AS I SEE IT: TERRY MURDEN
Sovereignty is no panacea for economic success. Just ask the Germans
A growing energy crisis, falling business morale, a country struggling with skills shortages and flirting with recession. Surely more ammunition for the SNP to use against the UK government? Well, no. This is Germany, the biggest economy in the EU, described by one German banker as “Europe’s problem child”, and its difficulties make uncomfortable reading for the Westminster-hating SNP.
According to SNP orthodoxy, the EU is an economic paradise lost, a result of the UK Government’s “unwanted” Brexit which has robbed Scotland of a key trading route and responsible for holding the country back.
However, all is not well in euroland. Growth in Germany will be the weakest among the Group of Seven nations this year, according to the International Monetary Fund, which predicts a further dip in 2023. Inflation has hit 8.5%.
On top of that, interest rates in the bloc have just gone up for the first time in 11 years and the euro has sunk to near-parity with the dollar, making it more expensive to import vital supplies. This, according to an analyst at Vanda Research, “already reflects a pretty deep recession in the eurozone in terms of magnitude.”
Meanwhile, the UK’s Office for National Statistics says goods exported from Brexit Britain to the EU reached £16.9bn in May, their highest level since the series began in 1997. While there remain problems over additional border checks, a general slowdown in trade and rising inflation are contributing to current stagnation, as reported by the British Chambers of Commerce.
Such data and detail rarely troubles the SNP’s propagandists who prefer to paint a picture of companies permanently in mourning for the loss of EU status. Many continue to have problems, but it is not universally bad.
Earlier this year, SNP MSP Rona Mackay accused Westminster Tory minister George Eustice of failing to identify a single benefit for the food and drink sector from Britain’s exit from the EU. When Daily Business drew the party’s attention to a 29% surge in salmon exports last year it elicited a grudging acknowledgement from her Westminster colleague Deirdre Brock that this was “some good news at last”.
And, as they say, where there’s a will there’s a way. One company I spoke to last week, the Scotch whisky distributor Artisanal Spirits Company, said it had got around red tape issues over getting its bottles to EU customers by opening a warehouse in Germany. “Our members now get bottles just as quickly as before,” said managing director David Ridley.
The SNP will have none of it and supplies almost daily attacks on the “cruel” Tories’ economic policies, though the solution offered is rarely an economic one. Rather, the party insists that independence itself is a cure-all for everything that the Tories are doing to undermine us all.
Independence may well unleash the ingenuity and determination of Scots to choose alternative – and better – policies, but we’ve yet to hear them. As a fall back, the SNP is fond of comparing “wealthy” small nations such as Denmark, Finland and Norway with a suppressed Scotland, though rather than present an economic model built on the successes of these countries, it prefers to throw mud at the Tory government.
The stark reality, is that the Tories cannot be blamed entirely for inflation, or the energy crisis, or skills shortages. These are problems caused by the pandemic, a sudden post-Covid surge in demand for components and staff, and the Ukraine war which has impacted on food and fertiliser stocks. They are not unique to the UK (or the Tories) but are problems shared by governments around the world. The US has just plunged into a ‘technical’ recession and others may well follow.
The notion that an independent Scotland would somehow have ready made solutions promising prosperity in the face of such global adversity is too preposterous to take seriously. Petty parochialism just makes matters worse.
Independence would clearly give a Scottish government more choices. But the process of simply becoming a sovereign state, even one equipped with an array of monetary, fiscal and industrial powers, is no guarantee that the economic wolves can be kept permanently at bay. Just ask the Germans.
tmurden@dailybusinessgroup.co.uk
Terry Murden held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business
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