Can an independent Scotland be like Borgen?

Can an independent Scotland be like Borgen?

by David Torrance
article from Monday 4, February, 2013

I LOVE BORGEN. Borgen’s cool. If Alex Salmond could give me a cast-iron guarantee an independent Scotland would be like Borgen then I’d vote yes in 2014. Damn it, I wouldn’t just support independence; I’d campaign for it, with the proviso that I got to be Kasper afterwards (I doubt, however, the First Minister would agree to that).

It’s also easy to see why many Scots, particularly – it seems – Nationalists, dig the series so much. Denmark and Scotland have populations of around five million, while both countries also have a similar view of themselves as liberal, outward looking and broadly socially democratic countries. I use the word “view” deliberately, for how a country sees itself doesn’t necessarily reflect reality.

Now I happen to think social democracy is quite an attractive model. Anything that minimises inequality, increases social mobility and generally improves the lot of the greatest possible number of a country’s citizens is worth pursuing. But it’s got to be paid for. The trade-off, generally speaking, comes through higher taxes.

This, I would contend, is the central weakness in SNP conceptions of “social democracy”, a much-misused term, not just as a result of Alex Salmond et al, but also thirteen years of New Labour government which, let us remember, saw itself as “progressive”, “socially democratic”, and so on. New Labour, like the SNP, generally favoured neoliberal economics.

On twitter a few days ago I canvassed definitions of social democracy in a Scottish context and the general consensus was it amounted to the pursuit of social justice and a “fair” (itself a tricky concept) distribution of assets and resources. Levels of taxation were rarely, if at all, mentioned. The First Minister also had a go at defining the term on STV’s Scotland Tonight last week:

“I happen to believe there’s a lot of evidence that social democracy, that is believing in a competitive economy but a just distribution of resources…is a good balance for Scotland…they [the Scottish people] want to see a Scotland that says certain things are above and beyond the market place.”

So, in other words, a mixed economy, which is what we have at the moment, even once certain Coalition reforms have bedded down. But it was Salmond’s emphasis on a “competitive economy” which undermined his definition of social democracy, for what he was actually describing was the Irish economic model, to which he has been wedded, more or less, since the late 1980s.

That, for the uninitiated, combined low taxation with relatively high social spending. Now that’s fine (though arguably unsustainable), but Ireland did not practice, by any stretch, what could be termed social democracy. Most Scandinavian countries, on the other hand, do. And that includes Denmark, both in real life and on the telly.

Throughout series one and two of Borgen there has been a consistent willingness – clear in all the coalition trade-offs and policy announcements – that fair, socially democratic policies have to paid for. This is mirrored in reality. Even those on very low incomes in Denmark pay almost 30 per cent (in total) in tax; those on average incomes up to 36 per cent; and high earners 45 per cent. Indeed, under the Danish tax system, it’s possible for someone on a high salary to pay 57 per cent of his or her income back to their government.

As part of the UK, Scotland doesn’t even approach such levels. Indeed, within a year or so those on the very lowest incomes (i.e. under £10,000 a year) won’t be paying any tax at all, while the highest earners now pay an upper tax rate of 45 per cent (although, to be fair, the SNP say they would have retained this at 50 per cent).

The SNP’s vision of an independent Scotland, meanwhile, would not involve a radical change to the status quo. Last year Alex Salmond told a business audience in London that income tax would be kept in line with that of the UK, while Corporation Tax could be reduced to 20 per cent. Now given the UK Government is already intending to lower Corporation Tax to 21 per cent, that isn’t much of a difference.

This is where notions of social democracy, and the vision of an independent Scotland as a sort of honorary Scandinavian nation (often made by SNP politicians) begin to fall apart. Even the Scottish Government’s best-case scenario for an independent Scottish economy acknowledges that your average Scot would be slightly worse off than your average UKer (thus the claim we’d all be £500 “better off” with independence; “less worse off” would be more accurate).

Consider, then, that spending levels would also immediately be higher, for the SNP considers the current round of welfare reforms and public spending cuts to be unnecessary and unacceptable, which implies they’d be reversed come independence. Sure, there would be savings, in defence terms and assuming the departure of Trident, but these would by no means be immediate or, indeed, cost free.

In response to this the SNP would no doubt argue that independence would help “grow the economy” and therefore the revenue base could be maintained, but the trouble with that is by “grow” the party (or rather its leadership) generally mean “cut taxes”, chiefly Corporation Tax and perhaps Air Passenger Duty. Cuts such as those, at least in the short term, lead to reductions in revenue. Consider too that the SNP wants to, when “fiscal conditions allow”, invest a portion of North Sea oil revenue in an oil fund, which again means less money to spend.

Now I don’t happen to believe everyone in the SNP leadership shares this curious attachment to neoliberal economics. Nicola Sturgeon, for example, spoke recently of “targeted” Corporation Tax cuts rather than the carte blanche approach favoured by the SNP Right (every other party has a Left and Right; it seems odd not to consider the SNP in the same manner).

But to return to my main point, none of this resembles “social democracy”, at least not in the economically balanced, Scandinavian sense. The Danish society depicted in Borgen not only views itself as fair, but is willing to pay for it through higher taxes. Socially democratic politics, much like high-quality Danish political drama, comes at a price; it does no one any good to pretend otherwise.

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