Get all your news in one place.
100’s of premium titles.
One app.
Start reading
The Economist
The Economist
Business

Scotland has been on a ten-year holiday from reality

Editor’s note (June 12th 2023): On June 11th Nicola Sturgeon was arrested by police investigating the Scottish National Party’s finances. She was later released without charge pending further investigation.

SCOTLAND WAS the first part of Britain to get high on populist referendums. In 2014, two years before the Brexit vote, the Scottish independence campaign exhorted people to ignore the experts and revel in a glorious national renewal. The Scottish National Party (SNP) lost that battle but it won the peace. Since then the SNP has triumphed in election after election. It has made the intoxicating cause of independence the principal dividing-line among Scottish voters. Nicola Sturgeon, the party’s leader until her resignation in February, managed to make liberals giddy, too, by being not just populist but progressive.

The wheels have come off the camper van in spectacular fashion. Ms Sturgeon’s abrupt exit amid a police investigation into her party’s finances has shattered the SNP’s credibility. The inability of the Scottish government to call another referendum unilaterally means that the path to independence is blocked. Under Humza Yousaf, the party’s new leader, the SNP is projected to suffer heavy losses to Labour in the next Westminster election, making it more likely that Sir Keir Starmer will win the keys to 10 Downing Street. The SNP’s grip on Holyrood, where it has held power continuously since 2007, will be in serious doubt at the election to the Scottish Parliament in 2026. Scottish politics is suddenly, dramatically, in flux.

And yet Scotland is also stuck. The country remains split down the middle on independence. Even if the chances of another referendum in the foreseeable future are very slim, the simplest electoral strategy for both the SNP and the Scottish Tories, the strongest unionist voice, will be to whip up the prospect for years to come. The SNP itself has become incapable of thinking beyond the next strategic gambit for divorce. Elementary tasks—procuring ferries, conducting a census—confound an administration that once claimed it could build an independent state in just 18 months. Genuine problems have been left to fester. Scotland is a parable with lessons that both encourage and dismay: that a populist movement can suddenly unravel and that the damage it causes can still endure.

Highland dudgeon

Scotland’s problem is slow growth. Productivity has been stuck since 2014, and parts of the country remain shockingly poor. Business investment as a share of GDP has been flat since 1998—were Scotland an independent country, it would have been third from bottom in the OECD. In 2018 Scots launched 46 companies for every 10,000 of the population, versus 71 in the rest of Britain. North Sea oil is in long-term decline. Scotland’s banking industry has become more dependent on London since the financial crisis. Good universities are constrained from admitting as many Scots as they should by a policy of free education.

Low growth is a problem that Scotland shares with the rest of the United Kingdom. But its predicament is worse, for two reasons. One is demography. The Scottish population is expected to peak sometime this decade and then fall back over the next 50 years. It will age more rapidly than England’s. The over-65s will rise from a fifth to a third of the population by 2072. All this will knock half a percentage point off annual economic growth.

The second reason is that the flow of money from Westminster is becoming less lavish. The SNP has been able to recreate the trappings of a Nordic-style social democracy—free university tuition, free eye tests, free prescriptions—in part because of a generous supply of cash from the British government. An arrangement known as the “Barnett formula” determines by how much the biggest grant changes each year. This formula is going to become a squeeze in coming decades: the premium of per-person public spending in Scotland will fall from 124% of English levels in 2027 to 115% in 2057.

Improving Scotland’s economic prospects, and reversing its demographic decline, ought to be the SNP’s focus—not just for the sake of the country, but also as a route to the party’s revival. However, manufacturing outrage is electorally easier and more instantly rewarding than the long haul of fixing real problems.

As with all populism, weaning activists and voters off a habit of constitutional confrontation will require a cultural shift. Every issue is seen through the lens of social outcomes first and implications for growth last. The SNP has grown chilly to businesses and made the fuzzy idea of a “well-being economy” the centrepiece of its agenda; its Green coalition partners repudiate the measure of GDP growth. The party has hoarded power centrally in Edinburgh, when cities such as Glasgow ought to have been able to try out their own growth-enhancing policies.

In a country where devotion to the cause counts for more than competence, scrutiny has been sorely lacking. Holyrood lacks a vibrant backbench culture; the poison of polarisation has made think-tanks and academics hesitant to criticise the SNP. Mr Yousaf still seems wedded to a mix of giveaways, tax rises and constitutional fights. It will take a new party leader—perhaps Kate Forbes, the runner-up in the race to succeed Ms Sturgeon—to put growth first.

Giving populists what they want sometimes makes things worse. Westminster’s tactic of heaping powers on Holyrood in an attempt to quell separatism has failed. Instead the British government needs to police the boundaries of devolution. It was within its rights to reject Scottish demands for another referendum and to strike down proposed gender-recognition reforms. Westminster needs a stronger role in overseeing strategic infrastructure in energy and transport. Ms Sturgeon refused to take questioning from parliamentary committees in Westminster; that should change. The Public Accounts Committee should take more interest in how the Scottish government spends its money.

This more businesslike approach will inevitably prompt nationalists to say that the English are recolonising Scotland. Mr Yousaf is unpopular, which makes it all the more likely that he will seek to win over SNP activists with one last heave for independence. Politics is about vision and emotion. But the parable of Scotland shows that even populists must eventually demonstrate that they can solve genuine problems. The country’s political class has been on a long holiday from reality. Scotland cannot afford another wasted decade.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.