ANALYSIS

This graph should be a rocket up the independence movement's backside

Robin McAlpine writes on a graph that he says should shock Yes supporters <i>(Image: NQ)</i>
Robin McAlpine writes on a graph that he says should shock Yes supporters (Image: NQ)
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IF you support independence then I urge you to take a moment’s break from strategising about how to get a referendum (or whatever alternative plan you’re hatching) and take a look at a graph. It should be a rocket up our arse. It is time we took independence an awful lot more seriously than we are doing.

The graph is simple. The axis that runs from left to right indicates rising wealth per capita.

The axis that runs up and down indicates whether a nation is an importer of wealth or an exporter of wealth, the green on this graph being wealth importers, the red wealth exporters. (If you are interested, this is calculated by subtracting gross domestic product from gross national income, which tells you the difference between the wealth you generated and the wealth you retained.)

Common Weal mapped Scotland against a number of the main World Bank country categories.

As you would expect, at the bottom of the pile and way on the left of the graph are “the most indebted poor nations”.

They don’t generate a lot of wealth but are paying a lot of it in debt repayments to rich countries.

READ MORE: Wealth tax on 10 richest families could rescue 30k kids from poverty

On we go, moving further to the right (wealthier) and higher up (gradually moving from net exporter to net importer of wealth). We go past the least developed countries and the developing economies, the Brics countries and then various groupings of the developed West, such as the eurozone and the European Union.

Each gets richer; each keeps more of its own wealth and then, eventually, starts taking the wealth of others. Scotland’s position should shock you.

We are almost exactly as wealthy as the eurozone countries but we’re exporting wealth at twice the rate of even the most indebted poor countries. Can I get you to reflect on that – Scotland is rich like Europe but leaks wealth much, much worse than sub-Saharan Africa.

How bad is this leakage? Dreadful. Since devolution, the cumulative total of the wealth we have exported is now well over £280 billion. Half of it went elsewhere in the UK, half of it went elsewhere in the world.

Let me put that in a way that makes more sense; in the first 20 years of devolution, we forfeited an entire year’s wealth. We just gave it away.

Why is this happening? It is very straightforward; Scotland barely owns any of its own economy now. We are startlingly foreign owned. Our banks, our energy, our land, our supermarkets, our whisky industry – we work and we shop and we generate wealth and then the owners of these industries take the profit and ship it off overseas.

Or let me put it another way. Name a major Scottish company which is actually still Scottish-owned. It gets worse though, because if you want to import wealth from elsewhere you need Scottish-owned businesses that have significant business interests abroad.

Name a major Scottish business with significant subsidiaries based outside Scotland.

How did this happen? How did Scotland lose its own economy to foreign owners?

This madness has a name – it is called foreign direct investment. Successive Scottish governments have trained you to believe that this means big foreign companies coming here, spending their own money and building factories which create jobs and wealth for Scotland.

This is a fairytale. Foreign direct investment in Scotland has been a fire sale of our assets, a betrayal of our nation. Let me give you an example – the £50m loan the Scottish National Investment Bank gave Gresham House. That was funded directly through taxpayer money.

READ MORE: Is Scotland's foreign direct investment success actually a good thing?

But what is Gresham House? It is a London-based consultancy that helps foreign investors buy up Scotland’s land so they can milk the subsidies for tree planting (also public money) meaning all the financial gain from the land is exported.

When the loan was made a couple of years ago, this London company had no Scottish presence. It is now the second-biggest landowner in Scotland. Why on Earth is this something the Scottish Government has thrown its backing behind? For press releases?

Every time you wonder why Scotland can’t fund public services just remember that £6 out of every £100 is taken out of the country. Why do our GERS figures look bad? Because £6 out of every £100 is taken out of the country.

Why doesn’t our economy grow? Because £6 out of every £100 is taken out of the country.

Why is the SNP’s crazy, crazy policy of using sterling without a central bank so crazy? Because for every £100 in the economy we’d need to borrow £6 from somewhere just so we don’t run out of money.

Why aren’t people convinced of our case for independence?

Because while this graph represents the biggest reason to run from the Union, it also poses the biggest challenge.

Either before or soon after independence, we’ll be forced to take this issue seriously.

I’d like to work through all the implications of this and what it tells us we need to do, but there isn’t space. The short version is that Scotland will need a major industrial development strategy to recapture significant ownership of the Scottish economy.

For example, we must (I mean must) take energy into Scottish ownership, especially ScotWind. We should pass a law meaning that no company can own more than say three Scottish whisky distilleries and fund management buy-outs from the Investment Bank.

We should create a national mutual bank (or mutualise RBS) to create a proper Scottish-owned bank.

It is going to mean a bold, expansive strategy which does all the things that Scottish

Enterprise disproves of. It means giving up our suicidal obsession with Foreign Direct Investment. It means a Scottish First economic development focus.

We have become the worst in the world. It is a shocking state of affairs and it can’t be wished away. We can change course now, or we can change course when the economic realities of this hit after independence. The former would be an awful lot easier.

What we should not do is accept this. We have been asleep at the wheel. We need to take a grip. Now.

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