OVER the last year, we have spent considerable time detailing the economic failings within the global, UK, and Scottish economies. It is time to start focusing on the economy of an independent Scotland.

Last week, we highlighted that since the late 1970s, successive UK governments have been guided by an economic vision (neoliberalism) that assumed that the “free market” and the “invisible hand” would ensure that there was an economic levelling up across the UK. This ideological position has enabled governments to justify low levels of fiscal transfers and public investment in areas outside of London and the South East. In summary, there has never been an economic plan for Scotland. And we can all see how much of a disaster that has been.

The Scottish Government published its economic plan for Scottish independence at the end of 2022: A Stronger Economy With Independence. It can be seen as an update or a reworking of the much more detailed Sustainable Growth Commission Report written in 2018. However, as a standalone document, it is the only economic “plan” we have.

But the details are missing. If it is a plan, it could easily be called a rather flimsy one. But something even more important is missing: an alternative plan.

Outside of a collection of papers commissioned mainly by Common Weal and the work of the Scottish Currency Group, there is no economic plan for an independent Scotland. Considering the political malaise and the stalling of the independence project, this surely comes as no surprise, but I believe that we need a detailed economic plan for an independent Scotland. Unfortunately, it is very difficult to argue when someone says: “There is no economic plan for independence.” They are 100% correct if they genuinely seek a detailed plan.

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Today, I will start to outline what that “alternative” plan would look like. But this is a call-out for views and ideas before I get there.

Let’s start with the basics: Is this a worthwhile initiative? Shouldn’t we press the Scottish Government or the SNP to create one? Should we be happy with what we have? If we need one, who should write it, and how would it be funded? Please send us an email at info@scotonomics.scot or leave a comment below.

So, back to the plan!

The first part of any plan would involve a summary of where we are now. My contribution would be that focusing on GDP growth as the number one target for every part of the UK economy has led to a severe lack of resilience, selling off public wealth through privatisation, rising inequality, low public investment and infrastructure, a lack of democratic control of our institutions and massive ecological damage. The report card on the last 40-year “plan” could not be worse. It has been a complete and utter failure for the wellbeing of the majority of people across the UK.

The next logical step would be to look at similar countries and compare how they are doing. Scottish Government papers do an adequate job and point to a future similar to those nations. That is, in fact, pretty much the basis for A Stronger Economy With Independence, which seeks to learn and be inspired by similar independent nations. We also highlighted the “test case” for Scotland as a wealthy Global North nation, highlighting the economic evidence that “small countries are successful”.

However, a detailed plan for our economy must look forward and be conscious of the ecological crisis, technological developments (especially in AI and robotics), international instability and the likely huge impact of being independent while every nation continues the slow and painful task of weaning itself off fossil fuels.

So, to make progress, especially considering the fundamental uncertainty in economic predictions, our model would have to be underpinned by a set of assumptions. Independence will look very different if it comes in 2030 or 2035. The plan changes if we become independent during a period of high inflation, unemployment or a significant trade imbalance.

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I would argue that it is impossible to create a detailed and thorough plan without making some assumptions. After reading A Stronger Economy With Independence again today, I do not know the assumptions underpinning the paper. For example, there is no timeline for independence. Without basic assumptions, it is a stretch to call it a plan. Rather, the Scottish Government has created, at best, a very general economic framework for independence. But maybe that is what people want (let us know!).

Choosing which assumptions to use can create problems and expose a modeller to charges of being too optimistic or too pessimistic. To attempt to overcome these issues, it is common to create scenarios. So, any plan for the Scottish economy would have to detail certain scenarios based on different pathways.

For example, we would have a business-as-usual pathway modelled on what we can glean from A Stronger Economy With Independence. We would also create alternative pathways based on, for example, a faster transition to our own currency or earlier access to the EU. These pathways will help us explain a painful truth: that independence itself does not guarantee economic success.

We need to build an economic model to help us make predictions, and of course, we need time and resources to create a plan.

The need is clear, but I am unsure if our progressive organisations desire to undertake a project of this size or if people are willing to financially support the work. It would be interesting to hear people’s thoughts.

A plan also needs a general direction. Think “Sustainable Growth” or “Wellbeing”. Next week, we will discuss the need for a vision for an independent Scottish economy and hopefully feed back on some of the responses to this article.