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by Liam Kirkaldy
24 January 2020
As delegates jet back from Davos, Nicola Sturgeon wants to show Scotland can do things differently

As delegates jet back from Davos, Nicola Sturgeon wants to show Scotland can do things differently

Questions over a second referendum remain, but independence or the union is not the only choice soon to be facing Scotland

As some of the world’s wealthiest people gathered in Davos to discuss the future of the global economic system, a very different meeting was taking place in Edinburgh.

In Davos, leading businesspeople, economists and politicians from across the globe descended on the Swiss town for the World Economic Forum’s most exclusive event, to talk money.

Sajid Javid clashed onstage with his US counterpart following the chancellor’s insistence that the UK will go ahead with plans for a tax on giant tech companies. The US Treasury Secretary, Steven Mnuchin, hit back, arguing the proposed digital services tax discriminated against US multinationals before declaring: “If people want to just arbitrarily put taxes on our digital companies we will consider arbitrarily putting taxes on car companies.”

The same day, climate campaigner Greta Thunberg met with Prince Charles, who had driven 80 miles to the conference in an electric Jaguar to deliver a keynote address to business and political leaders.
Launching his new ‘Sustainable Markets Initiative’, the Prince aims to bring together private and public sector leaders, heads of charities, and investors to work towards decarbonisation and a transition to sustainable markets.

And, as ever, the conference took place surrounded by controversy, with protests and demonstrations against the world’s most glaring examples of extreme wealth combined with a growing number of climate protestors. In fact, new statistics lent further fuel to the anger felt by demonstrators, with figures from Oxfam suggesting the richest one per cent of the world have more than twice as much wealth as 6.9 billion people.

The rich talked fiscal policy in Davos, congratulating each other for various examples of their philanthropy, while almost half of humanity lives on less than $5.50 a day.

In total, 119 billionaires are thought to have attended the conference, alongside 53 heads of state. In the run-up, some had held hopes of using Davos to forge a new international consensus to tackle poverty and the climate crisis, at least until the news that World Bank president, David Malpass, wouldn’t attend. In retrospect, those hopes looked desperately naïve. 

Meanwhile, 1,000 miles away in Edinburgh, Nicola Sturgeon was holding very different economic discussions.

Appearing at the Wellbeing Economy Alliance conference, taking place in the plush surroundings of the University of Edinburgh’s Playfair Library, the First Minister was outlining her own attempts to do things differently. The SNP leader said: “Scotland is redefining what it means to be a successful nation by focusing on the broader wellbeing of the population as well as the GDP of the country.

“The goal and objective of all economic policy should be collective wellbeing. This broader approach is at the very heart of our economic strategy which gives equal importance to tackling inequality as economic competitiveness.

“It is why we are so committed to fair work and making sure that work is fulfilling and well paid and why we are acting to ensure a just transition to a carbon zero economy where no one is left behind.

“Putting wellbeing at the heart of our approach means we can focus on a wider set of measures which reflect on things like the health and happiness of citizens as well as economic wealth to create a world that considers the quality of a person’s life to be as precious an asset as financial success.”  

This approach – based in promoting wellbeing, rather than growth – is articulated by the National Performance Framework, which sets out a vision for national wellbeing across a range of economic, social and environmental factors.

At its heart, the idea is a simple one – in attaching value to harmful activities such as drug dealing, while attaching no value to areas such as unpaid care, our economy prioritises all the wrong things.

Inequality grows and the poorest are left increasingly marginalised, while people continue to consume resources at an unsustainable rate.

Yet while the FM’s speech was well received, some would question how her rhetoric matched up to the SNP’s economic vision, as set out in the Growth Commission report.

After all, as the Institute for Fiscal Studies (IFS) highlighted in a December analysis, the report was hardly the blueprint for a radically different society, with analysis from associate director David Phillips finding an independent Scotland “would have to count its pennies and pounds in at least its first decade of life”.

Phillips wrote: “As I argued last year, the SNP should be commended for tackling rather than ducking this issue – setting out a plan to reduce the budget deficit significantly over the course of a decade.

This would involve holding down the growth in public spending to one per cent below growth in the economy, so if the economy were to grow by 1.5 per cent a year, total public spending could grow by only 0.5 per cent a year.

“The SNP has claimed that this would not be austerity as spending would be growing.

“But keeping spending growth to such a low level in the context of an ageing population pushing up demands for healthcare, social care and pensions would – unless these demands were not met – mean cuts to many other areas of public spending.

“So the Growth Commission’s plans would imply austerity for some parts of government. And pursuing the types of policies suggested in the SNP manifesto in an independent Scotland would mean either those cuts would have to be even bigger, or other taxes would have to be increased to pay for the proposed net giveaways.”

Yet the findings of the Growth Commission are not official SNP policy, and without full powers over fiscal levers, SNP politicians will argue the party’s room for manoeuvre is limited.

Scotland is redefining what it means to be a successful nation by focusing on the broader wellbeing of the population as well as the GDP of the country" - Nicola Sturgeon

And with Derek Mackay forced to draw up budgetary plans with no idea what the UK Government will do – delays from the Treasury mean the Scottish budget will come out a month earlier than the UK’s – the chaos consuming the Commons has certainly not helped.

As the finance secretary put it, in a recent interview with Holyrood: “I’m now onto my third chancellor and as many chief secretaries to the Treasury and while, like many people, I sometimes have imposter syndrome and I don’t think it’s a bad thing to admit that there are times when I don’t think I’m good enough to do the job, I have to say, having met my so-called imperial masters, I am feeling perfectly apt and perfectly up to the job.”

Outlining his objections to the disruption caused by Brexit and the continued pursuit of austerity, Mackay added: “I have to say I did get on much better with some other UK Tory ministers who I thought I could do business with. It turns out they were so reasonable they are no longer in the Conservative Party.”

And so the SNP continues to claim independence as the only means of pursuing the sort of ideas outlined by the FM in her speech. Speaking after the event, in response to questions over whether she was still planning a second referendum this year, Sturgeon remained committed. She said: “That is my intention, that is what I am planning for. It’s what I fought the general election on and it’s what I won the general election on.”

So Sturgeon stuck to her plans for a second referendum this year, despite widespread suggestions from both within and outwith her party that this is unfeasible. Again, the FM has found herself thwarted by the UK Government, with Boris Johnson formally rejecting a request for a Section 30 order.

Saying he had “carefully considered and noted” the FM’s arguments, Johnson argued that “another independence referendum would continue the political stagnation that Scotland has seen for the last decade, with Scottish schools, hospitals and jobs again left behind because of a campaign to separate the UK”.

So the stalemate continued, with Sturgeon and her colleagues apparently still committed to a vote before the end of 2020, and others pushing for a so-called ‘wildcat referendum’, held without the transfer of powers entailed by a Section 30 order. And while the FM will announce further plans next week, there remains a sense that the current impasse – and the sight of a Tory Prime Minister ignoring the mandate brought by the pro-independence majority in the Scottish Parliament – will do nothing to hurt the SNP’s prospects going into the 2021 elections.

In that sense, the SNP may have little to lose. In fact, in some ways, with the question of currency still uncertain and polls suggesting less than half of Scottish voters actually support independence, there are no guarantees a new Yes operation could shift up support during the campaign.

But as the heads of states returned from Davos, it is hard to escape the feeling Scotland is at a crossroads. A choice between possible futures awaits – in the UK or outside it, and the pursuit of pure economic growth, or something new and different. 

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Read the most recent article written by Liam Kirkaldy - Sketch: If the Queen won’t do it, it’ll just have to be Matt Hancock.

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