There is growing disquiet around Scotland’s so-called ‘Union Dividend’. Despite this generous c. £2k public spending premium Scots get per head over the rest of the UK, establishment voices are asserting that devolved Scotland under the SNP is failing. Yet the SNP government still has the temerity, after 17 years in power, to blame all and every shortcoming on Westminster.
Irritation quickly turns to scorn when we learn that this dividend is required largely to meet higher health costs, linked ostensibly to Scotland’s reckless lifestyle choices. Groomed by 40 years of neo-liberal ‘individualism’, today’s UK establishment finds little sympathy for the consequences of Scotland’s chaotic hedonism, immortalised by its cocktails of Buckfast, class-A drugs, deep-fried mars-bars and the likes. Lifestyles that, under the SNP’s watch, have led notably to the highest rates of drug deaths in Europe for middle-aged men. It appears to corroborate a familiar narrative, based on long-established, older versions of the same caricatures; Scotland the ‘subsidy-junkie’, Scotland the ‘grievance-monger’, and ultimately Scotland, somehow, ‘uniquely inadequate’.
But new in-depth research, mapping Scottish well-being outcomes to that of its most relevant European peers, shows these conclusions to be a gross misrepresentation of a far darker truth. This work tells a story of how over the last 70 years, Scotland has been driven to the bottom of every well-being ranking imaginable against UK and other European peers. A story of inter-generational, demographic atrophy driven by decades of Westminster neglect across successive Tory and Labour governments, as well as their fanatical pursuit of free-market ideals and reckless Euro-scepticism, eventually resulting in Brexit.
In short, its cold hard data reveals the scope and depth behind Scotland’s ignominious status as the sickman of Europe. This, rather than deep-fried food, is the real nature of what the 25 year old Scottish parliament, and its ‘so-called’ Union dividend, is tasked with resolving. It’s the proverbial challenge of trying to make a silk purse from a sow’s ear…
Europe’s long-term sickman continues to get sicker
Throughout the course of the 20th century, Scotland’s general health had been very poor relative to the rest of the UK, particularly its male death rate. But since WWII, Scotland’s Westminster government somehow managed to preside over this gap widening, despite the post-war welfare miracle transforming the quality of life elsewhere across the UK.
By the 1970s, as graph 1 shows, Scotland lagged not only behind its UK peers but also its wider European peer average, ahead only of Finland overall. However, the Finns got busy, launching a massive campaign targeting cardiovascular disease in men. This involved new national laws developed and maintained by successive cabinets over the decade, coordinated locally through public awareness campaigns as well as local industry. It was a collectively owned Finnish problem, collectively resolved by Finnish people; by the end of the decade Finland had leap-frogged Scotland at the bottom of the male death rate ranking. A massive change for the plight of Scotland’s men was just around the corner too.
Thatcherism killed Scottish industry but ‘long-Thatcherism’ is still killing its men
In the late 1970s, possibly anxious to emulate Finland’s success and drawing on the windfall of North Sea oil revenues, you might have thought that Scotland’s Westminster government, was well placed to tackle its chronic male death rate crisis. Instead, Scotland was about to go back in time. The new Tory government was hatching a plan that would return Scotland to death rates not seen since the days before the World War II. Driven by ideological zeal, the UK government used North Sea oil wealth to cut taxes for the wealthy, sell off state assets and pro-actively destroy the UK’s heavy industry. The latter’s immediate devastation across the communities of central Scotland is now legend, but no one had any idea of the fresh hell it would unleash for future generations. Scottish baby boys of the 70s and 80s, born within the blast zone of the heavy industry blitz, would succumb in their droves to its ensuing radiation, set to magnify its already dire death rate over successive decades.
Graph 2 highlights the sorry plight of Thatcher’s cohorts, with death increases massively outstripping that of all other cohorts each decade; the very same cohorts at the centre of today’s tragic drugs death spike, now in their 30s and 40s. The ones today’s establishment try to pin exclusively on the Scottish government.
Long-Thatcherism drove mass exodus of young and fit
Such was the ferocity of Thatcher’s blitz on Scottish industry, it had another, equally devastating effect on Scottish males. The trauma unleashed also drove thousands of fitter, healthier men away from Scotland to find work. As a result, while the rest of Europe made modest improvements in maintaining its population sizes and compositions, Scotland was alone in experiencing 3 consecutive decades of net outward migration between 1970 and 2000, despite the discovery of Europe’s largest oil reserves in its waters.
Chronic health and outward migration made Scotland 2nd oldest among peers
With Europe’s highest death rate among younger men now turbo-charged by Long-Thatcherism as well as 30 years of population decline, it is little wonder that since the early 80s Scotland has had an increasingly older population than the UK and other European peers. Today, only Germany has an older average age, due to its historic reunification.
Green shoots of demographic recovery obliterated by Brexit
Finally, there was some hope for Scotland’s demographic outlook in the early years of the new millennium. Following the accession of the Eastern European countries to the EU, Scotland at last found a solution to its net outward migration woes, with its population growing for the first time since the 60s, thanks to freedom of movement. From 2004, Scotland enjoyed the strongest period of population growth in living memory, albeit at a rate that lagged UK and European peers as per graph 3 above. At last, a strategy for the future, a workforce to build the economy, a re-balanced mix of young and old. And whether for this reason or others, Scotland duly and emphatically endorsed its membership of the EU, whose freedom of movement gift had solved its decades’ old migration problem. But we all know what happened elsewhere in the UK; Graph 5 shows how the green shoots of Scotland’s first successful demographic strategy in the post-war era were crushed overnight by leaving the EU.
So there you have it. Systemic neglect. Fanatical Neoliberalism. And then the killer blow, Brexit. Delivered across 70 years of Tory and Labour Westminster governments, making Scotland the sickest and oldest country among its peers. In the middle of an oil boom to boot.
But you can imagine what the establishment will make of all this. They will assert that this is why Holyrood – allegedly the most powerful devolved settlement in the world – was set up. This is why we get our dividend. And this is where the story moves from tragedy into farce.
Establishment assertions around ‘powerful parliament’ simply don’t stack up
It should be clear by now that even a fully independent, well-funded country would need more than 25 years to redress the consequences of over a century of demographic neglect. But while the establishment likes you to believe that Holyrood is already virtually independent thanks to its devolved powers, in reality, when it comes to spending, it has less discretion to vary outlays than even the local authorities it oversees, let alone other devolved states such as Bavaria, Ontario or Catalonia.
Firstly, not only does the Scottish government have no formal involvement in providing the inputs for its own budget, but the review process does not even use Scottish needs data; Westminster carries out the entire review using English data only as a proxy. The use of ‘Scotland-specific data’ only emerges when the famous Barnet formula works out Scotland’s share based on its population; the resultant ‘block-grant’, is simply handed back to Holyrood. Only at this point does the Scottish parliament’s ‘autonomy’ kick in; its powers being limited to no more than dividing up the cake between Health, Education, etc. –but with no say over the size of the cake.
Secondly, you might reasonably conclude that the ‘dividend’ actually refers to additional, discretionary spending raised by the Scottish government to match pledges in its manifesto, e.g. to offset the two-child benefit cap for example, that differ in funding needs from Westminster ones. But it is nothing of the sort; this is where it all gets alarmingly slapstick. The fact that Scotland gets roughly 20% more per head today is because that’s what old Lord Barnet came up with back in 1978 when he was developing his magic formula. But that itself was not based on anything current; all Barnet did was identify the various one-off cabinet spending deals agreed for Scotland back in the 50s and 60s which came to about 20%. And quite unbelievably, every year since then, pre and post the whole design and set up of devolution, this percentage, based on the needs of a Scotland emerging from post-war rationing, has simply been rolled forward, drifting indifferently, impotently, as Europe’s sickest man continued to get sicker.
Establishment assertions around ‘generous dividend’ don’t stack up either
So, given such a ridiculous process, how likely is it that the dividend is the ‘right’ sum for our needs? Unsurprisingly, on the two occasions Westminster governments have secretly reviewed Scottish spending needs since Barnet, their ever-keener neo-liberal instincts have quite predictably led them to conclude that the dividend was grossly overstated. The most recent attempt, under Brown’s Labour in 2010, found it was 13% higher than ‘merited’. But fearing a backlash from its decidedly ‘un-neoliberal’ voter base in Scotland, they never dared to publish, let alone implement its findings. Just as well, because, more striking than anything in this whole bizarre tale is what our closet peers believe they need to spend on public services.
Mostly led by centre-right governments, Graph 6 shows that our peers see fit to spend a whopping $4.4k more per capita than the UK on core services. So this means that if these peers were setting the Scottish dividend today, it would be five times higher than the Westminster level, with a massive $3.4k per head in addition. And that figure does not take specific account of the current scale of Scotland’s well-being gap versus our peers as documented above, driven by the decades of UK neglect. Dividend you say? More like a deficit. Or maybe reparation?
So now we have a new Labour government in power at Westminster. The first thing they have done is confirm their shared commitment to the austerity consensus of the last 40 years. But even if they hadn’t, an emboldened, Unionist Labour government is never going to prioritise Scotland’s specific demographic crisis despite the above; it has many other, more politically relevant, crises to address instead elsewhere in the UK. One way or another, it means the ever-widening chasm between Scotland’s well-being and that of our UK and European peers is set to continue. So let’s brace ourselves for more of the same. Until one day, maybe, Scotland might twig; a sow’s ear is a sow’s ear.
Full research material can be found at the author’s website.
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