Why do economists ignore independence as a solution to Scotland's problems?

I ALWAYS worry when I write about “The Establishment”. As a white, male, older, professionally qualified professor who has been given a platform it is a bit hard to deny that I must, in some way, be part of that set up. And yet at the same time I look at what goes on in society and realise that being a part of The Establishment is not a matter of who you are, but of what you believe in.

That opinion was very firmly reinforced this week. The combined forces of the London-based Institute for Fiscal Studies, the Strathclyde University-based Fraser of Allander Institute, and Stirling’s University Management School published a report on the stresses that they think have arisen within Scottish Government financing as a consequence of the coronavirus pandemic. Reading it, I could not help but think that I was an outsider.

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To a very large degree, what these institutes say is of very little consequence. As far as I can tell no one is obliged to listen. That I might describe as good news because, when all is said and done, what they suggest is some minor tinkering at the edges of the devolution settlement. The intention is that Scotland should not be caught out again by rapid changes in budgets set by London. They also propose very small increases in borrowing powers for Holyrood which, in the overall scheme of things, will be inconsequential.

In that case, what I am really interested in is what is not being said by these combined forces of supposed economic firepower. What matters is that the issue that is almost absent from their report is any debate about independence. It is true that there are a couple of what might best be described as quite snarky comments about Scotland’s ability to manage risk without the rest of the UK underwriting its finances, but thereafter the issue is entirely ignored. It is taken as read that Scotland will be better off in the Union, and about that I do not agree.

The simple fact is that this report addresses an issue that is created by a failed Union and a failed devolution process, failings which can never be addressed by some tinkering at the edges.

In a Union that demands that most political power be retained in London and that Holyrood can only be given responsibility for the delivery of policy within the limits of heavily constrained budgets, there is no possible mechanism for truly providing the current Scottish Government with the powers that it needs to deliver an economic policy best suited to the people of Scotland. No amount of tinkering will overcome that fact. Only independence will, and these authors consider that to be off the table.

The result is a report that was always going to make inconsequential recommendations on what can now only be described as an insoluble problem, which is the impossibility of making devolution work.

The Scottish establishment does not wish to recognise this. Most of conservative (small c) inclination in England simply dismisses the possibility of change, and I very definitely put the Institute for Fiscal Studies in this group. What that means is that as yet another year comes to a close the political forces within the Union remain as divided as ever. Those who want to retain United Kingdom control of Scotland pretend that the independence solution does not exist. This report provides very clear evidence of that.

On the other hand, those who think that independence is the only answer for Scotland continue to feel themselves outside the political Establishment, despite years of SNP government in Holyrood.

When will this change? That, surely, is the agenda for 2022.