"Scotland's Future in Scotland's Hands"
First Minister Alex Salmond
New Statesman lecture - London
Tuesday March 4, 2014
This is the second time in the last eight days that I’ve been next door to the UK Cabinet. Last week they paid a flying visit to Aberdeen while the Scottish Cabinet was in Portlethen a few miles away. This week I’m here in the heart of Westminster.
And once again, I’ve been hoping that David Cameron might join me – I thought we could maybe have a debate...
However it’s a pleasure be back in Westminster to deliver this New Statesman lecture. I hope you’ve all had a chance to look through this week’s special issue, and I hope it’s given you some flavour of the vitality of the debate currently taking place in Scotland.
I want to start tonight’s speech by emphasising one point which the media, and UK politicians, sometimes lose sight of. If we vote YES in September then Scotland will become independent in more promising circumstances than virtually any nation in history.
In fact, nobody really doubts that an independent Scotland could be successful. Even David Cameron once put it well:
“Supporters of independence will always be able to cite examples of small, independent and thriving economies … such as Finland, Switzerland and Norway. It would be wrong to suggest that Scotland could not be another such successful, independent country.”
David Cameron omitted to mention that Finland’s GDP per head is nearly 10% higher than the UK’s; Switzerland’s is 50% higher, and Norway’s is 85% higher. But his basic point was well made.
This consensus reflects Scotland’s underlying economic strength. We would be among the wealthiest nations in the OECD. Scotland has contributed more in taxes, per person, than the rest of the UK for every single one of the last 30 years.
Standard and Poor’s, the ratings agency – which for the duration of this speech I’m rechristening Standard and Rich – joined the consensus last Thursday, noting: “In brief we would expect Scotland to benefit from all the attributes of an investment-grade sovereign credit characterised by its wealthy economy (roughly the size of New Zealand’s), high-quality human capital, flexible product and labour markets, and transparent institutions”.
However, the current balance sheet is only part of the economic story. We should also look at the potential of the country.
We have more universities in the world top 200, per head of population, than any other country on the planet; we have huge expertise in engineering and life sciences; an astounding cultural heritage; immense energy and natural resources; and a skilled and inventive people.
So there’s no doubt – none whatsoever – that Scotland could be an independent country. The question the people of Scotland will answer on 18 September, is about whether we should be an independent country.
That’s essentially a choice between two futures – the real choice I’m going to talk about this evening. With one, Scotland is part of an increasingly imbalanced UK – with high social inequalities, growing regional disparities, and more often than not governments we didn’t vote for. With the other, we have the powers we need to create a better country, to build the Scotland we want to see - the Scotland we seek.
I want to start with the letter sent recently by 27 Church of England bishops, blaming the rise in foodbanks on “cutbacks to and failures in the benefits system”.
The letter struck me for two reasons. The first is that when I packed boxes alongside volunteers at the Edinburgh South foodbank just before Christmas, the Trussel Trust told me that in 2011 they had one foodbank in the whole of Scotland. Now they run 43. 50,000 people in Scotland have used them in the last nine months.
The second reason the letter struck me was the strength – the unusual strength - of the language used by the good bishops. It’s been reflected also in some of the comments recently made by the Archbishop of Westminster, now Cardinal Vincent Nichols.
It’s 25 years ago this month that leaders of Scotland’s three largest churches joined together to condemn a UK Government policy as “undemocratic, unjust, socially divisive and destructive of community and family life.”
That letter was written on the eve of the introduction of the poll tax in Scotland. It expressed perfectly the widespread anger about the tax, which commanded support from only 10 Scottish MPs out of 72.
The poll tax became a totemic issue in Scotland - the supreme example of a policy imposed upon us in the teeth of massive public opposition. And one reason why the Scottish people endorsed devolution so overwhelmingly in 1997, was to stop anything similar ever happening again.
It’s worth repeating the phrase used by Scotland’s church leaders 25 years ago - “undemocratic, unjust, socially divisive and destructive of community and family life.”
Last April, the bedroom tax came into force. It is affecting more than 70,000 households across Scotland – 80% of which include a disabled person. It was opposed by more than 90% of Scotland’s MPs.
It’s part of a package of welfare reforms – again opposed by more than 90% of Scotland’s MPs - which have seen the growth of foodbanks, and which the children’s charities have forecast will see tens of thousands more children born into poverty by 2020.
However, these policies are exacerbating social trends which have prevailed over generations. The Organisation of Economic Co-operation and Development reported three years ago that since 1975, inequality among working-age people has increased faster in the UK than in any other member country. Even before the current government came into office, Professor Danny Dorling calculated that the UK was the 4th most unequal country in the developed world – it hardly seems likely that the position has improved!
And regional inequalities have grown alongside social inequalities. The UK now has the highest levels of regional inequality of any country in the European Union.
The UK Government’s Business Secretary, recently called London “a kind of giant suction machine, draining the life out of the rest of the country.”
Now, I’m much more moderate in my views than Vince Cable - London is one of the great world cities; much of its success is to be celebrated.
And the economic gravitational pull of London is nothing new. This building was constructed at the end of the 19th century, because the Institution of Mechanical Engineers -which had been based in Birmingham since 1847 - decided it needed a London headquarters.
But London’s influence is infinitely stronger now. And it’s impossible to deny that the attraction of capital and talent to London is now one of the defining features of the UK economy.
A recent report by the Centre for Cities noted that 80% of private sector job creation was taking place in London.
Prof Tony Travers of the London School for Economics has said: “London is the dark star of the economy, inexorably sucking in resources, people and energy. Nobody quite knows how to control it.”
David Cameron argued before he became Prime Minister that “an economy with such a narrow foundation for growth is fundamentally wasteful and unstable.”
Yet his record is weaker than his words. A couple of years ago the Institute of Public Policy for the Regions published a report – “On the Wrong Track”. It found that public spending on major transport infrastructure amounted to £2,600 per head in London– and £5 per head in the north east of England.
I’m First Minister of Scotland – meaning all of Scotland. If the government I lead were responsible for such massive disparities, we wouldn’t stand a chance of re-election.
There’s a growing realisation that wealth and opportunities are too concentrated, geographically and socially. UK Government policies are working for too few, and denying opportunities to too many. Britain is imbalanced.
When I sat across the road in the Westminster chamber, the redoubtable Eric Heffer, MP for Liverpool Walton, used to sit on the backbenches just behind me. Eric hadn’t always favoured devolution, but the experience of Mrs Thatcher’s government had changed his mind. And whenever I made speeches, I used to hear Eric’s growl behind me “Remember Alex – Liverpool’s coming with you!”
I’m not suggesting that we take up Eric Heffer’s offer, but it’s interesting that in the last year we’ve seen a real determination from councils and cities in the north of England to see a prosperous and empowered Scotland as an opportunity rather than a threat.
The Association of North East Councils and Cumbria commissioned academic research which found that: “the prospect of further autonomy for Scotland is also stimulating a new interest in the North East, Cumbria and Scotland to work more collaboratively together.”
We’re now seeing a practical expression of that as local authorities in both countries, working together, begin to explore how best to promote business, tourism and transport links.
This “Borderlands” initiative, as it is known, highlights the practical cross-border co-operation which would continue and would be strengthened by Scottish independence – when the nations of these islands share a partnership of equals based on our many areas of common interest.
And after Scottish independence, the growth of a strong economic power in the north of these islands would benefit everyone – our closest neighbours in the north of England more than anyone. There would be a northern light to redress the influence of the dark star – rebalancing the economic centre of gravity of these islands.
There are those who worry that Scottish independence would leave an “England … entrenched in conservatism” as Helena Kennedy puts it in her New Statesman article.
However it’s worth noting that since 1945, there have only been two elections – in 1964 and the first of 1974 - where the largest party would have been different if Scotland had been independent. Those two governments sat for a total of 26 months.
Independence would have relatively little impact on the arithmetic at Westminster – although it would, finally, provide the definitive answer to the West Lothian question. Scottish MPs would no longer vote on policies primarily or entirely concerning England.
Indeed, Scotland would be more influential and valuable as an independent nation, than we can be by contributing 9% of Westminster’s MPs. We wouldn’t always get things right – sometimes the rest of the UK would learn from our mistakes – but we would exert a powerful and positive influence through example – the beacon of progressive opinion.
And independence would address a profound democratic deficit in Scotland – not a passing inconvenience, but a debilitating disconnect at the very heart of politics.
I’m 59 years old. For more than half of my life, Scotland has been ruled by parties with no majority. At the last four UK elections, the Conservatives in Scotland have won 0, 1, 1, and 1 seat respectively.
That isn’t an abstract point of constitutional theory. It affects the wellbeing and prosperity of individuals and communities across the country. The Conservative Party have lost every General Election in Scotland since 1959 but have succeeded in ending up in government for 31 of the last 55 years.
I spoke earlier about the bedroom tax. It’s a good example not simply because it’s unjust – though it is – but because it’s a policy which could never have been passed by a parliament with Scotland’s interests at its heart. It is driven primarily by rising rental and housing benefit costs here in London and south-east England, not by increases in Scotland.
And although 60,000 people in Scotland will be penalised unless they move into single-bedroomed accommodation, we currently have a supply of just 20,000 single-bedroomed homes for social rent. In many parts of the UK, the bedroom tax is unpopular - in an independent Scotland, it would have been unthinkable.
Because of devolution, Labour, the Liberal Democrats and the SNP have been able to work together in the Scottish Parliament to mitigate the impact of the bedroom tax. As a result, nobody will face eviction in Scotland this year, solely as a result of the tax.
But we haven’t abolished the bedroom tax, because the Scottish Parliament doesn’t have the power to abolish the bedroom tax. Instead, we’ve had to develop a very expensive framework of measures, to cancel out the consequences of a policy which nobody in Scotland could ever have come up with in the first place. Wouldn’t it be better for us to have responsibility for our own welfare system instead?
And the bedroom tax is not an isolated example. Scottish MPs have voted against the welfare benefits uprating bill, child benefit means-testing, cuts in capital spending, Royal Mail privatisation and many more coalition policies. But despite that, all of those policies have been or will be implemented in Scotland.
When people voted overwhelmingly for devolution in 1997, many of them thought it would address the democratic deficit in Scotland. However devolution has dramatised, not ended, that democratic deficit.
That’s partly because of the contrast people now see between the record of the Scottish Parliament and the record of the Westminster Parliament.
There’s a contrast of approach. In the north east of Scotland last week, the UK Cabinet – on its third visit to Scotland in a century – jetted into Aberdeen and jetted out, without any engagement with the public. The Scottish Cabinet, on our 26th public meeting outside Edinburgh in the last six years – advertised in the press to encourage as many people as possible to come along to ask us questions for more than an hour.
There’s a contrast of language. In some of the rhetoric that gets used in the debate emanating from Westminster, people are labelled – they’re termed “strivers” or “skivers”; “shirkers” or “workers”. That language scarcely features in Scotland. There’s a shared recognition that society isn’t divided between skivers and strivers – one group who pay in and another who take out. Everyone contributes to society, in different ways and at different times; and everyone needs public support, in different ways and at different times.
And there’s a contrast in policies. Successive Scottish Parliaments – and this is the parliament as a whole, rather than any single party - have legislated for progressive purposes. We have promoted social justice alongside economic prosperity. Indeed, we see social justice as essential to sustainable economic prosperity.
The first Parliament introduced world leading homelessness legislation. The second parliament tackled Scotland’s health inequalities through the ban on smoking on public places. The third parliament reintroduced free university tuition and unanimously passed the most ambitious climate change targets in the world. This parliament is seeing world leading action to address Scotland’s relationship with alcohol, and legislation to expand and transform early years education and care.
Alongside that, we have adopted policies to support economic growth – cutting business rates, promoting Scotland abroad, giving co-ordinated and innovative support to infrastructure and to key sectors of the economy. We have higher employment, lower unemployment and lower economic inactivity than the rest of the UK.
That doesn’t mean we’re perfect, or never make mistakes. It simply reflects the fact that members of the Scottish parliament – of all parties – have worked together to reflect the values, tackle the priorities and promote the aspirations, of the people who voted for them.
That’s why there is a clear majority of people in Scotland who want the Scottish Parliament to have control over welfare and taxation. I believe that over the next six months, that view will translate into clear support for independence.
It’s interesting to look at the most recent Scottish Social Attitudes Survey findings. They show that 62% of people trust the Scottish Government to work in Scotland’s long term interest. For the UK Government, the figure is 32%.
That helps to explain why the occasional visits by Westminster politicians to Scotland are being received so badly.
In the last three weeks people in Scotland have seen an array of approaches from the UK Government – what they apparently call their “Dambusters” strategy. We were lovebombed from a distance by David Cameron, then divebombed at close range by George Osborne. The UK Cabinet came to Aberdeen but chose not to meet members of the public.
I believe George Osborne’s speech on sterling three weeks ago – his “sermon on the pound” – will come to be seen as a monumental error.
It encapsulates the diktats from on high which are not the strength of the Westminster elite, but rather their fundamental weakness.
In contrast, we will seek to engage with the people of England on the case for progressive reform.
George Osborne referred to Scotland as a “foreign” country seven times. Yet the Chancellor must know that the Ireland Act of 1949, negotiated after infinitely more difficult circumstances than we have, specifically states that Ireland is not to be regarded as a “foreign country”.
Scotland will not be a foreign country after independence, any more than Ireland, Northern Ireland, England or Wales could ever be “foreign countries” to Scotland.
We share ties of family and friendship, trade and commerce, history and culture, which have never depended on a parliament here at Westminster, and will endure and flourish long after independence.
George Osborne’s speech was also mistaken in its economics – totally misrepresenting the size of Scotland’s financial sector, and offering facile and misleading comparisons with the Eurozone.
It was counterproductive in its politics- a day-tripping Conservative minister saying “no” to Scotland before flying back to Westminster again.
And it contradicted the best interests of the rest of the UK. His proposed policy would impose transaction costs on English businesses; it would remove Scotland’s substantial oil and gas and whisky exports from the sterling balance of payments; and by laying sole claim as the continuing state to the public asset of the Bank of England, it would see the UK Government take full responsibility for the liability of the £1.6 trillion national debt.
The New Statesman this week carries an online article from David Scheffer –professor at Northwestern University in Chicago, who served as a US Ambassador-at-Large during President Clinton’s administration. Professor Scheffer points out that “nothing in international law requires Scotland to pay one sterling pound of UK debt if the rest of the UK is deemed the continuator state in this way”.
Scotland has already indicated that - with agreement - we would service a proportionate share of the debt. Any reasonable approach to negotiation would propose a share of assets and liabilities. That is simply the right thing to do.
For the Chancellor to put the rest of the UK potentially in a position of being landed with all of the UK’s gargantuan national debt is at best reckless and at worst totally irresponsible.
Of course once the current campaign bluster is done with, the UK Government will return to the commonsense reason set out in Clause 30 of the Edinburgh Agreement – that is that following the referendum, both sides will accept the result and act in the best interests of the people of Scotland and the rest of the United Kingdom.
But the current dambusters rhetoric has betrayed an attitude as antiquated as it is unacceptable. From the myopic perspective of the Westminster elite, Scotland is last among equals.
And over the next few months each and every time we hear another of these lofty interventions, telling us all the things we can’t do, it will elicit a clear response in Scotland – the days of governance by Westminster dictat are over.
There is a second future available to the people of Scotland. One where we use the powers of independence to transform our country, rather than mitigate other people’s mistakes. So don’t let them tell you we can’t build a better country.
So if we take childcare as an example. Two weeks ago, our Children and Young People Act was approved by the Scottish Parliament. It will see a major increase in childcare provision – to 600 hours a week - for many two year olds and all three and four year olds.
It’s an important step, but one which falls well short of our ambitions for childcare. Those ambitions – for transformational change – can only be achieved with independence.
That’s partly because independence allows us to choose different spending priorities. We can decline to finance the madness of a new Trident programme, and invest in our future instead.
But most importantly, only independence allows us to benefit from the success of our policies.
We’ve led a sustained drive to increase women’s employment over the last 18 months. The female participation rate is now higher than in any other country in the UK, having increased by over three percentage points in the last year – 74,000 women.
Using 2012 figures, getting female participation in the workforce up to the same levels that they have in Sweden, would require an increase of six percentage points or so. The scale of that increase translated into employment would generate around an additional £700m a year of tax revenues.
The problem is, under current arrangements, the overwhelming bulk of these revenues go straight to the UK Treasury in London. And I see no sign whatsoever in George Osborne’s conduct over the last month – or over his whole political career, or indeed his whole life – that the first thing he would do with £700m of new revenues, created by a Scandinavian-style transformation of childcare policies, is to give these revenues back to Scotland to fund the policy that made it possible.
Retaining that revenue in Scotland is what will make that transformation in childcare affordable and sustainable. With devolution, we bear the financial cost of our social investments; with independence, we receive the full benefits.
The second example is population. Back in November, the UK Government welcomed warmly a report from the Institute for Fiscal Studies, which was about as damning a criticism of its own policies as is possible to imagine.
Like last week’s report from Standard and Poor’s, which found Scotland’s wealth levels to be comparable to Germany’s, the Institute for Fiscal Studies recognised Scotland’s current economic strength.
The IFS report recognised that Scotland has had a lower budget deficit than the rest of the UK over the last five years. It made it clear that our debt to GDP ratio on independence would be lower than the UK’s.
However the IFS also predicted that Scotland’s population might only grow by 4% in the next 50 years, while the UK’s might increase by more than 20%. That’s the main reason it was welcomed by the UK Government.
This is part of a problem that goes back generations. Scotland’s population has increased by just over 10% in 100 years – from 4.8 million to 5.3 million - while the population of England has increased by almost 60%
In recent years, successive Scottish Governments have worked to address that by attracting people to study and then work. Until UK Government policy changed, we had some success. The ten years from 2001 to 2011 saw Scotland’s highest population growth in a century. In fact, we saw higher growth in ten years than the IFS is predicting in the next 50, which is perhaps a lesson in why you should take population forecasts with an even larger pinch of salt than economic forecasts.
However, any reasonable person, reading that report, would draw the conclusion that Scotland starts from a position of economic strength; and that our long-term demographic challenge can be tackled.
The UK Government’s approach is quite different. It seems to be suggesting that it will do nothing at all about Scotland’s low population growth – in fact, it will pursue immigration policies which make the problem worse.
In other words, the UK Government’s vision for Scotland, if we stay tied to Westminster rule, seems to be one where Scotland – energy-rich, resource-rich, talent-rich Scotland - eventually becomes dependent on the rest of the UK, at some unspecified point in the future, because we haven’t been able to address a problem that was a century in the making, and which we have decades to sort out.
How can that possibly be a positive vision of Scotland’s future?
And it raises the obvious question: why would anyone accept that future, when instead, we could choose to change it?
Ladies and gentlemen, choosing to change – to seize opportunities and to meet challenges. That’s at the heart of this debate.
What we want to do is to build a better future; to use our natural and human resources to create a fairer more prosperous country. And the fundamental truth at the heart of the case for independence is that the best people to do that- the best people to make decisions about Scotland’s future – are the people who live and work in Scotland.
At the start of this speech I referred to the letter sent by Scotland’s churches 25 years ago. I want to end with another voice from Scotland’s postwar history.
One of the finest Scottish political speeches of my lifetime was the Glasgow rectorial address given by Jimmy Reid in 1972. He spoke about the alienation felt by many people in society. He described it as “the frustration of ordinary people excluded from the forces of decision making. The feeling of despair and hopelessness that pervades people who feel with justification that they have no real say in shaping or determining their destinies.”
It’s a speech which still resonates today. If anything, its relevance has increased over the decades.
Independence on its own won’t address alienation – although it will give us the powers to do so.
But one truly wonderful thing about the debate happening in Scotland now, and the vote on 18 September, is that it is fundamentally a time – not for alienation – but for engagement, for hope.
Because this referendum isn’t about politicians. It’s not about me, or David Cameron - and it’s not even about David Bowie. It’s not about Standard Life, and it’s not about Standard and Poor’s. It’s not about the press and it’s not about the broadcasters, or the elites in London or Edinburgh. It’s about the people, the people of Scotland.
Adlai Stevenson once referred to a moment before presidential elections when people became reconciled to the requirements of the modern age. That moment of supreme clarity and often of fundamental reassessment he called “the liberal hour”.
On referendum day, all of the people of Scotland, not just for the first time in 300 years but the first time ever, will be truly democratically sovereign. Everyone will have an equal say in making the decision.
And there will be a moment for everyone in Scotland, on referendum day, when they stand in the polling booth and take the future of their country into their own hands.
This moment of opportunity, this moment of engaged sovereignty; this moment of clarity, and for many of reassessment, will come on 18 September. Let’s call it Scotland’s Hour. Because on that moment - and I believe from then on - Scotland’s future will be in Scotland’s hands."