SNP’s £3,000 'independence dividend for all' is about as real as Donald Trump’s $5,000 – William Deans
The SNP’s claim that Scottish independence would result in a ‘dividend’ of £3,000 for every person in the country falls apart on closer scrutiny, explains William Deans
Last week saw a senior politician make headlines with dramatic ‘dividend’ offers to voters: you, yes, you could be better off to the tune of thousands – if you ignore the experts, forget my record, and lend me your vote one more time.
But are we talking about Donald Trump’s desperate play in the US mid-term elections – promising voters a “Trump dividend” of $5,000 if the Republicans win in November’s midterm elections – or SNP depute leader Keith Brown’s claim, days later, of a £3.000 “independence dividend” after we leave the UK?
Some, I suspect, may bristle at the comparison – but the SNP’s latest invented independence offer shows that their addiction to Trumpian political promises is not going away any time soon.
Trump’s broken $2,000 tariff pledge
Trump’s eye-catching offer to US voters has already been widely dismissed as an act of desperation. His party is trailing badly in the polls; the US economy is under a self-inflicted malaise of tariffs and trade disruption; and Republican attempts to disrupt postal voting to their advantage have been rejected by the courts.
Trump has built his political success on a throw-it-at-the-wall-and-see-what-sticks approach to promises – making claims and offers on the spot with no interest in whether they have any basis in reality. This is not even the first time he has offered blanket cash handouts.
Last year, Trump claimed that every US adult would receive $2,000 from the “profits” of his tariff hikes. The fact that those payments never materialised has not dissuaded him from trying one more Hail Mary toss.
The cost of Brexit
The SNP’s Brown can at least point to some real research connected to his claim for how much richer we could be after independence. It is just a pity that the research in question has been misunderstood, garbled and distorted beyond all meaning.
On closer examination, it turns out that the basis for Brown’s £3,000 offer to Scots was some respectable analysis by Stanford University economics professor Nick Bloom from last year. He found that up to 8 per cent of UK GDP has been lost because of our exit from the European Union, and the plethora of trade barriers and red tape that this has created for our economy.
The loss works out to about £3,000 per person. I suspect you can see where this is going. The SNP’s second-in-command cut that figure out and pasted it into his press release as the magic number – an “independence dividend” (rather unfortunately echoing Trump’s phrase) that would go to every Scot if we left the UK and joined the EU.
Whether for reasons of professional carelessness or political convenience, the idea that reality might be just a tad more complicated than that does not appear to have had a look in.
Scexit would be even worse
It is hard to know where to start. Scotland already receives a net fiscal transfer from the rest of the UK of around £2,000 per person, which we would (for hopefully fairly obvious reasons) give up with independence. That alone knocks out most of the claimed benefit before we get into the meaningful details.
Then there is the basic reality that if Scotland were to leave the UK and join the EU, the trade barriers which caused that lost GDP found by Professor Bloom would then go up between Scotland and the rest of the UK. It might be tempting to assume – and it is often claimed by nationalists – that more open trade with the EU’s 27 member states would be a better deal than keeping trade with the rest of the UK. Reality, however, tells a different tale.
At the time of the Brexit referendum, trade with the EU accounted for approximately 40 per cent of UK exports – already a hard hit to take. The rest of the UK, however, accounts for around 60 per cent of Scottish exports. If Brexit was that bad for the UK-wide economy, it follows that “Scexit” would be even worse for Scotland.
Small wonder, then, that analysis by economists at the London School of Economics in 2021 found that, purely on a trade basis, leaving the UK would be two-to-three times more harmful for the Scottish economy than Brexit itself, whether or not we joined the EU.
Incompetence or cynical abuse?
All of this, of course, is without getting into the myriad other complicating factors for the SNP’s “independence dividend”. The cost of creating new government functions; economic headwinds; deficit cuts required for EU membership; a new and untested currency; debt taken on from the rest of the UK; the list goes on.
To take the headline figure of someone’s research, divorce it from its context, and contort it into an invented political promise is incompetent at best – and a cynical abuse of public faith in academic analysis at worst.
The perennial difficulty in these moments is working out whether the perpetrators of such ridiculous claims really believe in them – or to put it another way, whether Brown and Trump are daft, or simply think that everyone else is daft enough to believe them.
Whatever the whirring logic going on in their minds – and whether they really believe the tales they are telling – we all ought to be wise to this sort of promise by now.
There will always be those who make inflated claims about the “dividends” on offer from their political projects. If you learn, instead, to listen to the experts and read the record of those making the promises – that is a dividend that pays off in the long term.
William Deans is chief of staff to Alistair Carmichael MP
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