Self-congratulation serves Scotland ill

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The appeal of separatism in modern Scotland is linked to the country’s relative economic decline, as self- congratulation turns to grievance in response to failure.

This year is the 300th anniversary of the political Union of Scotland with England. If opinion polls are right, the separatist Scottish National party will be the largest grouping in the new Scottish assembly in May.

The economic argument was set out in the Financial Times on December 12 in parallel contributions from Alex Salmond, leader of the SNP, and Wendy Alexander, the most articulate of Labour’s Scottish economic spokesmen. Scotland consumes a little over 10 per cent more than it produces and a separate state would face deficits of this order in public finances and on trade. About half of this figure is Scotland’s pro rata share of current UK imbalances.

Ms Alexander argued that Scotland needs the subsidy it receives from the English taxpayer. Mr Salmond’s response is that the gap would be met if Scotland received a disproportionate share of UK oil revenues, to which the geography of the North Sea gives it an arguable claim.

Can Scotland expect a larger handout from the UK exchequer or international oil companies? This small-minded, grasping materialism is characteristic of much debate in the Scottish parliament and on the hustings. That attitude provides the strongest argument against Scottish independence.

Posters at Scottish airports and rail stations today welcome visitors “to the best small country in the world”. But this sentiment should be expressed by the guest on departure, not by the host on arrival. Belligerent self-congratulation is a common Scottish characteristic that, when frustrated, gives vent to a powerful sense of grievance. As Gordon Brown prepares to take office as Britain’s first Scottish prime minister for 70 years, the largest question mark over his suitability for office is whether he can put these feelings to one side.

“Here’s tae us, wha’s like us” is a Scots slogan, which can be translated as “let us praise our own admirable qualities”. The adverse consequences of this approach to life are recorded in fictional works from Braveheart to The Prime of Miss Jean Brodie. The adverse effect on business is spelt out in one of the greatest Scottish novels, George Douglas Brown’s The House with the Green Shutters. Revulsion from these sentiments and the associated insularity provide a principal reason that, like many Scots, I have spent my adult life outside my beautiful native country.

But serious economic debate demands a perspective with wider historic and economic horizons. The free trade clauses of the Treaty of Union were decisive in transforming Scotland from a poor country on the periphery of western Europe into one of the richest regions in the world. Edinburgh’s Georgian new town and Glasgow’s fine Victorian streets and squares are testimony to the 200 years of rapid economic development that followed the Union with England.

Scots took advantage of the opportunities created by England’s empire. They played a disproportionate role in trade and finance with India and China and in the settlement of colonies in North America, Australia and New Zealand. Wealth accumulated overseas financed domestic industries. Imperial connections promoted Scottish textiles. Steam engine technology developed in Clydeside created a cluster of Scots companies that became dominant in building for the British naval and merchant fleets and in the manufacture of locomotives. None of this would have happened without the Union.

Yet in the 20th century these competitive advantages disappeared. Scotland, which had led the world in steam engines, played no significant role in the development of internal combustion engines: Scotland’s last car plant, established with massive UK government subsidies, manufactured the Hillman Imp, one of the worst cars ever built. The fast trains that connect England and Scotland today are made by Alstom and Fiat; the Queen Mary II was built in France. The aircraft that substitute for locomotives and liners are assembled in Seattle and Toulouse.

Union benefited Scotland in the two centuries after 1707, but its effects in the subsequent 100 years is more uncertain. The pull of London diminished other trading centres. While Edinburgh is today the second financial city in the UK, it trails a long way behind. Free trade with England and its colonies benefited Scottish manufacturing before 1914 but these advantages diminished as empire fell and protectionism rose. Today, free trade is available to all small countries that are part of an international community.

Still, the main responsibility for Scots’ relative economic failure lies with Scots themselves. Belligerent self-congratulation is ill-suited to a changing economic environment and Scottish corporate responses to new technology and new competition were defensive and inept. Locomotive and ship builders responded by consolidating under weak leadership. Trade unions quarrelled not just with management but with each other for a larger share of a diminishing cake. The Distillers Company amalgamated independent whisky producers into one business whose decades of complacent mismanagement ended only when the company was acquired by Guinness.

The appeal of separatism in modern Scotland is linked to the country’s relative economic decline, as self- congratulation turns to grievance in response to failure. The crucial issue for Scotland’s future is whether independence would reduce that sentiment, or aggravate it. I shall turn to that issue in next week’s column.

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