic component of NATO.

And, if the Scots succeed—as they are lining up to do—in becoming the literal powerhouse of Europe, leading to us breaking down centuries of British isolation by re-forming close ties we once had across the North Sea, this would finally drag the English closer to their natural allies—the Germans. And if they taught all of us a thing or two about supercharging economies, how much different would the EU look? Imagine a productive, socially advanced northern bloc leading the rest out of Mezzogiorno miasma to more enlightened prosperity, setting an example to BRICs, the 3rd world & even the USA itself.

It sounds very high-minded. But so did the Magna Carta, the Declaration of Arbroath and the Declaration of Independence. But in the turgid, post depression atmosphere of today are such inspirational concepts not urgently needed? For it is always some ordinary folk, moved by passion and belie—and never the smug establishment—who achieve mankind’s great advances, especially when confronted by a dim and uncertain future. If Britain is indeed broke, then at what point do we stop trying to fix it, lift our eyes and move on?

For when would be a time of greater need for advancement than now?

And who is in a better position to achieve it than the Scots?

Sources:

  • Scottish Tax Forecasts, March 2013, Office for Budget Responsibility, ISBN 978-1-909096-74-5
  • Scottish Draft Budget 2014-15, September 2013, ISBN: 978-1-78256-844-5
  • UK ENERGY IN BRIEF 2012, July 2012, DECC/1.3k/07/12/NP. URN 12D/220
  • Estimating Oil and Gas Flows for Scotland, November 2013, Scottish National Accounts Project (SNAP)
  • Scottish independence: the fiscal context, November 2012, Institute of Fiscal Studies, ISBN: 978-1-903274-96-5
  • Energy imports and exports, 30th August 2013, House of Commons Library SN/SG/4046

About davidsberry

Local councillor, tour guide and database designer. Keen on wildlife, history, boats and music. Stood for the Scottish Parliament 2011; lost by 151 votes.
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